The Biggest Mistake Warren Buffett Made With His Money

We know a lot about the long list of successful things Warren Buffett has done with his money over the years, but it turns out he's made a fair share of mistakes too.

In recent years, he's admitted in the Berkshire Hathaway (NYSE: BRK-A  ) (NYSE: BRK-B  ) letters to shareholders there was the massive investment he made in ConocoPhillips as oil prices peaked and subsequently plummeted that "cost Berkshire several billion dollars."

But Buffett doesn't think that was his biggest mistake.

In the video below, Buffett discusses his purchase of Dexter Shoes, which was made in 1993 for $420 million. At the time he said: 

Dexter Shoe Co. is exactly the type of business Berkshire Hathaway admires. It has a long, profitable history, enduring franchise and superb management.

But his opinion changed as the years progressed, and in 2007 he said it was "the worst deal that I've made."

Although he honestly admits he's "done plenty of things that are stupid," the acquisition of Dexter stands far above the rest. They issued shares of Berkshire Hathaway to acquire it, and at today's prices -- a few years removed from the discussion below -- the cost now stands at nearly $5 billion.

Why did it happen? Buffett has admitted he misread the business and its competitive advantage. And by issuing shares of Berkshire instead of buying it outright, he "compounded this error hugely."

Over the last 60 years Buffett has been met with incredible success thanks to his keen ability, but like all of us, he's had his fair share of mistakes too.

Warren Buffett: This new technology is a "real threat"
The list of his mistakes is short, but there is thing that scares Warren Buffett in a big way, and he admitted this emerging technology is threatening his biggest cash-cow. While Buffett shakes in his billionaire-boots, only a few investors are embracing this new market which experts say will be worth over $2 trillion. Find out how you can cash in on this technology before the crowd catches on, by jumping onto one company that could get you the biggest piece of the action. Click here to access a FREE investor alert on the company we're calling the "brains behind" the technology.


Read/Post Comments (0) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 3028153, ~/Articles/ArticleHandler.aspx, 4/2/2015 12:39:57 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Apple's next smart device (warning, it may shock you

Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early-in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!