Making Mistakes: Learning from Warren Buffett

As many of you know, my favorite go-to source for great quotes is stock investor guru Warren Buffet. This article contains some statements about Warren Buffet that I believe are worthwhile lessons for all of us.
Warren Buffet recently sold all of his massive holdings in the airline industry as a result of the COVID-19 pandemic, acknowledging that buying the airlines was a mistake. Buffet wasn’t saying he thought the airlines would do poorly, just that it was too unpredictable to make sense for him as a continuing business investment.
In describing Buffet, the article states: “Buffet…makes mistakes frequently. Successful investing is about more than just buying winners. It’s also about having the discipline to sell as information changes and the humility to know when you’ve made a mistake.”
For those of you card-sharks out there, you may also have heard a similar axiom:  “Don’t throw good money after bad.” Although the article on Buffet was about stock investing, I believe there are two critically important lessons for all of us:
1.  Don’t be afraid to change direction.  The one thing in the article I disagree with is Buffet’s (and the author’s) use of the term “mistake.” Changing direction or making a different choice based upon newly acquired information does not mean that the prior decision was a “mistake.”  Hindsight is always 20-20.  I tell all of my LSAT Prep students that if you prepare for and take the LSAT, and ultimately decide that law school is not for you, you did not waste your time. Spending a few months of time to help you decide what you do not want to do with the next 30-40 years (or more) of your life is likely to be an exceptionally wise investment.
As the article on Buffet states, one makes new decisions (whether in investing or in life) “as information changes.”  Don’t get me wrong. I am not an advocate of making undisciplined decisions on important issues that are not well thought out.  But don’t be afraid to make sensible changes when newly acquired information leads you in a different direction.
2.  Don’t be afraid to make mistakes.  The even bigger lesson from the article is not what was said but what was implied. Once you realize that making and correcting “mistakes” is part of life, you become much less afraid to make “mistakes.”  I would encourage you to consider taking the same attitude with your career:
  • Do your best to make sound and prudent decisions based upon what is important to you. 
  • Recognize when newly acquired information indicates you have made a “mistake,” and don’t be afraid to shift gears if your well thought-out instincts tell you as much.
  • And, most importantly, don’t be afraid to make “mistakes” – they usually can be overcome, especially when you’re young.
Be safe, happy and healthy out there. I wish all of you the very best in your lives and careers.

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