Laura Beck

Sat, Jun 21, 2025, 8:01 AM6 min read

Warren Buffett didn’t build his more than $100 billion fortune by being perfect. In fact, the Oracle of Omaha has been surprisingly candid about his biggest financial flubs over the decades. The good news is his mistakes offer valuable lessons for anyone trying to build real, sustainable wealth. Plus, they prove that even legendary investors are just humans who get it wrong sometimes. Welcome to the club!

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Here are Buffett’s top money mistakes and, more importantly, what he learned from them.

Buffett’s investment in U.K. grocer Tesco shows how hesitation can turn small problems into major losses. Berkshire owned 415 million shares by 2012, but when concerns about management surfaced, Buffett sold only part of his position for a $43 million profit.

When Tesco later overstated profits and shares collapsed, his delayed action cost Berkshire $444 million in after-tax losses. “An attentive investor, I’m embarrassed to report, would have sold Tesco shares earlier. I made a big mistake with this investment by dawdling,” Buffett said.

Speed matters in damage control. When red flags are abundant, sometimes quick decisive action means you avert a financial disaster.

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Believe it or not, Buffett has called Berkshire Hathaway “the dumbest stock I ever bought.” He purchased what was, at the time, a failing textile company because he felt insulted during a sale negotiation. Instead of walking away from Berkshire Hathaway as planned, his wounded pride led him to buy the entire business and fire the previous owner.

The financial cost was enormous. Buffett said his holding company would be “worth twice as much as it is now” if he’d stuck to his original plan of investing in insurance companies instead. This single emotional reaction cost him decades of better returns.

The takeaway is clear: Never let personal feelings influence money decisions. When you feel personally slighted in a financial deal, that’s exactly when you need to step back, take a breath and think logically.

In 1993, Buffett thought Dexter Shoes had lasting competitive advantages that would protect its profits. Within a few years, those advantages evaporated and the company became worthless.

Buffett explained: “What I had assessed as a durable competitive advantage vanished within a few years.”