You have done your research and identified a great company. It’s a company that you think will grow and bring great returns for the next 20-30 years, and you are dying to add it to your portfolio. But then a little voice creeps into your head, saying “Maybe I should wait for a price decline?” So, should you wait for price declines before buying great companies?
“I think it’s better just to own them,” Warren Buffett said at the 1996 Berkshire Hathaway Annual Meeting. “So, to sit there and hope that you buy them in the throes of some panic, you know, that you sort of take the attitude of a mortician, you know, waiting for a flu epidemic or something… I’m not sure that will be a great technique.”
(Note: That this doesn’t mean that you should buy at any price, and that Buffett says that he wouldn’t buy a stock if it is selling at an “egregious price.”)
Buffett’s full explanation
See the complete Lessons From Warren Buffett series
© 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.