If Warren Buffett is known for anything, it is for his legendary patience. He is willing to build up tens of billions in cash, even well over 100 billion, and not feel compelled to use it until the deal is right. According to Buffett, who has compared investing to being a baseball batter waiting for just the right pitch, the stock market is the ideal place for such patience.
“The stock market is the most obliging, money-making place in the world because you don’t have to do anything,” Warren Buffett said at the 2012 Berkshire Hathaway Annual Meeting. “You know, you sit there with thousands of businesses being priced at the same price for the buyer and the seller. . . and it changes every day, and you’ve got lots of information about most of those businesses, and you don’t have to do anything. Compare that to any other investment alternative you’ve got. I mean, you can’t do that with farms. If you own a farm and the guy has the farm next to you and you’d kind of like to buy him out or something, he’s not going to name a price every day at which he’ll buy your farm or sell you his farm, but you can do that with Berkshire Hathaway or IBM. It’s a marvelous game. The rules are stacked in your favor, if you don’t turn those rules upside down and start behaving like the drunken psychotic instead of the guy that’s there to take advantage of it.”
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© 2021 David Mazor
Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.