‘I made a mistake’: Warren Buffett says he waited too long to buy Alphabet. The $30B investing lesson all investors need

Warren Buffett has built one of the greatest investing track records in history, but even the “Oracle of Omaha” told CNBC (1) that he doesn’t get every decision right.

Speaking about Berkshire Hathaway’s now-more-than-$31 billion stake in Alphabet (NASDAQ:GOOGL), Buffett revealed that he personally initiated the investment — but he also admitted Berkshire should have bought the company responsible for Google sooner.

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“I initiated,” Buffett said when asked whose idea the investment was, adding that although Berkshire CEO Greg Abel approved the purchase, the decision originated with him.

But later in the interview, Buffett admitted, “I made a mistake,” while discussing Google’s evolution and Berkshire’s decision to invest after years of avoiding the stock.

For most investors, however, Buffett’s admission isn’t the most valuable takeaway. His explanation for why he ultimately bought Alphabet may offer a far more useful blueprint for building long-term wealth.

Buffett still follows the same investing playbook

Although Alphabet operates at the center of the artificial intelligence (AI) race, Buffett made clear that Berkshire didn’t suddenly abandon its long-held investing philosophy.

Instead, he said the firm continues searching for businesses capable of generating exceptional returns on capital for years to come.

“The important thing is to buy a good business and to buy it on the right terms, and then get the right person to run it,” he said in the CNBC interview.

Buffett argued that truly great businesses should earn substantially more than virtually risk-free assets, such as U.S. Treasuries. More broadly, McKinsey research (2) holds that companies create value when their returns on invested capital exceed their cost of capital.

“The trick in life is to find … businesses that are going to earn high returns on capital for an extended period of time,” Buffett said. “A long period of time gets to be very important because those doubles later on are very big numbers.”

That focus on compounding has been a hallmark of Buffett’s career. In a letter to shareholders (3), he notes it as one of the key principles of Berkshire’s “capital discipline.” And rather than trying to predict which stock will outperform over the next few months, he prefers companies capable of growing earnings and reinvesting capital over decades.

He also dismissed Wall Street’s tendency to obsess over short-term performance.

“They ask all these questions about what will happen next quarter … it’s just ridiculous,” Buffett told CNBC.

Read More: Millionaires under 43 hold only 25% of their wealth in stocks. Here’s where their money is actually going

You don’t need to find the next Google

One reason Buffett’s comments resonate is that they challenge a common misconception about successful investing.

Many investors spend their time searching for the next breakout stock. Buffett’s approach is often much simpler: Identify durable businesses, buy them at reasonable prices and let time do the heavy lifting.

You don’t need an expert to see why this works. For example, a $10,000 investment compounding at 10% annually would grow to roughly $25,900 after 10 years, $67,300 after 20 years and more than $174,000 after 30 years. All without having to add another dollar.

But even after building a stake worth tens of billions, Buffett noted that Alphabet still isn’t among Berkshire’s very favorite businesses.

“I would say that I don’t like it as well as at least four or five other businesses that we own,” he said.

The honor of Buffett’s “favorite” among his top holdings might instead fall to Coca-Cola (NYSE:KO), American Express (NYSE:AXP) or Apple (NASDAQ:AAPL), per The Globe and Mail (4).

Get some help

For investors trying to build wealth over time, separating meaningful long-term trends from short-term market noise can be difficult. Buffett has spent decades analyzing businesses before putting money to work, but most individual investors don’t have the time or resources to sift through financial statements and earnings reports themselves.

That’s why Moby offers expert research and recommendations to help investors identify strong, long-term opportunities using analysis from former hedge fund professionals.

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Moby’s team spends hundreds of hours analyzing financial news, company filings and market data to deliver stock and crypto reports directly to you. The research is designed to help reduce the guesswork behind choosing stocks and ETFs while keeping investors informed about changing market conditions.

Even beginners can quickly get up to speed with easy-to-understand reports, making it possible to become a smarter investor in just five minutes.

Time is ‘the friend of the great business’

Buffett has long said (5) that time is one of an investor’s greatest advantages.

His comments about Alphabet reinforce that even legendary investors don’t always buy at the perfect moment. What matters is recognizing quality businesses and staying invested long enough to benefit from years of compounding.

For newer investors, consistently putting money to work may ultimately matter more than trying to perfectly time the market or identify the next trillion-dollar company before everyone else.

After all, Buffett’s investing success wasn’t built on perfectly timing every stock purchase — he admits he sometimes waited too long. Instead, it came from consistently putting money to work in quality investments and letting compounding do the heavy lifting.

Start planting the investment seeds

That’s a strategy everyday investors can apply, even without billions of dollars to invest.

With Acorns, you can start automatically investing your spare change every time you make a purchase. Simply link your debit or credit card, and Acorns rounds each purchase up to the nearest dollar, investing the difference into a diversified portfolio of ETFs managed by experts at leading firms such as Vanguard and BlackRock.

For example, if you buy a coffee for $3.25, Acorns rounds the purchase up to $4 and automatically invests the remaining 75 cents. And those small contributions can add up over time, helping you build wealth without needing to think about it every day.

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The plan matters more than the picks

Berkshire Hathaway’s portfolio reflects Buffett’s unique investment goals, risk tolerance and access to opportunities that most individual investors simply don’t have. That’s why it’s often more important to build an investment strategy that fits your own financial situation rather than trying to mirror his holdings.

For investors with portfolios of $250,000 or more, those decisions can become increasingly complex. Managing taxes, planning withdrawals and ensuring your investments remain aligned with your long-term goals often requires more than simply picking the right stocks.

In those cases, working with a financial advisor can help reduce costly mistakes.

If you have an investment portfolio of $250,000 or more, WiserAdvisor can connect you with vetted financial professionals who specialize in retirement and wealth planning.

Simply answer a few questions about your savings, retirement timeline and investment portfolio. WiserAdvisor will then match you — for free — with up to three vetted advisors whose expertise aligns with your financial goals. From there, you can schedule no-obligation consultations to decide which advisor is the best fit.

WiserAdvisor is a matching service and does not provide financial advice directly. All matched advisors are third parties, and specific financial results are not guaranteed.

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Article Sources

We rely only on vetted sources and credible third-party reporting. For details, see ourethics and guidelines.

YouTube (1); McKinsey & Company (2); Berkshire Hathaway (3); The Globe and Mail (4); CNBC (5)

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.