BLOOPER REEL- Warren Buffett is considered by many to be the wisest investor in the world. However, even he is not immune to making mistakes. A great example was his acquisition of stock in US Airways in 1989. Warren Buffett usually gives airlines a wide berth when it comes to investments, but he decided to buy a significant portion of stock in US Airways at a 9.25% dividend yield. This sounded great... right up until the point that rival airline Southwest managed to reduce their operational costs significantly. Whereas US Airways seats cost the company 12 cents per mile, Southwest managed to lower theirs to 8 cents per mile. There was simply no way for US Airways to compete. The amount of time, effort and stress this all cost him was substantial. However, through a combination of experience and patience, Buffett still managed to make a profit on the investment. Even the best of us makes mistakes, but this case is a clear demonstration of how to stay cool, keep your emotions in check and make the best of a bad situation!
Posted on: Wed, 09 Apr 2014 05:28:48 +0000