Back in 2010, Warren Buffett said the biggest mistake he made cost him $200bn. He was referring to the initial purchase of Berkshire Hathaway more than 50 years earlier. "Berkshire Hathaway," he said, "was carrying this anchor, all these textile assets. So initially, it was all textile assets that weren’t any good. And then, gradually, we built more things on to it. But always, we were carrying this anchor. And for 20 years, I fought the textile business before I gave up. [If] instead of putting that money into the textile business originally, we just started out with the insurance company, Berkshire would be worth twice as much as it is now … This is $200bn." The cost of that mistake keeps getting bigger. It was a $200bn mistake in 2010 when Berkshire was less than half its current value. As Berkshire increases in value the compounded cost of that mistake grows along with it. Now imagine that Buffett’s original way of thinking about business and investing hadn’t changed over time. ...
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