Warren Buffett hasn’t made many mistakes. You don’t arrive at an investment company worth half a trillion dollars and a personal net worth of over $80 billion if you take all the wrong exits.
But it’s exactly because his list of errors is so short that it’s interesting to look at. What kind of mistakes did he make? Of course, Warren has spent a great deal of time thinking about that himself.
“The biggest mistakes I've made, by far, are mistakes of omission and not commission. It's the things I knew enough to do, they were within my circle of competence, and I was sucking my thumb. Those are the ones that don't show up any place.”
Omission, not commission.
As an example, he mentions the world’s fifth-largest financial services company Fannie Mae. In the 80s, they were in trouble, and Buffett could’ve bought the whole company cheaply, but didn’t.
“That never shows up under conventional accounting. But I know the cost of it. I know I passed it up.”
And so it goes that, in this list of 15 bad investment calls he made, I spot only six where he chose the wrong company. The rest was not doubling down on great companies - or missing out altogether.
Buffett also admits he doesn’t always mention these mistakes in his annual reports, which means there are many more missed opportunities his investors never find out about. This one about an NBC radio station in Dallas is an exception.
What’s the big lesson?
Most of your mercy must be reserved for the things you didn’t do.
We all make mistakes. As we get older, it gets a little easier to forgive ourselves for them. Because each time we make another one, we realize the world keeps turning.
Regrets about inaction, however, carry the same weight each time. Because you can always spend weeks wondering what if. They’re a fantasy. An alternate reality you never got to live.
That’s much harder to let go than anything we did. Especially because we can fix most things. Little in life is irreversible. But you can’t go back in time.
The next time you miss out, remember: omission sucks more than commission, but it’s equally worth forgiving. You might miss more shots because you never took them, but, as Warren Buffett shows us, even those needn’t keep you from living a happy life.
So don’t worry about your missteps. But be graceful about what you didn’t do.
About Forgiveness Wednesday: No matter how the week starts, by Wednesday, we’ve had enough time to kick ourselves. We’re human. We make mistakes, we regret them, and we blame ourselves. But the only way we can keep moving on is if we forgive ourselves and those around us. So every Wednesday, forgiveness is what we’ll practice.
Let’s be kind to ourselves so we can succeed.
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