Want to bend it like Buffett? 👴 Investing GOAT Warren Buffett may have built the most expensive stock in the world — inching towards US$700K per share — but the Oracle of Omaha hasn’t always got it right. Yep, even some of Buff’s stuff’s been a bit rough (sorry!), losing him and his company billions of dollars. 

Buffett turned 94 in ‘24. But despite his company Berkshire Hathaway’s (BRK.A, BRK.B) ‘medium risk’ ESG rating, he may have buffeted around other scores in his 34,333 days on planet Earth while amassing his net worth US$143 billion personal fortune — one his kids won’t inherit (more on that below). 

The most famous US investor?

Even seasoned investors can make billion dollar mistakes. 🤦‍♂️ Buffett sits among the world’s greatest investors, and Investopedia describes him as ‘one of the most successful investors in history’. But proving that investors can recover from costly blunders, he says the ‘dumbest stock’ he ever bought was Berkshire Hathaway. 

In a self-proclaimed malicious move, he lost US$200 billion going all in on a doomed textile company named, ah-hem, Berkshire Hathaway, in 1964 — when Nvidia (NVDA) CEO Jensen Huang was just one year old: 

‘The truth is, I had now committed a major amount of money to a terrible business. … But always, we were carrying this anchor. And for 20 years, I fought the textile business before I gave up. As instead of putting that money into the textile business originally we just started out with the insurance company, Berkshire would be worth twice as much as it is now.’ — Warren Buffett, CNBC Squawk

While Huang was only just finding his feet, at the time, Buffett wasn’t dancing, burdened instead with the anchor of a failing business. 

But Buffett’s fortunes turned around when he took a leaf from his ‘most trusted partner’ and confidant, former vice chairman of Berkshire Hathaway Charlie Munger, changing his investing approach to value investing. That’s buying undervalued businesses with strong fundamentals at a reasonable price and keeping them for the long term. 

This was a shift from his prior ‘cigar-butt’ habit, which was buying companies on their last gasp and sucking the remaining life out of them.

‘It’s far better to buy a wonderful company at a fair price, than a fair company at a wonderful price.’ — Warren Buffett

Today, that same-named former failing textile company — which is still owned by Buffett — has a market cap of nearly US$993 billion, and is worth its weight in gold for the lessons he learned in flipping his investment strategy. 

But Buffett doesn’t fear failure. While he’s made many costly mistakes, he accepts mistakes are part of life

‘You’re going to make mistakes in life, there’s no question about it. You don’t want to make them on the big decisions, who you marry and things like that. So there’s no way I’m going to make a lot of business and investment decisions without making some mistakes. I may try to minimise them. I don’t dwell on them at all. I don’t look back. The triumphs in life are partly triumphs because you know that everything isn’t going to be a triumph.’ — Warren Buffett, the Financial Times

Is Buffett giving away all his money?

Warren Buffett has pledged to give away 99% of his money. 💸 The investing anti-hero admitted he won the ‘ovarian lottery’ where ‘being male and white also removed huge obstacles’. 

‘I have a common belief that dynastic wealth, though both legal and common in much of the world including the United States, is not desirable. Moreover, we have had many opportunities to observe that being rich does not make you either wise or evil.’ — Warren Buffett, Berkshire Hathaway news release November 2023

But even being a white male, or having Munger by his side, didn’t buffer Buffett from the fallout of Tesco’s 2014 accounting scandal, which wiped £2 billion from the UK supermarket chain’s value. 

While an arbiter of slow ‘n’ steady when it comes to getting (really, really) rich, Buffett’s tortoise-like pace lost investors US$444 million — a 1% slice of Berkshire’s net worth at the time. 

Berkshire bought Tesco (TSCO.L) stock in 2006, and following four profit warnings in 2013, Buffett sold 114 million of his 415 million Tesco shares, admitting later, ‘I’m embarrassed to report, I would have sold Tesco shares earlier’:

‘My leisurely pace in making sales would prove expensive. Charlie calls this sort of behaviour “thumb-sucking”. Considering what my delay cost us, he is being kind. … 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.’ Warren Buffett, Berkshire Hathaway 50th annual letter to shareholders

Berkshire has been stashing the cash. 💰 But with a record cash pile of US$277 billion still in the kitty after a large stock sell-off — including 389.4 million Apple shares — money still reigns at Berkshire in Buffett’s 95th year. Reminding us of his turnaround from huffing on cigar butts, to breathing in cash:

‘Cash, though, is to a business as oxygen is to an individual: never thought about when it is present, the only thing in mind when it is absent.’ ― Warren Buffett, The Essays of Warren Buffett: Lessons for Corporate America

‘Nuff said.

Learn more about Warren Buffett

📖 Read: The Warren Buffett Way, by Robert G. Hagstrom 

🎧 Listen: The Investors Podcast

📱 Watch: @WB.wisdoms on Instagram

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