Contest That

If you do financial investment then you will makes mistakes from time to time no matter how well you are at this. Considered widely as one of the top successful investors is Warren Buffet. Even he will admit to making mistakes. He sends letters yearly to his shareholders at Berkshire Hathaway to tell them about the mistakes he has made in investing. Three of the his big mistakes are here.

In the year of 2008 Warren Buffet purchased a long stake of Conoco Phillips in stock thinking that the price for energy would rise in the future. This was a bad investment that turned out to be a for Berkshire a multibillion-dollar loss because he bought the stock at a price that was to high. “When investing, pessimism is your friend, euphoria the enemy.” said Buffet. In the year 1989, Buffet purchased U.S. Air preferred stock. The investment went bad fast because U.S. Air could not pay the dividends on the stock because they did not get enough revenue.

He was lucky that he he was able to sell off his shares for a profit. He realized he got the return because of lady luck. Sometimes a business needs a capitol investment that is large for it to be able to grow despite how good the revenue growth looks. “Investors have poured money into a bottomless pit, attracted by growth when they should have been repelled by it,” Buffet states. Successful business and revenue growth do not mean the same thing.