We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.
Interpretation
The quote advises to be cautious when others are overconfident and to take risks when others are scared.
Warren Buffett's quote encapsulates a fundamental principle of investing and decision-making that emphasizes the importance of contrarian thinking. It suggests that during times of market exuberance, one should be wary and cautious, while in times of fear and uncertainty, one should seek opportunities to invest or act decisively. This mindset helps investors align their actions with the market's psychological states, often leading to more prudent and potentially profitable outcomes.
In practice
In a financial seminar discussing investment strategies.
I have no views as to where it will be, but the one thing I can tell you is it won't do anything between now and then except look at you. Whereas, you know, Coca-Cola (KO) will be making money, and I think Wells Fargo (WFC) will be making a lot of money and there will be a lot - and it's a lot - it's a lot better to have a goose that keeps laying eggs than a goose that just sits there and eats insurance and storage and a few things like that.
If the world couldn't see your results, would you rather be thought of as the world's greatest investor but in reality have the world's worst record? Or be thought of as the world's worst investor when you were actually the best?
Cash never makes us happy, but it's better to have the money burning a hole in Berkshire's pocket than resting comfortably in someone else's.
I think you should read everything you can. In my case, by the age of 10, I'd read every book in the Omaha public library about investing, some twice. _x000D_ You need to fill your mind with various competing thoughts and decide which make sense.
The most common cause of low prices is pessimism - some times pervasive, some times specific to a company or industry. We want to do business in such an environment, not because we like pessimism but because we like the prices it produces. It's optimism that is the enemy of the rational buyer.
One’s objective should be to get it right, get it quick, get it out and get it over. Your problem won’t improve with age.
Most so-called writers keep writing and writing with the hope, some day, to find something to say.
Envy and greed starve on a steady diet of thanksgiving.
It is astonishing how elements that seem insoluble become soluble when someone listens.
The smartest people are constantly revising their understanding, reconsidering a problem they thought they’d already solved. They’re open to new points of view, new information, new ideas, contradictions, and challenges to their own way of thinking.
The truth is the kindest thing we can give folks in the end.
At the Egyptian city of Naucratis there was a famous old god whose name was Theuth; the bird which is called the Ibis was sacred to him, and he was the inventor of many arts, such as arithmetic and calculation and geometry and astronomy and draughts and dice, but his great discovery was the use of letters.
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