Warren Buffett Said This Investing Decision Led to the Worst Year in His Career
Written by
John Csiszar
Edited by
Zuri Anderson
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Warren Buffett earned his reputation as the “Oracle of Omaha” by being one of the most successful investors in history.
According to Bloomberg, over the six decades that Buffett led Berkshire Hathaway, the stock more than doubled the average annual return of the S&P 500, an incredible statistic. Buffett built his reputation on sticking to disciplined value investing and avoiding speculative trends, and at times that stand has proven controversial.
Here’s one decision that Buffett said led to the worst year in his career — although, in true Buffett fashion, it’s not one that ended up hurting him financially.
The Decision: Refusing To Buy Internet Stocks During the Dot-Com Bubble
In the late 1990s, technology stocks were exploding. Internet companies with little revenue were soaring in price, and investors rushed to buy anything tied to the web. Many portfolio managers abandoned traditional valuation metrics and chased momentum instead. As a result, the Nasdaq Composite index soared by nearly 600% from 1995 to 2000, according to SoFi.
Buffett, per his traditional, value-based approach, refused to participate in the hot-stock rally.
According to an NPR interview with Buffett’s biographer Alice Schroeder, at the time, Buffett openly admitted that he didn’t understand internet businesses well enough to evaluate them properly. He had only recently begun using a computer and continued to spend most evenings reading printed financial reports, playing bridge and running his businesses the old-fashioned way.
Rumors even circulated online that Buffett was ill and hospitalized, forcing Berkshire to publicly deny them. According to Schroeder, many people were actively trying to knock Buffett off his pedestal during that period. As tech stocks were booming and posting stratospheric returns, Buffett was seen as out-of-touch and behind the times. Buffett later told her that the experience of being told he was wrong and obsolete was the worst of his career.
Putting His Reputation on the Line
Facing major criticism — and even ridicule — for perhaps the only time in his professional career, Buffett could have remained silent and taken his lumps, perhaps even acquiescing and admitting he was “wrong.” But Buffett is nothing if not a man of conviction about his approach.
Rather than quietly riding out the criticism, Buffett made a bold move in 1999. He attended a high-profile conference of technology executives in Sun Valley that included leaders from companies such as Amazon, Apple, Intel and Yahoo.
Buffett addressed the crowd directly and warned that while the internet was useful, the valuations of internet companies were wildly inflated and unsustainable. Schroeder recalled that executives laughed at him and openly dismissed his caution. She noted that this was one of the first times in Buffett’s adult life that he knowingly put his reputation at risk by publicly challenging market enthusiasm.
At the time, Buffett looked badly outmatched. Tech stocks continued climbing for months, reinforcing the narrative that he had missed the future of investing. At the time, there was little to suggest that the market narrative was wrong.
Then, the bubble burst.
How Buffett Was Ultimately Proven Right
In 2000 and 2001, Buffett was proven right once again when the dot-com bubble collapsed. Many internet stocks lost most or all of their value. The NASDAQ Composite fell roughly 77% from its peak over the following two years, wiping out trillions of dollars in paper wealth, per NPR.
Berkshire Hathaway, however, avoided much of that damage. While the broader tech-heavy market collapsed, Berkshire gained roughly 30% in the year 2000, benefiting from its focus on profitable, cash-generating businesses rather than speculative growth companies.
In hindsight, Buffett’s restraint protected shareholder capital and validated his long-standing philosophy of staying within his circle of competence and refusing to chase hype.
Still, the emotional toll of being publicly dismissed, mocked and doubted remained one of the most difficult periods of his career.
Why Buffett Still Calls It His Worst Year
Buffett has never defined success solely by short-term returns. He often measures his career by discipline, reputation and long-term judgment rather than quarterly performance.
During the dot-com bubble, he endured sustained criticism from media, investors and peers who believed he had lost relevance. For someone whose credibility rests on rational decision-making, being portrayed as outdated and wrong was deeply uncomfortable.
That pressure, rather than any financial loss, is what Buffett described as the worst experience of his investing life.
A Reminder That Discipline Beats Popularity
Buffett’s refusal to chase internet stocks briefly made him look out of touch, but history ultimately vindicated his caution. The episode reinforces why long-term investing success depends less on following trends and more on consistent judgment, patience and risk control. Even the world’s greatest investor endured a year when nearly everyone thought he was wrong — and still came out ahead by staying true to his principles.
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