Fessing up to mistakes isn't a problem for Warren Buffett and his longtime partner at Berkshire Hathaway (BRK.B 0.21%), Charlie Munger. The two are more than willing to acknowledge their errors, and that's a great lesson for investors.

Because mistakes happen
If you invest long enough, you'll have winners and losers. And those losers can sometimes be doozies like Buffett's loss in U.K. supermarket chain Tesco, which has seen its shares tumble 49% this past year on revelations that the company overstated its first half profit by $400 million. 

According to Berkshire Hathaway's annual letter to shareholders, Buffett and Munger own 301,046,076 shares of Tesco, at a cost north of $1.7 billion. That makes Berkshire Hathaway the third-largest owner of Tesco shares, which means that the company's losses on the investment are in the neighborhood of an eye-bruising $700 million.

Tesco's slide to 11-year lows makes its shares the worst performing among the FTSE 100 this year, but Tesco isn't Buffett and Munger's first mistake and it won't be their last mistake either.

Dusting yourself off
Buffett's mistake with Tesco stems not from a failure to understand its business. Tesco is a dominant retailer, operating in 11 countries, that trails only Walmart (WMT -0.32%) in terms of revenue and sales. As one of the planet's biggest retail operators, with an impressive 30% grocery market share in the U.K., Tesco is clearly a big player worthy of a long-haul investment.

Instead, Buffett and Munger's mistake is the result of poor timing and ostensibly mismanagement at Tesco's highest levels. Yet, while those excuses lend plenty of cover, Buffett didn't shy away from taking the blame.

In an interview with CNBC on Oct. 2, Buffett said, "I made a mistake on that one more than anybody else made a mistake ... That was a huge mistake by me."

His willingness to take responsibility for buying Tesco ahead of its steep drop speaks volumes about Buffett's character and suggests that even if you follow a proven discipline such as buying great companies with competitive advantages that are selling at reasonable prices for the long term, sometimes you can still end up with a dud.

In Janet Lowe's book Damn Right: Behind the Scenes with Berkshire Hathaway Billionaire Charlie Munger, Munger addresses the issue of losing investments by saying: "I've been through a number of down periods. If you live a long time, you're going to be out of investment fashion some of the time." 

In his 2003 letter to shareholders, Buffett echoed Munger's view, writing, "In buying businesses, I've made some terrible mistakes, both of commission and omission." But he was also quick to add that, "Overall, however, our acquisitions have led to decent gains in per-share earnings."

Munger and Buffett's comments remind investors that mistakes should be taken in stride and shouldn't distract from the bigger picture of long-term success. It might be tempting to toss aside proven strategies during market swoons, but staying focused on what works over time is a better approach.

That might mean remembering that, time and time again, it has been proven that investors who take a long-term view do better than those who think for the short term. It might mean focusing on buying stocks you know and understand, rather than chasing hot penny stocks. And it might mean sticking with a low-cost investment approach that includes using discount brokers, index mutual funds, and exchange-traded funds, which can help more of your investment dollars go to your nest egg rather than Wall Street bonuses.

The bad with the good
There are many ways to manage your money successfully. Some investors will focus on value companies, others will embrace growth stocks, and many others will rely on mutual funds in retirement plans to do the heavy lifting.

Understanding that risk exists in any investment approach helps you decide which approach best suits you. After all, we're all a bit different. As Munger says in Lowe's book, "If losses are going to make you miserable -- and some losses are inevitable -- you might be wise to utilize a very conservative patterns of investment and saving all your life."