An investor needs to do very few things right as long as he or she avoids big mistakes.
Interpretation
Successful investing relies more on avoiding major errors than on making perfect choices.
Warren Buffett's quote emphasizes the importance of risk management in investing. It suggests that rather than striving for perfection in every investment decision, an investor should focus on steering clear of significant mistakes, which can be detrimental to their financial health. By minimizing the chances of making serious errors, investors can achieve long-term success even with limited correct decisions.
In practice
During a financial seminar on investment strategies, one might say this quote to highlight the importance of risk management.
I have no views as to where it will be, but the one thing I can tell you is it won't do anything between now and then except look at you. Whereas, you know, Coca-Cola (KO) will be making money, and I think Wells Fargo (WFC) will be making a lot of money and there will be a lot - and it's a lot - it's a lot better to have a goose that keeps laying eggs than a goose that just sits there and eats insurance and storage and a few things like that.
If the world couldn't see your results, would you rather be thought of as the world's greatest investor but in reality have the world's worst record? Or be thought of as the world's worst investor when you were actually the best?
Cash never makes us happy, but it's better to have the money burning a hole in Berkshire's pocket than resting comfortably in someone else's.
I think you should read everything you can. In my case, by the age of 10, I'd read every book in the Omaha public library about investing, some twice. _x000D_ You need to fill your mind with various competing thoughts and decide which make sense.
The most common cause of low prices is pessimism - some times pervasive, some times specific to a company or industry. We want to do business in such an environment, not because we like pessimism but because we like the prices it produces. It's optimism that is the enemy of the rational buyer.
Oneβs objective should be to get it right, get it quick, get it out and get it over. Your problem wonβt improve with age.
I often say to the athletes, that I know about their 'neon skills' - the ones that light up and make them easily recognizable. The power of a fighter, the finesse, the agility, the legs, the quickness. But what about being steady, or being dependable? These are more important traits.
We're running the company to serve more people.
Men never plan to be failures; they simply fail to plan to be successful
To some people, I am kind of a Merlin who takes lots of crazy chances, but rarely makes mistakes. I've made some bad ones, but fortunately, the successes have come along fast enough to cover up the mistakes. When you go to bat as many times as I do, and continually improve upon your mistakes, you're bound to get a good average.
I believe the very best money is made at the market turns. Everyone says you get killed trying to pick tops and bottoms and you make all your money by playing the trend in the middle. Well for twelve years I have been missing the meat in the middle but I have made a lot of money at tops and bottoms.
I think when I was younger, I wanted to be a star, until I became a star, and then it's a lot of work. It's work to be a star. I don't enjoy the stardom part. I only enjoy the creative process.
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