Billionaire Warren Buffett reveals the basic skills that investors need to know when the market is volatile, which are not taught in school.
Investing legend Warren Buffett has a secret to spending money properly 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 over finding the perfect time to buy stocks.
Instead, the Berkshire Hathaway CEO said keep investing, then watch the stock market over time to see if you should buy more or sell that company’s stock.
Warren Buffett says that longtime business partner Charlie Munger and other Berkshire Hathaway CEOs have long used this strategy. This is the secret to more money-making opportunities and relieves some of the pressure of trying to predict the stock market.
“We don’t know what the stock market will do when it opens on Monday,” he said. “We’re not good at timing. We’re good at figuring out when to make enough money.”
Buffett says to use this strategy to find the right stock market direction instead of trying to predict it. This is almost like having an insurance policy in a volatile market.
He 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 have cost Berkshire Hathaway billions of dollars, Buffett said.
The Oracle of Omaha credits that strategy to Berkshire Hathaway’s success. As of the morning of May 3, the company has a market capitalization of 704.29 billion USD. 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 follow a similar strategy is CEO Elon Musk of Tesla and SpaceX. He is currently the richest man in the world.
On May 1, Musk tweeted a familiar piece of investment advice: “Buy stock in some company that produces products and services that you believe in. Only sell if you think the products and services are good for you. their service is getting worse. Don’t panic when the market wobbles. This will help you in the long run.”