Dr. Gisela Baur is a longterm friend of Warren Buffett. Last year she released a biography on the the superinvestor from Omaha (Warren Buffett – Der Jahrhunderkapitalist). We had the pleasure to talk with her about the mistakes Warren Buffett made. With that we want to help you learn from the best investment mistakes great investors did.
Dr. Gisela Baur: What Were Warren Buffett’s Mistakes?
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Dear Mrs. Barr will it come to our YouTube channel. You’re an author and you’ve written a biography about Warren Buffett. We want to discuss. The best mistakes of Warren Buffett with you. Would new opinion be a mistake. Warren Buffett did and he learned a lot about.
OK. I think what he would say to be his biggest mistake is Berkshire Hathaway, his holding company. The fact that he started to invest his money and the money of his partners. In a public company where he only owns about 30 something percent so everything he earns is spread among a big group of shareholders. He was he. He did write in an annual report. This was the biggest mistake he ever made. But I think it’s. It’s nothing making him sleepless or sad or angry because he just likes to by the way likes having a public company likes having a lot of partners likes having annual meetings and writing his letters and get response.
It’s kind of worth it for him.
There are two mistakes he made when he was younger. The first one is pretty famous when he bought this shares as city services for him and his sister at age eleven or twelve.
And he bought it and it started to drop and his sister was give him a hard time ever did it. When they went to school. And. It came back and he sold it was a small profit and afterward it just exploded. So it kind of triples five or something even even more. And everybody sees this as the lectern and patient be patient. I think it’s it was a lot to learn in an electorate. And then being patient. But it is well in know what you buy because you didn’t know a lot about this company and he felt. How it feels if you don’t know what’s gonna happen because it or not the company and especially if you do it with. The money of somebody else. Second really important mistake he made was when he was at the horse waiting. I’d like to bet. Bet in a way that’s close to his investing. He analyzed the the the tracks of the horses and stables and the the field and he he built up big statistics and. He was pretty successful in that. But one day he lost he lost money. And he started to try to win it back. And at the end of this day he said was one hundred and something dollar. Loss which was really much money for him. A lot of money for him in that time. So there was a legend about don’t get into this. I don’t such an investment as a single action and I look at the risk and the chance. But in this mechanism of I want my money back I’m going to play this I’m going to do this.
And he never did anything like that again. So he learned from these mistakes.
One thing which is funny for me I did it twice. One mistake I was not seeing globalization come. He did it first when he bought Berkshire Hathaway textile company. In the mid of the movement of this industry to to the cheaper. Places in the world. Emerging markets mainly. He bought it and they didn’t it didn’t work out. And he did. The same mistake not seeing globalization making this industry not profitable in the years ago and anymore. With sticks the shoes. And he even doubled his mistake by paying restriction shares. So this mistake Dexter Shoes didn’t survive the movement of the industry. And he paid was Berkshire shares worth I don’t know how many billions now.
So that was an expensive phone. And he did it twice. I see his mistakes more as. Development. Steps. Or experience or so. And I think he does as well.
He’s very open with his mistakes in every and report. You’ll find. I did this wrong. And this costs always so. But he’s. He’s looking at it as a very unemotional.
And its experience. He tries to learn.
Thank you very much. Paul.