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.
Increasingly, staying in the middle class - let alone aspiring to become middle class - is becoming a game of chance.
The Crawfords played everywhere, in every ballpark. And we won, won like we invented the game.
One reason people who spend a lot of time thinking about and working on a problem or a craft seem to find breakthroughs more often than everyone else is that they've failed more often than everyone else.
I've argued this with a lot of people in my life. When people say God blessed me with a beautiful jump shot, it really pisses me off. I tell those people, 'Don't undermine the work I've put in every day.' Not some days. Every day. Ask anyone who has been on a team with me who shoots the most. Go back to Seattle and Milwaukee and ask them. The answer is me -- not because it's a competition, but because that's how I prepare.
To succeed you have to believe in something with such a passion that it becomes a reality.
I have always believed that the only way to cope with a cash crisis is not to contract but to try to expand out of it.
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