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Billionaire Warren Buffett's quote about patience comes to mind at a time when the stock markets often swing based on headlines, comments and heightened investor sentiment rather than fundamental factors. Here's what the ‘Oracle of Omaha’ said.
Omaha-based billionaire value investor and former Chief Executive Officer (CEO) of Berkshire Hathaway, who is well known for his long-term investment approach to the stock market, once said that the equity market is a tool which rewards people with patience.
Warren Buffett famously said that the stock market is a device which transfers money from people who are impatient to the accounts of those people who show patience over time, reiterating his value investment stance over high volume trading.
“The stock market is a device to transfer money from the impatient to the patient,” said Warren Buffett.
The billionaire's quote comes to mind at a time when the equity markets often swing based on news headlines, comments and heightened investor emotions over fundamental factors.
What did Warren Buffett mean by this line?
Investors now are often observed to chase quick gains, and in turn, they end up selling out of fear during the overall downtrend in the stock market, rather than focusing on a longer-term perspective.
According to a blog from Alliott NZ, a New Zealand-based advisory firm, explained that through this quote, Warren Buffett meant that people should understand that quality businesses will increase shareholder value over a period of time, irrespective of short-term noise in the stock market.
Through this quote, Warren Buffett, who is also popularly known as the “Oracle of Omaha”, also meant that amid the investing noise related to buzzing sectors, quarterly earnings shocks, macro-economic headlines, and technical indicators, these factors have nothing to do with predicting where the markets will head.
“If you aren’t willing to own a stock for ten years, don’t even think about owning it for ten minutes,” said Warren Buffett, as cited in a blog from One Bridge Wealth Management.
The report also highlighted that investors should understand how patience helps, but also that very few people have the discipline to stay on the course of value investing. Buffett had the stomach for waiting it out when others in the market panicked and sold their holdings.
Warren Buffett on emotions
Mint reported earlier, citing another Warren Buffett quote, which talked about people's emotions when it comes to the philosophy of investing. In an interview with CNBC back in 2018, the billionaire said that people should not expect to manage money successfully till they are able to manage their expectations.
“Until you can manage your emotions, don't expect to manage money,” said Buffett.
The value investors reportedly said that the longer you hold a particular stock, the less risky it becomes and selling the holding is a “dumb thing” to do when the share price drops suddenly.
Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of the individual experts, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
About the Author
Anubhav Mukherjee
Anubhav Mukherjee is a Content Producer for LiveMint covering Business, Corporates, Finance, and Markets. He holds a Post Graduate Diploma in Business...Read More
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