Legendary investor and former Berkshire Hathaway (BRK.A) (BRK.B) Warren Buffett once famously described his Dexter Shoe acquisition as a "gruesome mistake," though not necessarily for the reason most investors might assume.
But for modern CEOs, and the investors who watch their maneuvers, the decision now stands as one of the most instructive lessons in corporate finance history. At its core, the Dexter Shoe acquisition illustrates the catastrophic cost of using an appreciating currency—Berkshire Hathaway stock—to purchase a depreciating asset.
