Core Insights - Warren Buffett emphasizes that fear is a costly force in investing, often leading to hasty decisions when patience is more beneficial [1][2] - Active trading and high-frequency strategies are frequently detrimental, as highlighted by Buffett's warning against selling quality businesses during periods of fear [1] - The market often sees a transfer of ownership from fearful investors to those who remain patient during volatile times [2] Market Behavior - Investors tend to sell during spikes in volatility, not due to changes in business outlook, but because of discomfort with uncertainty [2] - Scary news can create investment opportunities, as prices may disconnect from intrinsic value during periods of high uncertainty [3] Investment Philosophy - Berkshire Hathaway's approach to crises is shaped by the understanding that earnings will be volatile, and the focus should be on avoiding permanent loss rather than short-term pain [4] - Selling during panic can lead to two mistakes: buying without conviction and selling when future returns are likely to be highest [5] - Most long-term investment failures are attributed to poor behavior surrounding fundamentally sound businesses rather than the businesses themselves [5]
‘Selling Fine Businesses on Scary News is Usually a Bad Decision’: Berkshire’s Warren Buffett Warns Panic Selling Will Usually Lose You Money