Warren Buffett Is Human

What I mean is that investing guru Warren Buffett makes mistakes like anyone else.

Joe Mont writes, (bold emphasis mine)

In a recent annual letter to Berkshire Hathaway (BRK-A) shareholders, an eagerly awaited piece of investing insight, Buffett cops to several mistakes. Among them: authorizing the purchase of a large amount of ConocoPhillips stock when oil and gas prices were near their peak. A dramatic fall in energy prices soon followed.

"The terrible timing of my purchase has cost Berkshire several billion dollars," Buffett wrote, segueing into regret over a $244 million parlay in two Irish banks "that appeared cheap" but soon incurred an 89% loss on the initial investment.

"The tennis crowd would call my mistakes 'unforced errors,'" Buffett said.

When a Buffett, Bill Gross or Larry Fink publicly discusses bad decisions, it makes headlines. But there is hardly an investor, pro or amateur, who doesn't have some woeful tale of a sure thing that wasn't or can't-miss advice that did. The key is learning from mistakes and moving on.

The main difference between the pros and the tyros is the ability to accept the emotional and self-esteem angst of making wrong decisions and consequently adapting remedial measures. Yet for many, investing is like a one way street: cash in on profits (or brag about success) and long the losses (or deny the errors).

Another aspect here, aside from human frailty issue, could be one of “karma”.

I have pointed out that Warren Buffett seems to have been transformed from a value investor to a political entrepreneur or an agent who directly profits from government actions/concessions (such as bailouts). Apparently this time investing on such special political conditions engineered by the government (Irish banks) didn’t work.

Since bailouts signify redistribution of resources to political benefactors at the cost of taxpayers, then Mr. Buffett’s loss could be construed in the light of poetic justice.