Trying to recover losses by pouring more money into a struggling stock is a common mistake—and one that Warren Buffett warns against.
At the 1995 Berkshire Hathaway Annual Meeting, Buffett emphasized a key investing principle: “You don’t have to make it back the way you lost it. And in fact, it’s usually a mistake to try and make it back the way that you lost it.”
In other words, there’s no need to stick with a losing investment in the hope it will rebound. The market offers countless other opportunities. Clinging to a poor performer can tie up capital that could be better used elsewhere.
Buffett’s advice is simple: let go of emotional attachments to past losses, and focus instead on smarter, more promising investments going forward.
Hear Buffett’s full explanation
See the complete Lessons From Warren Buffett series
© 2025 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.