Buffet discusses his biggest mistake-buying Berkshire Hathaway

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Now, that sounds like a great little morality table — tale at this point. But the truth is I had now committed a major amount of money to a terrible business. And Berkshire Hathaway became the base for everything pretty much that I’ve done since.

So in 1967, when a good insurance company came along, I bought it for Berkshire Hathaway. I really should — should have bought it for a new entity.

Because Berkshire Hathaway was carrying this anchor, all these textile assets. So initially, it was all textile assets that weren’t any good. And then, gradually, we built more things on to it. But always, we were carrying this anchor.

And for 20 years, I fought the textile business before I gave up. As instead of putting that money into the textile business originally, we just started out with the insurance company, Berkshire would be worth twice as much as it is now. So —

BECKY QUICK: Twice as much?

WARREN BUFFETT: Yeah. This is $200 billion. You can — you can figure that — comes about. Because the genius here thought he could run a textile business. (LAUGHTER)

BECKY QUICK: Why $200 billion?

WARREN BUFFETT: Well, because if you look at taking that same money that I put into the textile business and just putting it into the insurance business, and starting from there, we would have had a company that — because all of this money was a drag. I mean, we had to — a net worth of $20 million. And Berkshire Hathaway was earning nothing, year after year after year after year.

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