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More wise words from the Sage of Omaha

A couple of months back I wrote a blog piece para-phrasing Warren Buffet’s sanguine investment instructions to his wife, laid out in his Will, to go cheap and passive in his absence, which he shared with investors in this year’s Berkshire Hathoway annual report.

Continuing with this theme, and in light of the current market turmoil, I thought it would be interesting to quote from an earlier Berkshire annual report, dating to exactly a decade ago: “Investors should remember that excitement and expenses are their enemies. And if they insist on trying to time their participation in equities, they should try to be fearful when others are greedy, and greedy only when others are fearful.”

The point here is that if we are sitting on cash balances, and looking to enter the market, is it not a great thing that markets have fallen? As we are able to buy more of the market for the same cash outlay compared to a week or a month earlier, regardless of where markets may or may not go from here. And by the same token, surely it is only the foolish who run for the exits during a sell-off, and inevitably miss the rally that follows the decline?


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