What We Can Learn From Warren Buffett's Mistakes Going Forward

Summary Berkshire Hathaway is often lauded for Warren Buffett's legendary long-term value investing success and influence. I challenge Buffett's GOAT status, arguing his strategies thrived in a bygone era where value outperformed growth and technology was less dominant. BRK.B's performance has lagged the S&P 500 over the past 17 years, with a 445.77% total return versus the S&P's 554.84%. Buffett's inability to adapt to new market realities and innovation undermines his reputation for consistent outperformance. Common sense might suggest if you follow the advice of someone who was successful in the past, it will help you succeed too. But that's actually not always the case; sometimes you should try to do things differently than those who have achieved success in an outdated world, as adaptation to the modern world is essential. Recently retired Berkshire Hathaway ( BRK.A ) ( BRK.B ) CEO Warren Buffett is often called the " GOAT " (Greatest Of All Time) in investing, business, and capitalism by many financial commentators, pundits, CEOs, and investors, recognizing his unparalleled long-term success and influence in the financial world, as seen in headlines from several media sources, including CNBC, Yahoo Finance, Simply Wall Street, and others, along with numerous social media posts. Reasons he is called the GOAT: Long-Term Success: Warren Buffett's consistent, monumental, decades-long success in value investing and building Berkshire Hathaway and historical outperformance of the S&P 500 from 1965 to 2025. Wisdom & Guidance: He's seen as a source of immense financial wisdom, influencing many past, current, and upcoming generations of investors. Capitalism Icon: Figures like the Brooks Running CEO call him the "GOAT of capitalism" for his principles and accomplishments. Legacy: His impact is so remarkable that terms like "Oracle of Omaha" or "Sage of Omaha" also highlight his legendary status, but "GOAT" has become a very popular modern descriptor for his achievements. Berkshire Hathaway produced a 5 million percent return during Warren Buffett's 60-year reign as CEO. Let's Start by Admitting He's Actually Not the "GOAT" I would argue that this reputation, as the "GOAT," is undeserved, unwarranted, overrated, and certainly no help to the modern-day investor looking to become as successful as him or replicate him in some way. Sure, Warren Buffett did some amazing things in his youth that led to Berkshire Hathaway's massive growth in early years, during a period where value outperformed growth, a period where conditions were just right for Warren's strategies to thrive... He may have been the "greatest" of his time, in the early days of Berkshire Hathaway, but all time? He has failed at adapting to new realities as growth, technology, innovation, social media, cryptocurrencies, and artificial intelligence have become major themes in today's world. His investing methods seem like they are stuck in the past, afraid of new ideas, change, technology, growth, and innovation. His approach has become, in my opinion, so narrow-minded that he's incapable of thinking outside the box and entertaining nontraditional ideas. However, we can certainly learn from Warren's mistakes, study what he did wrong, and become more prepared to invest in the future, using methods that Warren Buffett would never touch and developing a deeper imagination and thought process of what achievements are possible going forward. Berkshire Hathaway Versus the S&P 500: A Changing Dynamic Berkshire Hathaway had outperformed the S&P 500 over every 5-year period for many years, until 2008-2013 came along, where it underperformed for the first time. In Berkshire's 2013 annual shareholder letter , he wrote, "Over the stock market cycle between year-ends 2007 and 2013, we overperformed the S&P. Through full cycles in future years, we expect to do that again. If we fail to do so, we will not have earned our pay." So he was stretching the goalpost from 5 years to 6 to define (or redefine) what constitutes a 'full market cycle.' But his prediction/expectation that Berkshire would (perhaps consistently) outperform the S&P 500 over full-market cycles didn't really pan out the way he suggested in that letter. Over the past 17 years (2008-2025), the S&P 500 outperformed Berkshire Hathaway by a margin of 554.84% to 445.77% (when accounting for reinvested dividends). Granted, in his 2015 annual shareholder letter, Warren Buffett did clarify that, due to Berkshire Hathaway's immense size, "I think Berkshire will outperform the average American company, but our advantage, if any, won't be great,"... So he admitted there wouldn't be significant outperformance (like in Berkshire Hathaway's early years) but still seemed to imply there would be mild outperformance. I don't think that mild outperformance really ever came to fruition, although it depends on which time period you're looking at, as Berkshire Hathaway did outperform the S&P 500 over the past five years, but not the past three, ten, or seventeen. What we learned about Berkshire Hathaway's expected future performance going forward: We can say that this mild outperformance over the S&P 500 may happen over some periods but is no longer happening consistently and reliably, as it did before 2013. And periods of underperformance may last a long time, such as ten to seventeen years, or even longer, especially in a growth environment. The "Greatest (Investor) of All Time" Told Us to "Stay Away" From the Greatest Investment of All Time A $1 investment in Bitcoin ( BTC ), ( IBIT ), or ( FBTC ) in 2010 would have grown to over $1.62 million in 2025. While exact estimates vary, sources indicate that Bitcoin's return since its inception in 2009 to the present day represents millions of percentage gains, with some sources citing over 9 million percent or even 162 million percent returns from its earliest days. (Bitcoin generated a higher return than Berkshire Hathaway's 5 million percent gain (which took 60 years) in about one-fourth of the time or less). The fact is, Bitcoin has outperformed every asset or stock in history, including Nvidia, Apple, Tesla, Amazon, Google, and Berkshire Hathaway, since its inception in 2009. It's a numerical fact. Bitcoin first delivered a 100x return within a few months in 2011. (before it was very well-known). After gaining widespread media attention for the first time around 2013 at $100/coin, it delivered another 100x return within four years, to $10,000/coin in 2017. So this took about four years (2013-2017). By contrast, it took Berkshire Hathaway somewhere around two decades (after Buffett took over in 1965) to deliver its first 100x return, from $19 to $1900. Warren Buffett made his first of many anti-Bitcoin comments in an interview on CNBC in March 2014, when it was trading around $600 at the time, telling investors to "stay away" from Bitcoin, calling it a "mirage." (After this interview, Bitcoin did go down to the $200 range for a little while in 2015, but this correction proved to be quite temporary, as it came back stronger and soared to new heights in 2017). In 2018, Warren Buffett said , "In terms of cryptocurrencies, generally, I can say with almost certainty that they will come to a bad ending." While Bitcoin did have a lot of volatility along the way, I don't think such a "bad ending" really ever materialized, considering that Bitcoin is trading much higher today than when Warren Buffett made this statement and has gained a lot of mainstream acceptance (such as the creation of spot ETFs and the U.S. creating a Strategic Bitcoin reserve). I believe Warren's failure to identify this opportunity and telling investors to "stay away" from it is a big stain on his legacy and reflects an old mind stuck in the past, unwilling and unable to think outside the box and adapt to a new reality. The numbers speak for themselves; Bitcoin's 16-year return exceeded Berkshire Hathaway's 60-year return. The lesson here: When you see a new, untested idea, you should try to imagine and entertain the possibilities for it, even if such a reality might seem crazy, silly, and far-fetched at first glance. Bitcoin is not a "mirage," and it's not something to "stay away from." It's a fast-growing and increasingly mainstream part of our modern world's economy, widely seen as a digital version of gold , with characteristics like scarcity, decentralization, durability, fungibility, divisibility, portability, a store of value, and maybe, to some extent, a currency. (Although I'm not big on using the term 'currency,' as its ability to grow isn't totally dependent on being accepted as payment with mainstream retailers.) It's also widely seen as " The People's Money, " or money that is resistant to government control. Bitcoin deserves a place in every diversified portfolio. A Presidential Bet While I don't normally write about politics on this platform, I would like to discuss a time when Warren Buffett spoke about a big political event and demonstrated that he refuses to entertain nontraditional ideas. Warren Buffett never made public predictions about political election outcomes before...until that changed one day: In October 2014, Warren Buffett was a featured guest speaker at Fortune's Most Powerful Women summit, and he said he would "bet money" on Hillary Clinton winning the 2016 presidential election (before she even announced her candidacy). He added, "I will bet money, and I don't do that easily." He repeated this prediction a few times throughout the election campaign season (at one point hedging a little, saying she will win as long as she stays healthy), and he turned out to be wrong. She was healthy, she was not under criminal indictment, she was on the ballot as expected, and she lost the electoral college by a vote of the people. While it's unknown if Warren Buffett really did bet any money on this, he may have influenced his fans and followers to do so. These ' prediction markets ' do trade like a stock. Hillary Clinton was the establishment candidate, and Donald Trump was certainly a nontraditional candidate. The fact that Warren Buffett was unable to entertain the possibility of a nontraditional candidate winning, in my opinion, shows that Buffett's philosophy was very narrow-minded, unable to think outside the box and imagine a different reality...similar to how Warren has been known to avoid investing in disruptive and revolutionary technology among his stock picks within Berkshire Hathaway. The Lesson: From this presidential bet, we should learn to imagine the possibilities of strange things coming true. We should not be stuck in the mindset that the traditional and 'normal' events will transpire the way we expect. Instead, we should be prepared for nontraditional, exotic, crazy, strange, and chaotic events to become reality and react accordingly. We should expect a 'truth is stranger than fiction' kind of world, because strange things have already happened that may not have previously seemed possible. That goes for stocks, politics, technological developments, and personal goals in daily life. Although we should still balance this type of thinking with realistic expectations, I believe that the level of what should be considered 'realistic' has expanded into a broader universe. Late to the Party on World-Changing Technology Granted, I will give Buffett credit for investing in Apple ( AAPL ) in 2016 and Google/Alphabet ( GOOG ) ( GOOGL ) in 2025, but his followers and investors should be very disappointed that he waited so long to do so. Apple did go up about 10x since 2016, but if he bought around 2006 or 2007, he could've been looking at a 100x return. In 2012, Buffett flat-out said he wouldn't buy Apple or Google. He was more interested in IBM ( IBM ), his first major technology investment, which he bought in 2011, which didn't perform very well around that time and lost a lot of value from 2012 to 2015 before he eventually sold it in 2017 and 2018. Buffett actually did learn something from his IBM mistake. He bought it because he thought it would be difficult for large corporations to switch from IBM for their critical IT needs, creating a possible moat around their business. However, he learned to focus less on 'stable but stagnant' enterprise tech and more on disruptive, consumer-centric technology with powerful branding. He finally realized that enduring moats in tech come from an ecosystem lock-in and brand loyalty rather than just enterprise necessity. It was his mistake at IBM that may have contributed to him investing in Apple later on in 2016. While it's nice to see he finally came around to buying Apple and (later on) Google, this falls under the category of 'better late than never.' Especially considering that in 2015, Google morphed into Alphabet , a conglomerate of sorts, taking a page out of Berkshire Hathaway's playbook, structured to maximize good allocation and reinvestment of capital and foster transparency of income streams and operational costs, not too dissimilar from Berkshire Hathaway's structure. You'd think Warren Buffett could've appreciated that and taken a hint from it. Utilizing a conglomerate structure is what contributed to Berkshire Hathaway's success, as it created benefits such as diversification, decentralized management, and a powerful system for appropriate capital allocation in financing. Not many companies have replicated Berkshire Hathaway's success using this model, although Google's decision to use this model and apply it to a very different type of company should've definitely caught Warren's attention. Around 2017, Warren Buffett even admitted that he made a mistake by missing out on Google and Amazon ( AMZN ), and similar comments were echoed by Berkshire's Vice Chairman, Charlie Munger, in 2019 (more so focused on Google than Amazon). Yet even after admitting that, they still waited until 2025 to buy stock in Google/Alphabet. That seems very slow and sluggish on their part. From the date Warren Buffett first admitted he made a mistake missing out on Google (May 8, 2017) to the date Berkshire finally bought Alphabet stock in Q3 2025, Alphabet returned about 300% to the S&P 500's 200%. The Lesson: Have some appreciation for new technology and its capabilities, even if you don't fully understand them at first glance. Realize that the power of an ecosystem with strong brand loyalty is very mighty, a true moat, and it's not enough of a moat just for your technology to be 'necessary' or hard to switch away from. It's also important to pay attention to fast-changing events and capitalize on them by acting early. And when a company transforms into a conglomerate, study the benefits of why such a structure would be good for that company. And when you admit you made a mistake by missing out, act quickly to correct that mistake rather than waiting. Resistant to innovation and missing out on modern trends Berkshire Hathaway also missed out on some of the other, most revolutionary technology companies that changed our world and reflect new trends, such as NVIDIA ( NVDA ), Facebook/Meta ( META ), Netflix ( NFLX ), and Tesla ( TSLA ). It's as if Berkshire is afraid to go near innovative companies that change the way we do things, challenge tradition, break mainstream norms, and reflect new trends in human behavior. Lesson: Have some appreciation for new and different kinds of innovative, scalable companies that may represent a significant part of a modern, dynamic economy. Don't be afraid to get educated and learn more about a new or strange idea, and keep up with modern trends and changes in daily human lives. Underperforming Blue Chips Warren Buffett's investments (through Berkshire Hathaway) have usually focused around large, mega-cap blue chips that were very mature companies but lacked the growth and momentum necessary to outperform the S&P 500. Wells Fargo ( WFC ) was once Berkshire's #1 holding in its stock portfolio, surpassing Coca-Cola ( KO ) for the spot in Q4 2012. Both Wells Fargo and Coca-Cola significantly underperformed the S&P 500 for many years while being a large part of Berkshire's stock investments. In 2013, Warren Buffett purchased stock in Exxon Mobil ( XOM ), only to sell it in Q4 2014 after a period of underperformance. Warren also invested in Kraft Heinz ( KHC ), which has been underperforming over the past decade. Warren made his first major technology investment in 2011 when he bought IBM, but this was the wrong kind of technology. IBM underperformed because it failed to adapt to the rapid shift in cloud computing, unable to keep up with competitors, leading to a decline in revenues and stalled earnings. Lesson: Avoid companies that fail to change and adapt quickly and have a slowing rate of growth. It's okay to invest in 'mature' companies if they know how to adapt, build strong ecosystems with impressive brand loyalty, and are showing strong revenue growth. It's time to realize we're no longer living in a value-oriented world. Great returns are achieved through growth and technology stocks. Airline Fumble - Twice Warren Buffett decided to invest in the airlines twice. In 1989 and 2016. Neither time went well. After losing so much money on his 1989 investment in USAir, he sold in 1994 and confessed in his shareholder letter that he made a mistake in buying the airlines. You'd think he would not fall for this same trap again, but he did in 2016. His changing view around 2016 was likely a result of the airline industry consolidating, with less competition. This consolidation actually began around 2013 , as CNBC host Jim Cramer famously turned bullish on the airlines for the first time in over a decade due to the unprecedented situation. In 2013, Warren Buffett didn't flinch at first; he still called the airlines a " death trap ." However, in 2016, Warren Buffett changed his views on this and invested in the four major airlines: American Airlines ( AAL ), Delta Air Lines ( DAL ), Southwest Airlines ( LUV ), and United Airlines (UAL). The airline stocks actually performed well in 2013 as Cramer started recommending them in the early innings of the industry transformation...but this momentum didn't last into the following years. In 2020, the airlines crashed during the COVID-19 pandemic. Warren Buffett then sold his stake in the airlines at a huge loss and admitted that the airlines have all the ingredients of a bad business. It wasn't just the legacy airlines that lost tremendous value, but smaller, more disruptive airlines as well, such as Spirit Airlines ( SAVEQ ), JetBlue ( JBLU ), and Alaska Air Group ( ALK ). None of the airlines were spared. Warren Buffett's long-time friend , Microsoft ( MSFT ) Founder and former Chairman, Bill Gates, famously gave a ' Ted Talk ' in 2015, warning that a global pandemic could happen some day. Warren should've understood the risks of that when investing in the airlines. I would think that the "greatest of all time" should've had a better handle on this: being able to learn from past mistakes, not investing in the wrong kind of business, being able to listen to Bill Gates' perspective on this, and being able to better identify the dangers of what might happen in a changing traveling economy. He should've understood that airlines really do make a lousy business because they have high fixed and variable costs and vulnerability to exogenous events. There's also a perception that the airlines have poor service, cramped seating, and inconvenient schedules, which makes it difficult for airlines to raise prices to a level that would be necessary to return to profitability. Warren should've been aware of this. Making the same mistake with the airlines not once, but twice, was certainly not very diligent. Learning and adapting from past mistakes is essential to a solid investing plan and philosophy. The Lesson: Pay attention to how flawed a certain business like the airlines can be, gather a better understanding of the risks of something you invest in, and pay attention to possible catastrophe scenarios (like a pandemic) that could change the fundamentals of a business very quickly. If something goes wrong the first time, don't repeat the same mistakes again. And for heaven's sake, never invest in the airlines, regardless of how few competitors there are in the space. An oligopoly cannot fix a flawed business or a flawed industry. A True and Genuine "GOAT" Wouldn't Have Made These Errors I do not believe Warren Buffett earned his reputation as "the greatest of all time." I know many of you are likely to respond, "He's not perfect." Well, I'm not asking for perfection, but I still think he let us down in ways that were beneath the honor and reputation of the "GOAT" title and unbecoming of that title, given the nature of these mistakes and how these mistakes demonstrated a tendency to think inside a closed box rather than thinking outside the box. I know these aren't the only mistakes he made, and I could probably write a much longer article covering more of them, but I'm not trying to write a laundry list of errors. Rather, I am documenting the mistakes I believe to be the most significant, unreasonable, and perhaps mistakes we can learn valuable lessons from in teachable moments. A True and Genuine "GOAT" Should Help You Do More Than Just Keep Up With the Averages Granted, I appreciate that Warren sometimes gives decent basic advice to average investors, like investing in a Vanguard S&P 500 index fund ( VOO ). (and that actually is good advice)... But the "greatest of all time," if that title is legit, should be able to provide investors with advice that will help them outperform the S&P 500 and beat the averages. We Can Change What It Means to Be the "GOAT" While I am disappointed in the ways Mr. Buffett has let us down, and the investing community's unbelievable willingness to forgive, look past, and continue calling him the "GOAT" after all the fumbles and mistakes he made, I do think we can learn something from Warren Buffett's life and career: that we should not follow his lead and instead be open-minded to innovation, technology, and nontraditional ideas. Think outside the box and imagine new possibilities. I agree with Warren Buffett that VOO should be a part of every diversified portfolio. I also believe Bitcoin should be included in every diversified portfolio; that's something Warren will never advise you to do. But it's time to quit listening to Mr. Buffett and use some more modern and innovative logic in our investing decisions to reflect changing trends today. Summary A sensible investor should never follow any "guru" into any position. Blindly copying or coat-tailing others will make you vulnerable to making errors. Within reason, expand your ability and willingness to take absurd, wild, and ridiculous ideas and memes seriously, and don't laugh them off. Crazy ideas start off as jokes...until they aren't. People laugh at them until they don't. Many investors failed to take Bitcoin seriously. Many pundits failed to take a Trump victory seriously. A 'truth is stranger than fiction' scenario occurred, and now these 'jokes' aren't so funny anymore. Granted, expanding your ability to take wild ideas seriously does come with significant risk; you could lose up to 100% of your investment. I wouldn't advise risking a large portion of your portfolio on something 'silly,' but keep in mind that, if an investment grows 1000x, as Bitcoin did from 2012 to 2017, it would only take about a $1,000 investment to grow into $1 million. So in that context, perhaps it's possible to make an enormous amount of profit while only risking a small portion of your portfolio. Warren Buffett once said , "Never invest in something you don't understand," leading him to miss out on many disruptive, revolutionary, and innovative technology investments. But the lesson here is if you don't understand something, you should make a stronger effort to educate yourself about it and have a broader imagination of what's possible to achieve. Historically, value stocks have outperformed growth stocks by an average of 4.4% annually since 1927. It's easy to say we should follow history, but history reflects a time when technology was a much smaller part of our economy. Today, technology and artificial intelligence are much bigger contributors. It's time to have a growth-oriented and tech-oriented strategy to deliver outperformance. When a business as fundamentally flawed as the airlines may change in a way where it becomes less competitive in nature, don't fall for it. Some flawed industries are destined to remain flawed forever, and an oligopoly or monopoly-type situation can only do so much to change that. If you have developed a successful track record, and you have a large following of fans who trust your words and listen to your wisdom, you don't have to opine on everything. If you are asked about a topic you're unsure about, sometimes staying quiet or neutral, not opining on such a topic, is the best and most appropriate course of action. However, that doesn't mean you shouldn't try to study and learn about the topic to gain a better understanding of it.