Warren Buffet is one of the wealthiest and wisest investors in the world.
And over the years, his wisdom has helped me through some tough times in the market. Given the news from last week, maybe his wisdom can help you, too…
As you’re probably aware, global markets are still reeling from the UK’s decision to leave the European Union.
In just the last week, the S&P has dropped by more than 5%—and rebounded by nearly 4%. A roller coaster like that is enough to make anyone sick.
But I’m not stressed about it…
I imagine Buffett isn’t stressed about it…
And you shouldn’t be stressed about it, either.
Here are some words of wisdom from Buffett that help me—and could help you—keep a cool head.
The Best Trading Decision...
When the market tanks like it did last Thursday, it might be tempting to sell your positions and hide your head in the sand.
Conversely, when the market is trading up (like it has been the past few days), you might feel compelled to load up on stocks again.
But often, the best trading decision is no decision at all. There’s no reason to change your strategy just because the market gets choppy.
Instead, wait for a real investment opportunity—for example, a blue chip stock that’s become undervalued, or an emerging technology company that you believe in.
Like Buffett said, “You do things when the opportunities come along. I’ve had periods in my life when I’ve had a bundle of ideas come along, and I’ve had long dry spells. If I get an idea next week, I’ll do something. If not, I won’t do a damn thing.”
So ignore the ups and downs of the market…
Instead, be patient and wait for the right opportunities.
Investing for the Long-Term
Another piece of wisdom from Buffett is this:
“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”
This is a principle I practice with my public and private market investments—but it’s especially true with private market investments.
When you invest in an early-stage private company, you’re getting in at the ground floor. It takes time for these young companies to develop and grow.
Sure, some start-ups might quickly get acquired or go public (like Elio motors did recently, handing some of our subscribers 300%+ gains in just 30 days)...
But often, just by the nature of a start-up being at the ground floor, it will take time for it to blossom into a successful investment.
Surround Yourself With The Right People
At a dinner party a few weeks ago, I was struck by something a guest said to me:
“You are the average of the five people you spend the most time with.”
It reminded me of a quote from Buffett: “It’s better to hang out with people better than you. Pick out associates whose behavior is better than yours and you’ll drift in that direction.”
Matt and I have always taken this quote to heart:
In fact, over the years, we’ve made it a point to build close professional and personal relationships with expert private market investors. Not only do they give us access to high-quality deals and teach us about private investing...
But they also help us keep a cool head when markets get rough.
We rely on this network—and on clever Warren Buffett quotes—to get us through tumultuous times like these.
I hope you’ll start to look at Matt and I as part of your network... and I hope we can bring some calm and success to your investing world.
Happy investing.
Best Regards,
Founder
Crowdability.com
