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What You Can Learn from Buffett and Others' Mistakes

Everybody makes mistakes.

Warren Buffett speaks to CNBC's Becky Quick on June 2, 2010.
CNBC
Warren Buffett speaks to CNBC's Becky Quick on June 2, 2010.

We know it's true. But sometimes, in the world of investing, it's easy to forget. Take a look at the legends of the industry: Self-made billionaires who have been right about which stocks and assets to bet on for decades, and who have the wallets to prove it.

Try matching your own investing prowess against someone like, oh say, Warren Buffett, a.k.a. the Oracle of Omaha. The per-share book value of his Berkshire Hathaway has risen a compounded annual 20.3 percent since it began back in 1965. Overall, that's a gain of 434,057 percent from 1964 to 2009. Comparatively, my investments over the last decade have, well, nevermind. You get the picture.

Matching your record up against the greats can make you feel like the market is no place for amateurs, or for those who have a day job that isn't in the markets. That's why it's important to remember that no one's perfect, not even the giants in the industry.

They, too, have made mistakes from time to time. But the big difference between them and us (besides a billion dollars here or there) is that they have learned from their mistakes. And they are better investors for it.

Buffett admits he's not perfect. Of his worst trade ever, Buffett says, "Berkshire would be worth twice as much as it is now," if he hadn't made that particular investment.

Of course, Buffett is not alone. PIMCO's Bill Gross remembers his worst investing decision, saying, "The loan was made ... and six months later the company was bankrupt."

We set out to talk to the greatest investors of all timeā€”to find out what they've learned with their biggest mistakes, and why they do things differently now. Hopefully, these lessons will help you in your investing forays. And you might just learn a thing or two about life as well.

So tune in Monday, October 18. We'll have the lessons of five legendary investors, starting on Squawk Box from 6-9am Eastern, and continuing on Power Lunch from 1-2 pm Eastern. Learn from Buffett and Gross, along with BlackRock's Larry Fink, BP Capital Management's Boone Pickens, and Blackstone's Stephen Schwarzman, who looks back on his worst trade ever by admitting, "We actually lost 100 percent of our money."

And, in talking to the greatest traders of all time, another truism is illustrated: The world is a very, very small place. Bill Gross's worst trade ever involves Warren Buffett, and Larry Fink's worst trade involves Steve Schwarzman. It's a reminder to be careful who you step on while you're on the way up