The stock market is a wonderfully efficient mechanism for transferring wealth from the impatient to the patient.
Interpretation
The stock market rewards those who are patient while penalizing those who act hastily.
Warren Buffett's quote highlights the principle that investing in the stock market requires patience and long-term thinking. It suggests that individuals who rush into buying and selling based on short-term fluctuations are likely to lose their money, while those who take a more measured and patient approach stand to benefit from the movement of wealth in the market.
In practice
During a financial seminar, to emphasize the importance of long-term investments.
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.
Assets put money in your pocket, whether you work or not, and liabilities take money from your pocket.
When you sell options, you get paid for assuming risk. That can be a profitable business, but it does not mix well with the risks inherent in a leveraged portfolio.
Average investors can become experts in their own field and can pick winning stocks as effectively as Wall Street professionals by doing just a little research.
In January we start saving money, getting out of credit card debt, funding our retirement accounts, and we're doing wonderful. Then, every single year like clockwork, starting in November, all of you fall into this trap that says, 'I have to buy this gift... I can't show up at this party and not have something for everybody.
If nobody can sell mortgage-backed securities based on trillions of dollars of unpayable instruments, there's a lot less risk in the overall system.
Banks are run by executives, and executives protect themselves, and that does not always mean that banks are going to behave rationally.
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