Buffett's thoughts on investing

Some worthy reminders from Mr Buffett himself. His advice rings kind of obvious when you hear it, but so many people act like they know better.

He brought up this old analogy where you own a farm and every day your neighbour comes and wants to buy/sell a piece of land. Every day he comes with a price. Should you really panic and sell to him if every day he’s coming with a lower price? This is of course the analogy to the stock market.

The second point he made was that you will do much better in the long term, if you just own a piece of the market, rather than trying outsmart other guys. Trading a piece of business around is the wrong approach, it does not deliver value.


The farm story is extracted from his 2013 letter to shareholders. The relevant extract is below, and people could do worse things that spending time reading it.

EDIT: I split the thread, I did not want this nugget to be lost among 2500+ other posts