Warren Buffett held his annual ‘Woodstock for Capitalism’ over the weekend – otherwise known as the Berkshire Hathaway AGM. During it he said that not buying Google is one of his biggest investment regrets. Especially since he saw how many advertising dollars his insurance subsidiary was spending with Google at a relatively early stage of its development.
At least I’ve got one thing in common with Mr Buffett then; I’ve missed Google as well!
On a serious note, I think there are two lessons to take from this admission of fallibility from the ‘Sage of Omaha’. The first is to be aware that your investment prejudices could be unnecessarily costly. They can get in the way of clear thinking.
Media not Tech
Buffett is notoriously averse to investing in tech stocks on the basis that he simply doesn’t understand them. Which is a very sensible stance to adopt. However Google is more akin to an advertising platform with near-monopoly characteristics. Which is exactly what local newspapers used to be in pre-internet days – a sector which Buffett has invested in extensively. By labelling Google as ‘tech’, rather than realising it was really a media company, meant a prejudice got in the way of making the right decision.
The second lesson is to realise that despite recording a big miss like Google, Mr Buffett has done pretty well – being worth around $75 billion. We all have our own stocks that got away – the big winners we turned down for some reason. Or those that we owned and sold way too early, like my own sorry ASOS tale. Yet there are plenty of other great ideas out there to make up for them. And when we miss a Google, we just need to crack on and look for the next one.