The Big Lesson from Buffett's Berkshire Blunder

Warren Buffett, the famous investor, once called his purchase of Berkshire Hathaway his "biggest mistake. " He bought the company in 1962, thinking it was a cheap stock. But it turned out to be a bad investment in a failing textile business. He held onto it for years, even though it wasn't doing well. He later said that if he had put that money into a better business, like insurance, Berkshire would be worth twice as much today. He also learned that it's better to invest in good businesses rather than cheap ones. He kept the textile business for 20 years before finally giving up. He now says that if you're in a bad business, you should get out.Buffett also talked about how he gets offers to invest in tough businesses, but he doesn't take them. He says that in business, you don't get extra points for doing something hard. So, it's better to do easy things well than to struggle with hard things. He also said that he keeps businesses that aren't doing well, unless they're losing money or have big problems. He calls this "family management, " where you don't give up on your businesses easily. His partner, Charlie Munger, agreed with him and said he could have avoided this mistake if he had listened to him earlier.