But that doesn't mean Buffett's history is without a single mistake. Here are three of Buffett's worst ever investments.
1. An ego-fueled purchase of Berkshire Hathaway
Yes, one of Buffett's biggest ever mistakes was the purchase of the company he now runs day to day -- Berkshire Hathaway.
In 1962, Berkshire Hathaway was nothing more than a textile mill slowly losing business to cheaper foreign suppliers. Buffett thought that even though the business would eventually fail, the assets in the business made it an attractive investment.
In 1964, the company was run by a man named Seabury Stanson. He made a verbal offer to buy Buffett's stock at $11.50 per share. Buffett agreed. But when the offer came in writing, Stanson offered only $11.375 per share, a tiny haircut from his original offer.
This enraged Buffett, who then went on a mission to buy more shares of Berkshire Hathaway and fire Stanson. He did just that. But he later recounted that he overpaid for the poorly performing company, a mistake that had cost him hundreds of billions in lost profits from other, better companies.
2. Buffett's airline blunder
Buffett followers know the man is no fan of airlines. They're extremely competitive, require large amounts of investment capital, and hard to run profitably.
However, in 1989 Buffett acquired preferred stock in US Airways, securing a 9.25% dividend yield and the option to convert his $358 million in preferred stock into common stock at $60 per share.
US Airways headed down a troubled path. At the 1997 annual meeting of Berkshire shareholders, Buffett said his investment "was protected, but that was before Southwest showed up with 8-cent seat costs." At the time, US Airways seat-costs per mile were in the 12 cent range. US Airways simply couldn't compete.
By sheer luck and a bull market, Buffett later exited at a profit. But his exit came after serious mental stress, with the loss of dividend income for more than two years, and at the cost of many more millions from better investments he could have made instead.
3. A stinky shoe company
In 1993, Buffett acquired Dexter Shoes, an American shoe company. At the time, Buffett said the company earned $40 million per year pre-tax, and he acquired the company with 1.6% of Berkshire's stock.
Unfortunately, Dexter ran into competitive pressure. The profits dwindled, and Buffett chalks it up as one of his worst mistakes. Today, 1.6% of Berkshire Hathaway is worth nearly $5 billion. Dexter Shoes is, for all measurable purposes, essentially worthless. He traded partial ownership of a great business, Berkshire, for one destined to fail.
Fool contributor Jordan Wathen has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Berkshire Hathaway. Try any of our Foolish newsletter services free for 30 days. 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.