A:

According to Warren Buffett, the worst investment of his career was his purchase of Berkshire Hathaway.

Buffett first got involved with Berkshire Hathaway stock when he noticed a trading pattern in the stock that offered the opportunity for small regular profits. Buffett correctly detected the fact that whenever Berkshire sold off one of its mills, it would use some of the proceeds to buy shares of its stock. The buying on the part of Berkshire was heavy enough to pressure the stock price to rise at least temporarily. Buffett devised a plan accordingly. When Berkshire sold a mill, Buffett would buy Berkshire stock and then sell it for a small profit when Berkshire's own buying would temporarily push its stock price higher.

On one of these occasions, Berkshire Hathaway made a tender offer to Buffet to buy some of the stock he was holding. However, when Buffett received the offer, it was one-eighth of a point lower than what he understood to be the agreed-upon price. Buffett had the rather thin-skinned response of being insulted by the offer. He decided to buy the company solely for the purpose of having the pleasure of firing the company executive who had sent the share buyback offer. That, rather than any insightful evaluation of Berkshire as a good investment, is what led Warren Buffett to buy controlling interest in the company that's synonymous with his name.

Buffett later estimated that wasting his time purchasing Berkshire rather than using the time to invest directly in insurance companies cost him close to $200 billion in lost opportunities. Still, both he and Berkshire Hathaway seem to have done all right in the end.

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