Warren Buffett is renowned for his brilliant investment decisions, but even he admits that some of his early ones were not so great. In particular, he acknowledges that his initial purchase of Berkshire Hathaway was a costly mistake, resulting in a missed opportunity worth $200 billion. Although the company was ailing in the textile industry, he thought it was a cheap opportunity to acquire assets below their book value. However, he later realized that the money required to keep it afloat would have been better spent on acquiring a high-quality business instead.
“Start from a good base,” Buffett said at the 2000 Berkshire Hathaway annual meeting. “Don’t follow our example in that respect. Start out with a good business and then keep adding on good businesses.”
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© 2023 David Mazor
Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.