Warren Buffett Said Charlie Munger and 'I Have No Magic Plan' to Boost Wealth Except Rush Outside 'Carrying Washtubs' When 'Dark Clouds Rain Gold'

Despite beating the marketplace for decades and turning a failing textile mill into 1 of the world's astir admired concern empires, Warren Buffett is known for his humility. He often speaks frankly astir the mistakes helium has made during his vocation and shares the lessons helium learned with the public.

In his missive to Berkshire Hathaway Inc. (NYSE:BRK, BRK.B)) shareholders earlier this year, Buffett said galore ample nationalist companies dainty admitting mistakes arsenic a "taboo" and called delaying the correction of errors a "cardinal sin." He said helium has made mistakes successful evaluating companies for acquisitions and successful judging the radical helium hired.

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Buffett made immoderate "dumb" mistakes successful acquiring businesses that aboriginal turned retired to beryllium atrocious investments, helium said successful his 2016 missive to Berkshire shareholders.

The billionaire, who volition measurement down arsenic Berkshire CEO astatine the extremity of this month, said successful that missive that helium and then-Vice Chair Charlie Munger were "stewards" of their superior with a occupation to present beardown returns contempt marketplace headwinds.

"Charlie and I person nary magic program to adhd net but to imagination large and to beryllium prepared mentally and financially to enactment accelerated erstwhile opportunities contiguous themselves," Buffett wrote. "Every decennary oregon so, acheronian clouds volition capable the economical skies, and they volition concisely rainfall gold. When downpours of that benignant occur, it's imperative that we unreserved outdoors carrying washtubs, not teaspoons. And that we volition do."

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Buffett successful 2016 talked astir the modulation Berkshire made successful the aboriginal 1990s to absorption much connected acquiring businesses and the mistakes helium made during the process. He said buying Dexter Shoe for $434 cardinal was a "particularly egregious error" arsenic the concern aboriginal became worthless. Another "error" helium made was "foolishly" utilizing Berkshire shares to bargain General Reinsurance successful precocious 1998, a determination that caused shareholders to springiness acold much than they received, Buffett wrote.

"As is the lawsuit successful marriage, concern acquisitions often present surprises aft the ‘I do's,'" Buffett said. "I've made immoderate dumb purchases, paying acold excessively overmuch for the economical goodwill of companies we acquired."