29 June 2022

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Warren Buffett's 10 Famous Thoughts

Author: Luigi Campopiano

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1. "It is only when the tide rises that you discover who swam naked." Investors or companies that take excessive risks during bull markets or economic expansions are not truly exposed until the recession arrives and at which point it is too late to intervene;

2. "We simply try to be afraid when others are greedy and to be greedy only when others are afraid." This is the "buy low, sell high" philosophy;

3. "Predicting rain doesn't count, building the ark does". Being foresighted makes no sense if you don't act accordingly;

4. "Someone is sitting in the shade today because someone planted a tree a long time ago." Big investments take time. Plan long-term and be patient. Putting the work now will ultimately pay off along the way;

5. "Never invest in a business you can't understand." If you don't understand the business they're investing in, you're essentially throwing darts blindly;

6. "It is much better to buy a wonderful company at a fair price than a fair company at an exceptional price". The long-term value is not determined by your entry point, because in the long run the winners will win;

7. "Our favorite detention period is forever." When you find the right company with a strong management team, there is no reason to get out of your position. Hold on until you no longer believe in the long-term vision;

8. "If past history were all it takes to play the game of money, the richest people would be librarians." Investors need to have a sense of intrinsic value and a vision for the future. Those who merely look at past trends will remain in the dust;

9. “The price is what you pay. Value is what you get ”. Investors should try to find investments with a clear discrepancy between value and price. Estimating value implies a vision for the future that goes beyond the present;

10. "It takes 20 years to build a reputation and five minutes to ruin it." Humans judge and remember the negative much more than the positive. Their values and principles must remain true to maintain their reputation.