Lessons from Warren Buffett: Missing Amazon and Microsoft

In this interview with Andy Serwer, Warren Buffett reflects on his admiration for Jeff Bezos and his remarkable execution of Amazon’s vision, acknowledging that he didn’t foresee its success.

He admits to missing investment opportunities like Microsoft but doesn’t regret them as they were outside his circle of competence. Instead, he regrets missing opportunities within his expertise, considering them his biggest mistakes.

Buffett emphasizes that only a small percentage of companies, around 5-10%, fall within his circle of competence, where he feels confident in his understanding. He focuses on evaluating businesses he comprehends rather than worrying about those beyond his expertise.

Here’s an excerpt from the interview:

Buffett: I always admired Jeff [Bezos]. I met him 20 years ago or so, and I thought he was something special. But I didn’t realize you could go from books to what’s happened there. He had a vision and executed it in an incredible way—something that would not have—

But there’s a lot of games I’ve missed. I would’ve missed Microsoft, even if I’d gotten to know Bill earlier or something. Those just aren’t my games. I don’t worry about the things that I miss that are outside my circle of competence of evaluating.

I have missed things that were within my circle, and that’s a terrible mistake. Those are my biggest mistakes.

You haven’t seen them. It’s not a mistake because I missed Netscape or something like that at all. I would say that maybe 5% of the companies or 10% of the companies, at most, are within an area of my circle of competence—there’s something I should be able to understand.

You can watch the entire discussion here: