Even some of the world’s best investors can get pretty down when they realize they missed an investment opportunity that had been staring them in the face.
At a Berkshire Hathaway annual meeting several years ago, Warren Buffett and his longtime business partner Charlie Munger did something rare for investors of their stature: they publicly admitted to a major investment mistake. In a candid exchange, the two legendary investors discussed their failure to invest in Google despite having direct evidence of the company’s extraordinary business model through their own insurance subsidiary, GEICO. Their admission offers a striking window into how even the most sophisticated investors can overlook opportunities hiding in plain sight.
Munger opened the discussion by drawing a distinction between the tech giants they’d missed. “I don’t mind not having caught Amazon early,” he said. “The guy is kind of a miracle worker. It’s very peculiar. I give myself a pass on that, but I feel like a horse’s ass for not identifying Google better. I think Warren feels the same way.”
Buffett confirmed with a simple “Yeah,” before Munger delivered the blunt assessment: “We screwed up.”
“He’s saying we blew it,” Buffett acknowledged. “And we did have some insights into that because we were using them at GEICO and we were seeing the results produced, and we saw that we were paying $10 a click or whatever it might have been for something that at a marginal cost to them was exactly zero. And we saw it was working for us.”
Munger reinforced the point about their access to firsthand data: “So you could see in our own operations how well that Google advertising was working. And we just sat there sucking our thumbs. So we’re ashamed. We atone. We’re trying to atone. Maybe Apple was atonement.”
The exchange reveals something significant about investment psychology and the challenge of recognizing transformative businesses. Buffett and Munger had direct operational evidence of Google’s powerful economics—GEICO was paying for clicks that cost Google essentially nothing to provide, and those clicks were generating profitable customer acquisitions. Yet they failed to translate that operational insight into an investment thesis. Their later massive investment in Apple, which became Berkshire Hathaway’s largest holding and generated returns exceeding $100 billion, suggests they learned from the Google miss. Interestingly, Berkshire ended up buying Google in late 2025 after its resurgence in the AI race. The admission underscores a broader truth in investing: sometimes the best opportunities aren’t hidden in complex financial statements or obscure markets, but are working effectively in your own business operations, waiting to be recognized.