Investment legend Warren Buffett has a secret to spending money the right way in the stock market. He says this is a basic skill that schools don’t teach.
At Berkshire Hathaway’s annual shareholder meeting on April 30, Buffett advised people not to obsess about finding the perfect time to buy stocks.
Instead, Berkshire Hathaway’s CEO said you should keep investing and then watch the stock market to see if you should buy more or sell that company’s stock.
Warren Buffett says longtime business partner Charlie Munger and other Berkshire Hathaway CEOs have been using this strategy for a long time. This is the secret to more money making opportunities and eases the pressure to forecast the stock market.
“We don’t know what the stock market will do when it opens this Monday,” he said. “We are not good at timing. We are good at figuring out when we can make enough money.”
Buffett says he uses this strategy to find the right price in the stock market rather than trying to predict it. This is almost like having insurance in a volatile market.
He has twice tried to predict the market in advance. Once during the Great Recession in 2008 and once in March 2020, before the Covid-19 pandemic crippled global markets. Those decisions cost Berkshire Hathaway billions of dollars, Buffett said.
The Oracle of Omaha attributes that strategy to the success of Berkshire Hathaway. As of the morning of May 3, the company has a market capitalization of USD 704.29 billion. In other words, this strategy also gives Buffett billionaire status. According to Forbes, the 91-year-old man now has a net worth of $115.2 billion, making him the sixth richest person in the world.
Another billionaire who seems to be pursuing a similar strategy is Tesla and SpaceX CEO Elon Musk. He is currently the richest man in the world.
On May 1, Musk tweeted a well-known investment advice: “Buy stock in a company that produces products and services you believe in. Only sell if you think the products and services are good for you. their service gets worse. Don’t panic if the market is faltering, this will help you in the long run.”