There is a reason that billionaire Warren Buffett is known as the greatest investor ever: The Oracle of Omaha has a legendary ability to read companies, their leaders, and Wall Street.
Buffett has built an empire on making the right millionaire moves . But this business titan has been wrong many times too. Here are some of Buffett’s biggest financial regrets.
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1. Purchasing Berkshire Hathaway
You may know Buffett bought Berkshire Hathaway in 1965 and turned it into the world's largest holding company. But he has said that Berkshire was “the dumbest stock I ever bought.”
At the time of his purchase, Berkshire was a textile company. In retrospect, he says those textile assets “weren’t any good.” He tried to make a go of it as a textile business for 20 years, before finally giving up.
Over time, he managed to use Berkshire as a holding company and built his empire upon it. But he says he would have done even better had he never purchased Berkshire in the first place.
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2. Not buying Walmart
Buffett has called passing on Walmart one of his worst “mistakes of omission.”
In the 1990s, Buffett was on a buying binge and set out to buy 200 million shares of Walmart. But when the share price moved just a few cents above Buffett’s ideal price, he balked.
Walmart was worth around $11.50 a share in the 1990s and today is worth around $80 a share.
3. Investing in Tesco
In 2012, Berkshire Hathaway owned 415 million shares in the British-based grocery chain Tesco. But two years later, Tesco overstated its profits and the share price tumbled, leaving egg on Buffett’s face.
Buffett said he should have sold Tesco shares much earlier, and was “embarrassed” that he didn’t. “I made a big mistake with this investment by dawdling,” he said.
Being too slow to pull the trigger cost Berkshire an after-tax loss of around $444 million.
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4. Not buying Google
Buffett has said he only invests in companies that he understands. That means he traditionally has stayed away from investing in most technology companies.
Still, Buffett regrets not buying Google early on. Along with Walmart, Buffett has called Google one of his biggest missed opportunities.
5. Purchasing Dexter Shoe Co.
In 1993, Buffett purchased the now-defunct Dexter Shoe Co. for $433 million. The company went under less than a decade later.
Dexter Shoe ended production in the U.S. in 2001, and Berkshire folded what was left into the H.H. Brown Shoe Group.
Buffett later admitted in a 2007 letter to shareholders that Dexter didn’t have a strong competitive advantage, which is why it failed.
6. Not buying the NBC TV station in Dallas-Fort Worth
Not all of Buffett’s mistakes are related to losing money. Sometimes he regrets not spending money too.
Buffett says he missed out on buying the Dallas-Fort Worth NBC station for $35 million in 1972. As with Walmart, he recognized it as a great business with strong leadership, but still failed to pull the trigger.
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7. Buying a large amount of ConocoPhillips
Buffett purchased 85 million shares of ConocoPhillips for $7 billion — only to watch energy prices fall dramatically in late 2008, which caused his shares’ value to plummet to $4.4 billion.
In a Berkshire shareholder letter, Buffett shared that he had acted alone without the greenlight from Charlie Munger, his legendary business partner.
8. Not buying Amazon
Yes, Buffett has slept on more than one tech deal: In addition to not buying Google, he missed out on Amazon too.
Buffett passed on buying shares at Amazon’s IPO in 1997. He later said in a 2017 interview, “I didn’t understand the power” of Amazon. “So, it’s one I missed big time,” he added.
9. Buying US Airways stock
While buying US Airways stock wasn’t a flat-out failure, Buffett does consider buying into this airline as part of his list of regrets.
He bought $358 million worth of stock in 1989, but those shares never appreciated. The airline merged with American Airlines in 2013.
While analysts believe Buffett probably got all of his principal back, the tycoon investor says things could have turned out much worse.
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10. Not looking more deeply into Lubrizol Corp. stock
David Sokol, a chairman of several Berkshire Hathaway subsidiaries, once pitched Buffett on buying a controlling share of stocks in Lubrizol Corp.
Buffett did, but it was later discovered that Sokol owned stock in Lubrizol Corp. Sokol’s failure to disclose this fact to Buffett violated insider trading laws.
When Buffett’s firm purchased Lubrizol for $9 billion, Sokol earned a $3 million profit. The situation was revealed in 2011 and caused embarrassment for Buffett.
Buffett later said he regretted not looking more closely at the situation.
11. Buying Waumbec Mills
It’s true: Buffett has purchased more than one failing textile company. First was Berkshire Hathaway in 1965, and then Waumbec Mills in 1975.
Based on “projected synergies,” Buffett thought Waumbec Mills was a smart investment. However, by the mid-1980s, he exited the textile industry altogether and categorized it as a declining industry that could not compete with cheaper global competition.
Later, Buffett admitted that buying Waumbec was a horrible idea. He made the same investment mistake twice instead of learning from his purchase of Berkshire Hathaway and moving to a new strategy.
Bottom line
Even the greatest investors make mistakes. Buffett is proof that billionaire decisions can go wrong.
As you manage your money , try to learn from Buffett’s missteps. Doing so can help you become more successful on your own journey to financial independence.
Money tips that can work for everyone
No matter what your bank account balance is, there's always an opportunity to optimize and improve your finances. Here's a quick checklist of things you can look at today.
Focus on paying off your debt. Debt can hold you back from making progress with your overall financial well-being. Aside from cutting expenses, there are tools that can help you pay off debt faster like balance transfer credit cards and debt counseling.
Earning extra income can give you breathing room. If finances are tight, earning some extra money to supplement your income can make a huge difference. A new job is one option to consider, but if you're not ready to make a big change or already retired, a part-time side job could be a better choice.
Cut your expenses. It sounds painful and so not fun, but it doesn't have to be. Take a look at your biggest expenses because that's where you'll probably find the biggest savings. For example, auto insurance rates have been soaring so shopping around for a new insurance company can be the fastest way to cut your bill. Also, look for ways to cut your grocery bill (despite rising inflation).
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