In shaky markets words of wisdom rule
By Dian Vujovich
Over the past few days we’ve see the DJIA go from hitting 2008 highs to falling back from them. By the close of business on Friday, that index landed at 11,192.58. The S&P 500 was off too. Commodity and gold prices as well.
Financial reporters write that the reason for all the downturns is China.
Apparently China, the world’s global growth hot spot, seems to be cooling. Which, the wise ones write, could mean that the US’s current slow growth pace could become even more stymied.
Could be. Maybe not. Then again, who knows.
What we do know, however, is that the investing arena is not a stagnant environment. It’s as ever-changing as it is stock, sector, country or product fickle.
The best we can do when participating in it is to remember that.
To help you on that score, InvestorPlace.com compiled a list of 10 of Warren Buffett’s quotes. Buffett’s not only made oodles of money and been a wise investor but also knows how to put some common sense into always unfigureoutable markets. Here are quotes from that piece (http://tinyurl.com/2aceeqv ):
•1: Not Every Investment Can Be a Home Run: I don’t look to jump over 7-foot bars: I look around for 1-foot bars that I can step over.
•2: Weighted Portfolios Can Be Good – and Profitable. Wide diversification is only required when investors do not understand what they are doing.
•3: Never Pay Retail. Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.
•4: Invest in Companies, Not Their CEOs. I try to buy stock in businesses that are so wonderful that an idiot can run them. Because sooner or later, one will.
•5: Remember that Past Performance Means Nothing. If past history was all there was to the game, the richest people would be librarians.
•6: Don’t Over Think It. The business schools reward difficult complex behavior more than simple behavior, but simple behavior is more effective.
•7: There Is No Magic Chart or Statistic for Investing. Beware of geeks bearing formulas.
•8: Know When to Cut Your Losses. Should you find yourself in a chronically leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks.
•9: Know Your Strengths – And Weaknesses. I happen to have a talent for allocating capital. But my ability to use that talent is completely dependent on the society I was born into. If I’d been born into a tribe of hunters, this talent of mine would be pretty worthless.
•10: Challenges Can Expose the Truth. Only when the tide goes out do you discover who’s been swimming naked.
Don’t you just love common sense.
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