Berkshire Hathaway founder and chairman Warren Buffett has offered a variety of investment advice over the years. Known for taking a long-term approach to stocks, sticking to fundamentals and taking calculated but thoughtful risks, the so-called Wisdom of Omaha is a frequent move online.
In investment circles, Buffett and his longtime business partner and friend, the late Charlie Munger, are known for their no-nonsense approach to business and relatively modest lifestyles compared to their immense wealth.
Quote of the day from Warren Buffett
“People are really weird … they should want the stock market to go down. They should want to buy at a lower price.”
What does Warren Buffett’s quote mean?
The ace investor believes that people should be happy when the stock market goes down because it lowers the price of the stock and they have the opportunity to buy more. In an interview with CNBC, Buffett explained his logic using food prices.
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“We’re a net buyer of stocks over time. (It’s) just like being a net buyer of food — except I’ll be buying food for the rest of my life, and I hope food goes down tomorrow,” he said. And he added: “So when the stock goes down, we’re going to buy balanced, and who wouldn’t rather buy at a lower price than a higher one?”
Buffett noted that the discomfort with a falling market is purely psychological. “People are really weird about it (the market going down). I mean, most people are saving, and that means they’re going to be net buyers, and they should want the stock market to go down. They should want to buy at a lower price. They feel like they just feel better when stocks go up,” he noted.
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It’s an investment philosophy that Buffett has often repeated. In his 2016 annual letter to Berkshire Hathaway shareholders, the billionaire wrote that when dark clouds fill the economic sky, “gold will briefly rain” and that “it is imperative that we rush out with basins, not spoons.” The point is that market declines make otherwise expensive stocks more accessible and reasonably priced.
WATCH: Warren Buffett on why he should want market dips
Who is Warren Buffet — the ‘Oracle of Omaha’?
Buffett and Munger were the architects who transformed Berkshire Hathaway Inc. over nearly 60 years. from a failing textile manufacturer to an empire worth billions. Decades of compounding returns have made the pair of billionaires and folk heroes adoring investors.
Notably, in January of this year, Buffett handed over the reins and the position of CEO to successor Greg Abel. But his ‘bull run’ with Berkshire is legendary – over 60 years (1964-2024), he earned over 55,00,000% returns, built the group to $1.2 trillion and expanded its Class A shares to a value of $167 billion.
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Known as the ‘Oracle of Omaha’ for his mysterious stock forecasting, Buffett gained fame and investor confidence by picking companies (Apple, Bank of America, Coca-Cola, etc.) that exploded and now make up 70% of Berkshire’s $263 billion stock portfolio. He called it how “one great deal can balance out the many mediocre decisions that are inevitable”.
Buffett’s net worth is estimated at $152 billion, making him the 10th richest person in the world, according to the Bloomberg Billionaire Index.
Disclaimer: This story is for educational purposes only. The above opinions and recommendations are those of individual analysts or brokerage firms and not of Mint. We encourage investors to check with certified professionals before making any investment decision.
