A reminder for all those prone to panic or seeking a quick buck3 Apr 2022 16:12
The 'Oracle of Omaha'
Having successfully run Berkshire Hathaway, a holding company for a variety of businesses, for over 50 years, Warren Buffett has lived through his fair share of uncertain times.
Despite owning a wide mix of companies, Buffett's Berkshire Hathaway has seen its value fall by more than 30% six times between 1979 and 2019. In early 2000, Berkshire lost 44%.
However, Buffett is currently the eighth richest person in the world and has been dubbed the 'Oracle of Omaha' from his investment choices. There are some valuable lessons we can learn from his experiences.
Be fearful when others are greedy and be greedy when others are fearful.
One of Buffett's most famous quotes tells us we should keep our cool when it comes to investing.
Share prices and the stock market can overreact in the short term. Investors' emotions can come to the fore and share prices can move away from what the company's really worth. The difference between price and value is essential for investors.
When markets seem to be taking a turn for the worst, it's essential to hold your nerve and think long term.
Of course, we need to watch out for the opposite too. When investors get carried away, prices can rise to unsustainable levels – like we saw in the dotcom bubble of the late 90s. This is when Buffett tells us to be fearful.
Remember though, all investments can fall as well as rise in value, so you could get back less than you invest.