Warren Buffett’s $1 Billion Mistake

Even the greatest investor of all time made a huge blunder.

Buffett once called it the biggest mistake of his career.

But that failure is what made him legendary.

Here’s the surprising story—and the lesson that changed everything 🧵

The Berkshire Hathaway Disaster

In the 1960s, Buffett bought Berkshire Hathaway, a struggling textile company.

He thought he could turn it around.

Instead, he got stuck in a dying industry:

Competitors had cheaper labor and power

Profits were nonexistent

The future looked bleak

Yet Buffett refused to quit—for years.

Buffett’s Costly Loyalty

Rather than cutting his losses, Buffett doubled down.

He even bought another textile company, hoping to fix the problem.

But it was a money pit.

Buffett later admitted it was “an absolutely hopeless hand.”

So why didn’t he walk away sooner?

One reason: Loyalty.

Buffett had a great manager running the mill.

He was hardworking.

He was honest.

He was dedicated.

“If he’d been a jerk,” Buffett admitted, “it would’ve been easier to shut it down.”

But loyalty was draining his resources.

He had to make a tough decision.

The Turning Point

Buffett realized something critical:

Running a bad business is like swimming against the tide.

No matter how smart you are, you’re fighting a losing battle.

So, he made a bold pivot:

1. Shut down the textile mills

2. Reinvest in insurance

That move changed everything.

The Pivot to Insurance

Buffett used Berkshire’s cash flow to buy an insurance company.

That decision transformed Berkshire forever:

Textiles → Insurance

A struggling business → A $700B empire

Buffett’s biggest mistake → His greatest success

Looking back, Buffett called Berkshire Hathaway his “biggest investing mistake.”

Why?

Because keeping it alive cost him time and money he could’ve spent on better investments.

But here’s the twist:

That failure taught him the most important lesson of his career.

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