Warren Buffett didn't amass his huge fortune by making a lot of mistakes. But he readily admits to making some over the years.

Failure can be a great teacher. Just as we can (and should) learn from our own mistakes, we can also learn from the mistakes of others. Here are seven lessons from the Oracle of Omaha's blunders that will help you become a better investor.

Warren Buffett

Image source: The Motley Fool. 

1. Don't make a decision too quickly

In his 2013 letter to Berkshire Hathaway (NYSE:BRK-A) (NYSE:BRK-B) shareholders, Buffett told the story of the time he bought $2 billion of debt of Energy Future Holdings. The company was formed in 2007 with the goal of finalizing a huge leveraged buyout of electric utility assets in Texas. Buffett's biggest regret about the deal was that he made it without consulting his longtime partner, Charlie Munger.  

Few people are fortunate enough to have someone like Charlie Munger to go to for counsel. But we can all strive to avoid what Warren Buffett did: He made the decision too quickly. It's better to add a little distance before finalizing your decision on an investment -- even if it's much smaller than Buffett's $2 billion mistake.

2. Fully evaluate the company and the industry

Buffett wrote to Berkshire shareholders in 2015 about his track record with the company's manufacturing, service and retailing operations. Most made solid returns, but not all of them. In most of the cases where business weren't performing as well, he admitted to being wrong in his evaluation of the business or the industry in which it operates.

Perhaps the biggest example of Warren Buffett being wrong in his assessment of an industry was with Berkshire Hathaway itself. He had the opportunity to sell his stock of what was then a textile manufacturer and make a nice profit. But instead, Buffett kept on investing more into what he later confessed was a dying business. In 1985, Berkshire's textile operations were finally shut down.

No one will get it right all the time, of course. But make sure you don't have blinders on when it comes to buying a stock. Research not only the company but the industry as well. 

3. Check out the competition

On a somewhat related note, Buffett noted in his 2014 shareholder letter that one of his "most gruesome" mistakes was not checking out the competition for Dexter Shoes before buying. When he bought the company in 1993, everything looked great. What Buffett didn't realize at the time, though, was that foreign competition was about to rear its head. The initial $443 million investment on Dexter Shoes fell to zero. 

Regardless of what stock you're buying, what industry it's in, or the size of the investment, check out the competition. The landscape is littered with companies that used to be solid but ultimately couldn't compete against better, faster, and/or cheaper rivals.

4. Don't invest with money better deployed elsewhere

To make matters worse with the Dexter Shoe deal, Warren Buffett used Berkshire Hathaway stock to fund the transaction. The shares that he gave in exchange for Dexter would have been worth $5.7 billion when Buffett wrote the 2014 letter. (Berkshire's stock has gone up more than 40% since the beginning of 2014, so the snafu looks even more disastrous now.)

There's an important lesson for average investors: Don't invest money in a stock that is better deployed elsewhere. Sometimes the worst thing in the world you can do is to sell a winning stock to buy shares of a company that you think might perform well. If a stock is making solid returns and its business fundamentals are solid, hold on to it.

5. Don't second-guess yourself too much

Berkshire Hathaway bought General Reinsurance Corporation in 1998. Shortly thereafter, Warren Buffett began to doubting his decision. There were problems that caused outside observers to think that the billionaire had blundered big-time. But Buffett's mistake wasn't in buying General Re; His mistake was in second-guessing himself. General Re turned out to be, in Buffett's words, "a gem." Luckily, he didn't sell the company before re-evaluating.

Perhaps the best lesson to learn from this is to not second-guess your decisions too much. Give some time for the stocks you've picked to either pan out -- or not. 

Man pushing sell button

Image source: Getty Images.

6. Never dawdle when it's time to sell

Contrary to what some might believe, Warren Buffett isn't a buy-and-hold-forever kind of guy. He sells stocks routinely. In 2013, Tesco was listed among Berkshire Hathaway's largest holdings. A year later, the food retailer wasn't on the list at all. Buffett confessed to making a mistake with Tesco by "dawdling" when he should have sold earlier. (Charlie Munger, by the way, refers to waiting too long to sell as "thumb-sucking.")

Tesco had management problems and accounting problems that seemed to worsen every month. Buffett's quote about this situation is classic: "In the world of business, bad news often surfaces serially: You see a cockroach in your kitchen; as the days go by, you meet his relatives." What's the moral of the story? When it's time to sell, sell. 

7. Don't procrastinate

Speaking of dawdling, Warren Buffett's biggest mistakes of all were procrastination of a different kind. In 2014, he told shareholders that almost all of his most colossal errors were in not buying a stock when he should have. 

Buffett specifically referenced his regret in not buying Walmart (NYSE:WMT) stock years earlier. He even mentioned the giant retailer in his 1990 letter to shareholders, referring admiringly to how Walmart's low operating costs allowed it to sell at prices that competitors couldn't match and therefore constantly increase market share. But Buffett didn't buy Walmart stock until 2005. Berkshire has since sold off most of its shares in the retailer. 

This mistake is probably the biggest mistake made by every investor. Don't dawdle or thumb-suck when it's time to buy a stock. Warren Buffett estimates that Berkshire's value would be worth at least $50 billion higher if it had seized opportunities earlier on. It's probably not nearly that amount, but you could be leaving money on the table, too, by not buying stocks when you should.