Warren Buffett has repeatedly urged investors to resist giving into fear during market mayhem. The investor views periods of worry and uncertainty as fantastic opportunities to snag bargains. Buffett has warned that panic-selling can be expensive, and may rob investors of long-term returns. Loading Something is loading.
For more than three decades, Warren Buffett has advised investors not to succumb to fear, and to view periods of panic in financial markets as opportunities to scoop up bargains.
The legendary stock-picker and Berkshire Hathaway CEO has also warned that investors who frantically sell their holdings risk incurring hefty fees, whereas those who sit tight and maintain a blue-chip portfolio are virtually guaranteed a solid return in the long run.
Here are 7 of Buffett’s best quotes about fear:1. “We have usually made our best purchases when apprehensions about some macro event were at a peak. Fear is the foe of the faddist, but the friend of the fundamentalist.” (1994)
2. “We’ve put a lot of money to work during the chaos of the last two years. It’s been an ideal period for investors: A climate of fear is their best friend. Those who invest only when commentators are upbeat end up paying a heavy price for meaningless reassurance.” (2009)
3. “During such scary periods, you should never forget two things: First, widespread fear is your friend as an investor, because it serves up bargain purchases. Second, personal fear is your enemy. It will also be unwarranted. Investors who avoid high and unnecessary costs and simply sit for an extended period with a collection of large, conservatively-financed American businesses will almost certainly do well.” (2016)
4. “A ‘flash crash’ or some other extreme market fluctuation can’t hurt an investor any more than an erratic and mouthy neighbor can hurt my farm investment. Indeed, tumbling markets can be helpful to the true investor if he has cash available when prices get far out of line with values. A climate of fear is your friend when investing; a euphoric world is your enemy.” (2013)
5. “Though markets are generally rational, they occasionally do crazy things. Seizing the opportunities then offered does not require great intelligence, a degree in economics, or a familiarity with Wall Street jargon such as alpha and beta. What investors need instead is an ability to both disregard mob fears or enthusiasms, and to focus on a few simple fundamentals. A willingness to look unimaginative for a sustained period – or even to look foolish – is also essential.” (2017)
6. “Some people are more subject to fear than others. It’s like the virus — it strikes some people with much greater ferocity than others. Some people can handle it psychologically. If you can’t, then you really shouldn’t own stocks, because you’re going to buy and sell them at the wrong time.” (2020)
7. “Occasional outbreaks of those two super-contagious diseases, fear and greed, will forever occur in the investment community. The timing of these epidemics will be unpredictable. And the market aberrations produced by them will be equally unpredictable, both as to duration and degree. Therefore, we never try to anticipate the arrival or departure of either disease. Our goal is more modest: We simply attempt to be fearful when others are greedy, and to be greedy only when others are fearful.” (1986)
Read more: Insider recently interviewed the CEOs of 5 Berkshire Hathaway businesses: See’s Candies, Dairy Queen, Borsheims, Cort, and Brooks Running. They offered a rare glimpse inside Warren Buffett’s company, and shared how they’re dealing with the pandemic and inflation.
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