Warren Buffett Said This 1 Mistake Cost Berkshire About $10 Billion. Here’s How Investors Can Avoid It.
Buffett said that hesitating over a small price gap on Walmart cost Berkshire about $10 billion. Here’s how to avoid the same trap.
Warren Buffett admitted that one of his biggest investment blunders was not completing the purchase of Walmart shares. In 2004, he intended to buy 100 million shares at a pre-split price of $23, but the price rose slightly, causing him to wait for a price drop, which never materialized. This anchor led to a significant missed opportunity, costing Berkshire Hathaway about $10 billion.
Buffett's mistake was tied to his anchoring to a price on a good stock, a common trap many investors fall into. However, this lesson has shown that a small premium for a high-quality business like Walmart is negligible compared to the potential gains, while waiting for the price to drop can result in losing the entire upside. The key takeaway is to decide a stock's intrinsic value, set purchases in advance, and weigh any premium against the expected upside, so discipline in investing doesn't cost you the opportunity to profit.
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