Warren Buffett, the legendary investor and most experienced person in stocks, was asked the question of whether he was bullish or bearish in one of his annual meetings.
The ‘Oracle of Omaha’ answered in a subtle tone by saying that he and Charlie Munger don’t have opinions on the market, for it won’t do any good and might just intervene with their opinions that are actually good.
He added that if they’re into a business, it would be foolish of them not to act on it based on their thoughts on what the market was going to do…because they really just don’t know. Giving up something that they know is profitable over that of what they don’t know and won’t know because of their opinion just doesn’t make sense to them.
To discover where he got this ideology from, keep on reading!
When the world goes dark, your decision is your guiding light
Buffet, in the annual meeting of Berkshire Hathaway in 1994, shared that he bought his first stock in April 1942, during World War II. He bought three shares, and a lot of things happened after that—from atomic weapons, inflation, presidents resigning, and more. Mind you, he was merely 11 years old at the time!
One lesson we can learn from this is to not give up on doing something just because of other factors that are unclear and are subject to “might happen”. While these statements were made by Warren over two decades ago, they still stand true to this day amid volatile stock market and political instability.
A little advice to lift your morale
Warren advised everyone to make a long term bet on the American economy and don’t ever think about being bullish and bearish when the market fluctuates. Cut out the noise, shut down the curtains from the market side, and look for trustworthy companies that are selling their business at low prices.
Warren’s advice is to buy shares with steadiness and over time, without taking in the factor of the macroeconomic environment as market fluctuations will always be there. Never try to time your purchase with when the market is good for business. Warren Buffett, who is now 88 years old, has always been making a bet on the US economy this whole time.
Fast and steady!
Meanwhile, if you’re a professional investor yet, Warren Buffett still promotes acquiring an index fund in the same fashion, never putting a timeline on your purchases.
With his greater insight, steady stock, and company purchases, Berkshire Hathaway is returning 20% income annually over the past 40 years. According to Factset, these numbers are even double the return of the S&P 500 over that same time period. Just take into account the savings and profit he might be getting through that annual return!