By Robert Ross via Iris.xyz

Even the best investors have bad days.

Warren Buffett is no exception. In February, he watched one of his biggest acquisitions quickly sour.

I’m talking about Kraft Heinz, an American food giant that makes everything from ketchup to Oscar Mayer hot dogs to Kool-Aid.

The stock plunged 30% in one day after it announced a 36% dividend cut and never recovered:

Kraft Heinz Co KHC Stock Chart

This caught a lot of investors by surprise. That’s because Kraft Heinz fit Buffett’s signature strategy, known as value investing, to a T.

Buffett has used this strategy to make billions of dollars. So people expected Kraft Heinz to be safe.

But the writing was on the wall well before February. Here, I’ll explain why—and how to avoid stocks with similar problems.

But first, let’s look at how Buffett got into this jam…

Click here to read the full article on Iris.

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