Challenges Faced by Warren Buffett: Obstacles and Turning Points

Life is full of challenges, and Warren Buffett faced many. Discover key struggles and how they were overcome.

Warren Buffett, a highly successful American investor and philanthropist, is renowned as the chairman and former CEO of Berkshire Hathaway. His investment acumen has made him one of the world's most recognized investors. As of January 2026, his estimated net worth of $148.9 billion ranks him among the wealthiest individuals globally.

Sections (7)

Full Timeline Early Life & Education Career & Achievements Success & Recognition Challenges & Struggles Controversies & Scandals Legacy & Impact

1950: Rejected by Harvard Business School

In the spring of 1950, Warren Buffett was rejected by Harvard Business School, which led him to enroll at Columbia Business School.

1966: Closed partnership to new money

In 1966, Warren Buffett closed his partnership to new money, later claiming that the textile business had been his worst trade.

1974: SEC investigation

In 1974, the SEC opened a formal investigation into Warren Buffett and Berkshire's acquisition of Wesco Financial, although no charges were brought.

1977: Purchased the Buffalo Evening News

In 1977, Berkshire Hathaway indirectly purchased the Buffalo Evening News for $32.5 million, leading to antitrust charges.

1977: Separation from Susan Thompson

In 1977, Warren Buffett and his wife Susan began living separately, though they remained married.

1990: Scandal at Salomon Brothers

In 1990, a scandal involving John Gutfreund, the former CEO of Salomon Brothers, came to light when a rogue trader, Paul Mozer, submitted bids exceeding Treasury rules. Gutfreund's delayed response led to his departure.

August 1991: Buffett Becomes Chairman of Salomon Inc.

In August 1991, following the scandal involving the CEO of Salomon Brothers, Warren Buffett stepped in to become the chairman of Salomon Inc. until the crisis was resolved.

1998: Buffett acquires General Re

In 1998, Warren Buffett acquired General Re (Gen Re) as a subsidiary, a deal that faced difficulties due to inadequate underwriting standards and a problematic derivatives book.

March 15, 2005: Greenberg Resigns from AIG

On March 15, 2005, amidst a 2005 investigation into accounting fraud, the AIG board compelled Maurice Greenberg to resign as chairman and CEO after New York regulators alleged questionable transactions and accounting practices.

February 9, 2006: AIG Agrees to Pay Fine

On February 9, 2006, AIG agreed to pay a $1.6 billion fine following investigations into accounting fraud.

2006: Disowning Nicole Buffett

In 2006, Warren Buffett disowned his son Peter's adopted daughter, Nicole, after she participated in a documentary about economic inequality.

2007: Cancellation of Coal-Fired Power Plants

In 2007, Warren Buffett's PacifiCorp, a subsidiary of MidAmerican Energy Company, cancelled six proposed coal-fired power plants, including Utah's Intermountain Power Project Unit 3 and Jim Bridger Unit 5, after pressure from regulators and citizen groups.

2007: Subprime Mortgage Crisis Begins

In 2007, the subprime mortgage crisis began, which was part of the Great Recession, leading to criticism of Warren Buffett for allocating capital too early and making suboptimal deals; this crisis starting in 2007.

2008: Berkshire Hathaway Suffers Earnings Drop

In 2008, during the financial crisis, Warren Buffett's Berkshire Hathaway experienced a 77% drop in earnings during Q3, and many of his later deals incurred significant mark-to-market losses.

March 2009: Buffett Comments on the Economy

In March 2009, Warren Buffett said in a cable television interview that the economy had "fallen off a cliff" and expressed concerns about the potential re-emergence of inflation levels similar to those in the 1970s.

2009: Buffett Divests from ConocoPhillips

In 2009, Warren Buffett divested his failed investment in ConocoPhillips, according to a statement to his Berkshire investors.

2010: Settlement with Gen Re

In 2010, the U.S. government reached a $92 million settlement with Gen Re, a Berkshire Hathaway subsidiary, allowing them to avoid prosecution in the AIG case, contingent upon implementing corporate governance concessions.