Walmart (Wal-Mart)

📝 Overview

Walmart is a massive global retailer that Warren Buffett famously cites as one of his greatest "mistakes of omission." While Berkshire has held positions in the company at various times, Buffett's primary commentary focuses on the cost of not buying the stock when its competitive advantage was already clear.

⚠️ The "$10 Billion Mistake" (2004)

In the 2004 Meeting, Buffett admitted that he made a "mistake of omission" that cost Berkshire shareholders approximately $10 billion.

• The Opportunity: Buffett began buying Walmart stock in the late 1990s/early 2000s. He had intended to buy 100 million shares at around $23 per share.
• The Error: After Berkshire purchased a small initial position, the stock price rose by "about an eighth" (a few cents). Buffett, being price-sensitive, stopped buying, waiting for the price to drop back to his entry point.
• The Result: The stock never dropped back. It continued to climb as Walmart's dominance in the retail sector widened. By 2004, Buffett estimated that failing to complete that buy order had cost Berkshire roughly $10 billion in potential gains.
• Lesson: Buffett uses this as a prime example of the danger of "thumb-sucking" and being too focused on minor price fluctuations when the long-term economics of a "moat" are obvious. He notes that for a company like Walmart, the "moat" was its relentless focus on low costs and efficient distribution, which was already highly visible to anyone who bothered to look.

🔗 Connections

• Source: 2004 Letter, 2004 Meeting
• Concept: Mistakes of Omission, Moat
• Related: Target (occasionally mentioned as a competitor)

• References: 2004 Meeting
• Index: index