The Biggest Mistake Warren Buffett Made With His Money

Warren Buffett has had plenty of great ideas and investments, but one place he parked the Berkshire Hathaway money more than 20 years ago still aggravates him to this day.

Patrick Morris
Patrick Morris
Jul 20, 2014 at 7:00AM

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.