The Big Lesson from Buffett's Berkshire Blunder

Warren Buffett, the famous investor, once called his purchase of Berkshire Hathaway his "biggest mistake."

The Textile Business Blunder

• Year of Purchase: 1962
• Reason: Thought it was a cheap stock
• Reality: Turned out to be a bad investment in a failing textile business
• Duration: Held onto it for 20 years
• Lesson Learned: It's better to invest in good businesses rather than cheap ones

"If I had put that money into a better business, like insurance, Berkshire would be worth twice as much today."

Business Philosophy

• Avoid Tough Businesses: Buffett gets offers to invest in tough businesses but declines.
• Focus on Easy Things: "In business, you don't get extra points for doing something hard."
• Family Management: Keeps businesses that aren't doing well unless they're losing money or have big problems.

Charlie Munger's Perspective

• Agreement: Munger agreed with Buffett's philosophy.
• Advice: Buffett could have avoided this mistake if he had listened to Munger earlier.