Warren Buffett Missed The Opportunity To Invest In Amazon Early, Says 'I Blew It' And Was 'Too Dumb' — Now He Refuses To Invest Today Saying, 'I've Probably Got So Many Psychological Problems With The Fact That I Didn't Do It That It's Very Hard t...
Berkshire Hathaway Inc. Chairman and CEO Warren Buffett is no stranger to missed opportunities, but one that particularly stings is his decision not to invest in Amazon.com Inc. during its early days.
"I blew it," Buffett has said about passing on the online retail giant not once but twice.
In 1994, when Amazon was just getting started, Buffett decided against investing in what was then just an online bookstore. The same happened in 1997 when Amazon went public. At that time, even Wall Street was skeptical, doubting that an online initial public offering (IPO) could flourish. For a brief period, the doubters seemed vindicated as the stock dipped below its IPO price in 2001-2002.
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Despite the snubs, Buffett holds Amazon Founder Jeff Bezos in high regard. He met Bezos two decades ago and immediately recognized him as "an extraordinarily clear thinker as well as a brilliant thinker."
Yet, Buffett has expressed that the "miracle" of Amazon's growth deterred him from investing. "If I think something is going to be a miracle, I tend not to bet on it," he said in a 2018 interview with CNBC.
"I'd always admired Jeff," Buffett told Yahoo Finance's Editor-in-Chief Andy Serwer in 2019. "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."
Buffett’s reluctance to invest in Amazon is not rooted in skepticism about the company's potential but in his investment philosophy. At the 2017 Berkshire Hathaway annual shareholders meeting, he said, "I was too dumb to realize what was going to happen."
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Known for his cautious and methodical approach, Buffett has acknowledged his regrets to CNBC about Amazon while admitting that his reservations are deeply psychological.
"I've probably got so many psychological problems with the fact that I didn't do it that it's tough to do it now," he said.
Every Amazon annual report served as a reminder of what could have been, especially because Bezos included his original 1997 shareholder letter in it.
"I knew he would do the most with whatever idea he had. I had no idea it had this potential. I blew it," Buffett said.
Indeed, Buffett may have missed the Amazon boat, but he doesn't consider it an error in his investment approach, just in his execution. It's a miss demonstrating the varied roads one can take in the investment landscape.
Some may opt for proven, steady investments like Buffett, while others might chase the next big innovation, willing to take higher risks for potentially higher rewards. For instance, investing in startups offers the tantalizing prospect of getting in on the ground floor of the next Amazon or Apple Inc. These high-risk, high-reward scenarios can be enticing to those looking for rapid growth, as opposed to the long game that Buffett typically plays.
With investing, hindsight is 20/20, and even seasoned investors like Buffett acknowledge that not all decisions will be home runs. His choice to bypass Amazon serves as an educational tale: Investment opportunities are abundant, but knowing yourself may be the most valuable asset in deciding where to place your bets.
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