He admitted to many mistakes in his letters (e.g., Dexter Shoes). What was the most important lesson he learned from his biggest mistake?

The Most Important Lesson Buffett Learned from His Biggest Mistake

In his annual letters to shareholders, Buffett candidly acknowledged numerous investment errors, with the acquisition of Dexter Shoes standing out as his most costly mistake (due to the use of Berkshire Hathaway stock for payment, resulting in tens of billions in opportunity cost losses). From this gravest error, he learned a crucial lesson: When investing or acquiring, opportunity costs must be thoroughly considered, especially when using shares of a high-growth-potential company as currency, as future stock appreciation can magnify losses from poor decisions. Simultaneously, this reinforced his longstanding investment principle: prioritize quality businesses with enduring competitive advantages ("economic moats") and avoid mediocre or commoditized operations vulnerable to external disruption. Buffett emphasized that promptly acknowledging and learning from mistakes helps investors prevent greater losses and transforms errors into future wisdom.