I came across this in the media, and it serves as a timely reminder of why patience is still one of the most undervalued traits in investing. When markets go through a rough patch as they inevitably do, many investors instinctively reach for the sell button as if it were a fire alarm. The truly successful ones know better.
Warren Buffett, ever the voice of calm amid chaos, brushed off recent market volatility that had many investors wringing their hands. Speaking at Berkshire Hathaway’s annual meeting, he remarked that what had happened in the last 30, 45 days was really nothing.
He went on to remind everyone that Berkshire Hathaway’s stock has dropped by 50% three times over the last 60 years and yet, here we are. The company did not fall apart. The world did not end.
He wrapped up his remarks with another gem, noting “this has not been a dramatic bear market or anything close to it.” Well, I always remind my clients of this simple truth – everyone says they want to invest like Warren Buffett but when markets wobble, very few can think or act like him.
Volatility is not your enemy, your emotions are. If Warren Buffett can stomach a 50% drop with a shrug, maybe the rest of us can learn to sit tight through a 5% wobble without losing sleep.
On one last note, most markets have made it all the way back from the crash in early April. For all the panic, the headlines, and the hand-wringing, we are right about where we started.
All our risk asset positions have also bounced back. If you had simply done nothing, you would probably be fine. Imagine that.
