Remember that the stock market is manic-depressive.
Interpretation
The stock market experiences extreme fluctuations, reflecting emotional highs and lows of investors.
Warren Buffett's quote highlights the volatile nature of the stock market, comparing it to a manic-depressive state. It suggests that the market often reacts irrationally to news and events, leading to significant highs and lows in stock prices, which can be driven more by investor sentiment than by the fundamental value of companies.
In practice
In a speech about investment strategies, one might say, 'Remember that the stock market is manic-depressive, and it's crucial to stay grounded during fluctuations.'
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.
Outperforming the market with low volatility on a consistent basis is an impossibility. I outperformed the market for 30-odd years, but not with low volatility.
If you wait to see how much money you have left at the end of the month to put toward savings, the answer may be zero. So, set up an automated monthly transfer from your checking to savings account. Once you lock into that commitment, you'll be forced to scale back spending to make ends meet.
After costs, only the top 3% of managers produce a return that indicates they have sufficient skill to just cover their costs, which means that going forward, and despite extraordinary past returns, even the top performers are expected to be only as good as a low-cost passive index fund. The other 97% can be expected to do worse.
Never, ever invest money that you will need prior to three to five years - minimum.
It isn't as important to buy as cheap as possible as it is to buy at the right time.
If you owe the bank $100 that's your problem. If you owe the bank $100 million, that's the bank's problem.
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