There are all kinds of businesses that Charlie and I don't understand, but that doesn't cause us to stay up at night. It just means we go on to the next one, and that's what the individual investor should do.
Interpretation
Not all businesses are understandable, but investors should remain unfazed and continue exploring new opportunities.
Warren Buffett emphasizes that it is normal for investors to encounter businesses they do not comprehend. Instead of letting this uncertainty lead to anxiety, the prudent approach is to move on and seek out other investment opportunities, encouraging a mindset of resilience and adaptability in the face of complexity in the business world.
In practice
During a financial seminar, to stress the importance of moving on from unfamiliar ventures.
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.
One’s objective should be to get it right, get it quick, get it out and get it over. Your problem won’t improve with age.
Just because you buy a stock and it goes up does not mean you are right. Just because you buy a stock and it goes down does not mean you are wrong.
Most investors would be better off in an index fund.
You shouldn't just pick a stock - you should do your homework.
Value investing is risk aversion.
Time is on your side when you own shares of superior companies.
To be an investor you must be a believer in a better tomorrow.
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