Following are just some of the priceless excerpts (actually, according to Buffett the price was $200 billion dollars, yikes).
- Why you should not allow emotions to take over your better business reason and instincts.
- Why not recognizing sunk costs can cost you $200 billion dollars.
- Why trying to run a business you know nothing about is a bad idea.
- Why opportunity costs should always be considered.
Why you should not allow emotions to take over your better business reason and instincts.
During an interview on CNBC this morning Warren Buffet said Berkshire Hathaway was the "dumbest" stock he ever bought. "He calls his 1964 decision to buy the textile company a $200 billion
dollar blunder, sparked by a spiteful urge to retaliate against the CEO
who tried to "chisel" Buffett out of an eighth of a point on a tender
deal. >>read more
Why not recognizing sunk costs can cost you $200 billion dollars.
BUFFETT: "...And for 20 years, I fought the textile business before I gave up. As
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. So—"
Why trying to run a business you know nothing about is a bad idea.
BUFFETT: This is $200 billion. You can— you can figure that— comes about.
Because the genius here thought he could run a textile business. (Buffet laughs) >>read more
Why opportunity costs should always be considered.
CNBC: Why $200 billion?
BUFFETT:
Well, because if you look at taking that same money that I put into the
textile business and just putting it into the insurance business, and
starting from there, we would have had a company that— because all of
this money was a drag. I mean, we had to— a net worth of $20 million.
And Berkshire Hathaway was earning nothing, year after year after year
after year. And— so there you have it, the story of— a $200 billion— >>read more
