Warren Buffett and other famous investors share their biggest money regrets
Eric Francis // Getty Images
Warren Buffett and other famous investors share their biggest money regrets
Close up photo of Warren Buffett of Berkshire Hathaway talking to members of the press at shareholders meeting.
You’ve probably heard the saying, “Rome wasn’t built in a day.” But those just getting into investing would highlight the lesser-known second half of that expression: “But it burned in one.”
Even the world’s most famous investors have been epically burned once or twice as their empires gradually grew. On the bright side, the rest of us can learn plenty from their mistakes, even if we’re just average folk using investing apps to make deals.
Grab some popcorn and go over these famous investors’ most painful investing regrets, as reported by Money.ca.
Warren Buffett
The regret: Buying his own company. Warren Buffett first invested in Berkshire Hathaway, a failing textile company, in 1962. He saw an opportunity to profit from more mills closing, so he loaded up on stock.
However, when the manager offered to repurchase Buffett’s shares a few years later, Buffett was enraged by his low offer. Fueled by spite, he purchased more shares instead and fired the manager — only to become the majority owner of a failing business.
Buffett estimates this move cost him USD$200 billion over the next 45 years.
The lesson: Don’t choose feelings over facts. Buffett, now known for his slow and steady approach to value investing, let the heat of the moment cost him billions. Now, he advises others starting to only invest in companies they believe in and focus on growing their portfolio with their eyes on the long term.
Jim Cramer
The regret: Selling stock he believed in. In 2012, the Mad Money host’s charitable trust decided to buy Bed, Bath & Beyond stock. Cramer had researched and believed in the company, purchasing several thousand shares.
At the time, brick-and-mortar retail struggled to compete with Amazon, and observers worried Bed, Bath & Beyond was not long for the world. But Cramer had done his homework and held onto the stock as it steadily dipped.
That is until it hit well below his cost basis and he decided to bail. Well, don’t you know it rose back up, passing the price he sold it at, the price he’d bought it at and well beyond.
The lesson: Stick to your guns. Cramer says if he had just held onto the stock, it would have been his trust’s best gains that year. Just imagine if he had held onto it when Reddit investors using the Robinhood app propelled BB&B to meme-stock status.
Now, he advises his followers to stick to their convictions. If you’ve done the work and you know something in your gut, don’t give up because Wall Street thinks otherwise. Chances are, you’re the one who’s right.
And even though Bed, Bath & Beyond closed its retail locations on July 30, 2023 (you can still shop online), the lesson remains — it’s not a one-and-done decision. Doing your due diligence on a stock is an ongoing process.
Suze Orman
The regret: Dumping Amazon. Suze Orman bought into Amazon in 1997, simply because she liked the name. Talk about great instincts. But she sold her shares when the company started to take off a few years later. Though she made a tidy profit on the trade, she now says she gets sick to her stomach thinking about what those shares would be worth today.
The lesson: Don’t duck out early. Orman doesn’t usually suggest buying into individual stocks — but when you do, and it’s a good stock — she says you should hold onto it for the long haul.
Even if you can’t afford to buy into those great forever stocks, some apps allow you to purchase fractional shares to get a share on a budget.
Dave Ramsey
The regret: Dealing with debt. Dave Ramsey started his entrepreneurial career at 12, but within a decade and a half, it all came crashing down on him.
In his early 20s, Ramsey had been making serious money flipping houses but relied on financing to secure his deals. When his largest lender, to whom he owed more than USD$1 million, was sold, the new bank demanded Ramsey pay off his debt within 90 days.
He could pay most of it down but was left with nearly USD$400,000 outstanding. He filed for bankruptcy at 28 years old, leaving him “broke and broken.”
The lesson: Build a safety net. After filing for bankruptcy, Ramsey’s investing approach changed. He still invests in real estate, but he doesn’t deal in debt. And for his followers, he no longer recommends using debt as a tool. Instead, he suggests focusing on avoiding debt, building up an emergency fund, saving for retirement and working with a financial advisor.
How it all applies to you
At the end of the day, even the smartest investors make missteps. But they continue to be successful because they get back up, dust themselves off and keep going.
What distinguishes these investors is their unwavering focus on the long term, a strategic approach that underpins their success.
So whether you’re just getting started or living on Easy Street, remember that investing isn’t a sprint — it’s a marathon.
Make sure you:
- Take the long view and focus on long-term plans like retirement
- Focus on slow and steady growth
- Get professional advice
- Invest only what you can afford
If you follow this advice, you’ll eventually find yourself in a position to look back and laugh, not cry, at your own investing mistakes.
This story was produced by Money.ca and reviewed and distributed by Stacker Media.
