Buffett’s Willingness To Be Wrong | The Acquirer's Multiple®

During their recent episode, Taylor, Carlisle, and Adam Mead discussed Buffett’s Willingness To Be Wrong, here’s an excerpt from the episode:

Jake: Anything appreciable on something we’ve talked about before is the idea of statistical time versus behavioral time. So, you can look at things on a chart, and it’s like, “Oh, underperformed for five years.” Well, that seems like it’d be easy to live through. Like, look how it turned out on the other side. But to actually live it behaviorally in real time color is a much different experience, and being able to survive it and keep your head and keep your wits about you. Anything from going through Berkshire’s history that brought that out?

Adam: I guess one thing that came to mind, not so much– Well, I guess it’s this willingness to be wrong or do your own thing. One thing that comes to mind, I think this was in the 1980s. I’m not 100% sure on this. Berkshire bought– It was Washington Public Power Supply. It was bonds. There was I think five different projects, and there was just the nuances of them that Buffett identified two or three of these things. I forget the amount that they put in, but it was a meaningful amount of Berkshires capital, call it 10% of equity capital.

Buffett even said, “We’re doing this, because we think the odds are favorable. We could be wrong, we can embarrass ourselves, but this is where the facts have led us.” And so, I pulled that example out, because they were willing to do what they would do if no one else was watching. I think that’s a very hard thing to do too. So, you’re not only having these times of underperformance, but having everyone watch you and comment on it.

Buffett’s as close to investing sainthood as there is. He’s still reading the newspapers. He’s still wondering what people are saying about him. Maybe he has to. So, I think that just makes it that much more impressive.

Jake: Yeah. And how many times did he have to read how he’s lost it? The games passed him by [Jake [laughs] probably 10 different periods of time now at this point where he’s lost it.

Tobias: He probably gets excited when that happens, because it means that it’s almost over.

Jake: The end is near.

Adam: [laughs]

Tobias: Finally, they’re saying it. Ring the bell.

Adam: Yeah. [laughs]

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