Key facts
- Warren Buffett admitted to shareholders that his capital allocation decisions had failed, giving himself a D grade.
- He warned that the market's excessive optimism would end badly.
- This prediction proved prophetic, preceding the dot-com crash.
Warren Buffett once gave himself a D grade for his capital allocation decisions, a rare admission from the renowned investor. In a communication to shareholders, he acknowledged that his decisions had gone seriously wrong. This confession was accompanied by a prescient warning: the market's rampant optimism would ultimately lead to a negative outcome. This forecast proved accurate, as the dot-com bubble burst within months, validating Buffett's cautionary words.