Warren Buffett Warns Not to Repeat His Mistakes, ‘We’ve Never Succeeded in Making a Good Deal with a Bad Person’
Warren Buffett, one of the most influential investors in modern history, has consistently emphasized that people matter as much as financials when evaluating business opportunities. Among his many reflections on investing, one of his clearest came from the Oracle of Omaha’s 1989 annual Berkshire Hathaway (BRK.A) (BRK.B) shareholder letter: “We’ve never succeeded in making a good deal with a bad person.”
The statement captures Buffett’s belief that business partnerships must be built on a foundation of trust and character. While financial metrics, industry trends, and economic conditions are essential considerations in any deal, Buffett has repeatedly argued that the quality of the individuals behind a business is equally, if not more, important. His decades of experience at the helm of Berkshire Hathaway, a conglomerate now valued among the world’s largest corporations, give this perspective added weight.
The context for this remark lies in Buffett’s long history of acquiring companies and partnering with managers, including his late business partner, Charlie Munger. Throughout their shared time at the helm of Berkshire, the pair sought to align themselves with leaders who not only demonstrated competence but also embodied honesty and integrity. For Buffett, a “bad person” is not simply someone disliked on a personal level but someone whose values, ethics, or behavior undermine trust. In his view, no matter how attractive the numbers might look, a deal rooted in such a relationship is destined to disappoint.
Buffett’s track record illustrates this philosophy. Some of Berkshire Hathaway’s most successful acquisitions — such as See’s Candies, Nebraska Furniture Mart, and GEICO — were not just businesses with strong fundamentals. They were also led by managers he respected deeply for their integrity and long-term orientation. This alignment of values, Buffett has often noted, allows Berkshire to maintain decentralized operations, giving local managers autonomy while trusting that they will act in the best interests of the business and its shareholders.
The principle resonates well beyond Buffett’s personal experience. In broader markets, investors frequently encounter scenarios where short-term opportunities are presented by individuals or organizations with questionable practices. While such deals may promise high returns, they often come with hidden risks — legal, reputational, or ethical — that can erode or even erase potential gains. Buffett’s observation serves as a cautionary reminder: the character of those involved can influence outcomes just as much as the business model itself.
In today’s financial landscape, marked by rapid technological change, speculative ventures, and growing emphasis on corporate governance, Buffett’s words remain highly relevant. With increasing scrutiny on transparency, the importance of trustworthy leadership has only grown. Markets may reward innovation and bold strategies, but they also penalize mismanagement and ethical lapses harshly, as seen in many high-profile corporate failures over the years.
Buffett’s authority on the subject is difficult to overstate. His career has spanned more than six decades, and his ability to combine sharp financial analysis with deeply human judgment has set him apart. The enduring lesson from his statement is that business success is not just about spotting opportunities — it is about choosing the right people to pursue them with.
For Buffett, the formula is simple but uncompromising: strong businesses require strong characters. A good deal can never come from a bad partner.
On the date of publication, Caleb Naysmith did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com