Chairman and CEO of Berkshire Hathaway, Warren Buffett, is often hailed as the world's most successful investor. Yet, he has consistently acknowledged his investing errors, turning each misstep into a lesson for others. Over the years, Buffett's honesty about his failures has offered insights into the importance of discipline and humility in investing.
One of Buffett's most famous confessions centres on Berkshire Hathaway itself. In a 2010 interview with CNBC, he said buying the company was the “dumbest” stock purchase he had ever made, conceding that emotion rather than logic influenced his decision. It cost him about $200 billion in potential value.
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Waumbec Mills Misstep
Despite regretting his 1964 purchase of Berkshire Hathaway, Buffett said he repeated a similar mistake more than a decade later. In 1975, he bought Waumbec Mills, another New England textile company, only for the venture to end in failure. CNBC reported that Buffett later described the acquisition as “a terrible decision,” saying that the mill had to be closed down not long after Berkshire took over.
Dexter Shoe Disaster
In 1993, Buffett acquired Dexter Shoe Co. for $433 million, not in cash, but in Berkshire Hathaway stock. The decision proved disastrous. In his 2007 letter to shareholders, Buffett called it one of his worst moves, estimating it cost investors about $3.5 billion, or 1.6% of Berkshire's net worth at the time.
His regret deepened years later. Writing to shareholders in 2014, he admitted that paying for the acquisition with Berkshire stock was a major error, as those same shares had since grown to a value of $5.7 billion.
Tesco And Other Costly Lessons
Buffett's admitted "indecisiveness" also proved expensive in the case of Tesco. Berkshire Hathaway owned 415 million shares of the British supermarket chain at the end of 2012. Though the company sold part of its holding, it stayed heavily invested. When Tesco overstated its profits in 2014, its share price collapsed, costing Berkshire around $444 million.
Not all of Buffett's regrets came from bad purchases. Some stemmed from missed opportunities. He famously admitted to underestimating the potential of companies like Amazon and Alphabet, both of which he admired, but did not invest in them in the early stages.
Other losses, including an $873 million hit linked to Energy Future Holdings and overvaluations in certain manufacturing and retail ventures, have reinforced Buffett's key message: Even the most disciplined investors must stay open-minded and self-aware.
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