Two of the Biggest Mistakes in Warren Buffett's Investment Career

The famous investor Warren Buffet is caught on camera deep in thought.One of the reasons why Warren Buffett is so beloved is because he is not afraid to poke fun at himself. This humility humanizes Buffett and makes him seem like a normal person, despite the fact that he is one of the richest people in the world.

Buffett has no problem pointing out his mistakes. There are two mistakes, according to Buffett, that have been particularly glaring. Two mistakes that cost Buffett and his investors tens of billions of dollars.

The first mistake? Purchasing Berkshire Hathaway in the first place.

In 1962, Buffett started purchasing shares of Berkshire Hathaway (a textile company) for himself and the investors in his investment partnerships.

A few years later, Buffett thought that he had reached a deal with Seabury Stanton (the man running Berkshire Hathaway at the time) where Berkshire Hathaway would buy back Buffett's shares for $11 1/2 per share. When Buffett received the offer in writing, the price was for $11 3/8 per share. Buffett was angry over this slight and started accumulating shares of Berkshire - as a matter of fact, Buffett and his investors would eventually take over Berkshire Hathaway, and Seabury Stanton was promptly fired.

Berkshire Hathaway would lose plenty of money for Buffett and his investors over the years before the textile business was eventually shut down.

If Buffett and his investors had simply put this money into the insurance business, Buffett says, they likely would have made an additional $200 billion over the years.

Another big mistake that Buffett recently revealed? Not investing in Google when he had the chance.

Google, which now has a market capitalization of over $650 billion, has been one of the best performing stocks over the past decade. Buffett had access to the founders of Google and had the chance to invest in the company, though he decided to pass. Buffett has famously stuck to the mantra of only investing in businesses that he understands, and he didn't understand the Google business thoroughly enough to invest in the time. That, Buffett says, was a big mistake.


Next time you beat yourself up for a mistake that you made in the stock market, remember - even the greatest investor of all time makes mistakes as well.

Filed under: General Knowledge

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