Warren Buffett’s Biggest Mistake Changed His Life

We all know very well Warren Buffett’s investing philosophy. But human nature makes it hard to follow certain aspects of it.

Jul 27, 2014 at 7:31AM

Warren Buffett and Charlie Munger have piloted Berkshire Hathaway (NYSE:BRK-A) (NYSE:BRK-B) to a market-crushing performance over the years. As veteran Berkshire watchers know very well, there's no big secret to this dynamic duo's success.

Buffett shares his knowledge constantly through shareholder letters and the Berkshire annual meeting in Omaha. He prefers a long-term focus, top-notch management, strong brands, staying in his circle of competence, and paying a fair price for a great business.

While many of Buffett's investing tenets can be followed by us mere mortals, there's one in particular that's tough: buying a good company when you'd rather be running away from it.

One example put forth by Andy Kilpatrick, author of Of Permanent Value: The Story of Warren Buffett, is Wells Fargo & Company (NYSE:WFC). Berkshire already owned a lot of Wells Fargo before the financial crisis, but Buffett continued to buy throughout the turmoil as the price plunged. Besides Wells Fargo, he also deployed capital into many areas during the crisis.

In addition, he's continued buying Wells Fargo even as the price has risen dramatically as the market recovered – and that's something else that average investors have trouble doing.

In this video from the Berkshire Hathaway annual meeting, Kilpatrick talks more about Buffett's successes, as well as some of his mistakes.

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4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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