Do you remember when you, or perhaps your son or daughter learned to drive?
When you “got your Ls”, all of a sudden you noticed all the other driver-drivers on the road, right?
Or if you or your partner were pregnant, have you seen pregnant women everywhere?
Maybe when you bought a car, you suddenly realized how many others of the same model were on the road?
Of course, there were actually no new drivers or newly pregnant women. There was no sudden surge in sales of the same car model you now own.
Just our brain is set up to recognize the similarities between us and others.
I’m not an evolutionary biologist, but you can understand why. Creating these connections strengthens the bonds between people – an important building block in building the communities and societies that have helped us advance as a species.
The same goes for investing.
Clearly, global stock markets have lost $ 16 trillion in value (yes, with a T) since the last peak.
The falls have been severe for many of us.
It seems that everywhere you look, there are stories of losses.
At least we’re at it this time, I guess.
But that’s another thing: these stories sell because people internally react to bad news.
“If you bleed, you lead” – this is the newspaper maxim.
Thus, bad news will not only be more noticeable, but we are more likely to notice and perceive this bad news if we can relate to it.
So you may not have noticed – and if you did, you almost certainly wouldn’t have given it the same weight – the recent Warren Buffett stories.
While headlines about bear markets y technology stocksor failure bitcoin (CRYPT: BTC) (this is a completely different article), and the market is really losing significant value, there are other stories like Buffett’s.
It turns out Buffett was buying.
And do not just buy, and BUY.
He has apparently invested $ 74 billion in the last couple of months.
Which is great.
And deserves more headlines than he got.
Because Buffett knows that the rest of us need to remember that if the news is full of what just happened and if we are tempted to think in terms of extrapolation rather than cycles, buying when others are afraid is usually a very smart option.
Let me express this more seriously:
Now many people are selling in fear.
Some hold on to money, trying to avoid the pain of loss.
And the world’s biggest investor is buying.
Now, maybe this time, after more than 55 years in a row Berkshire Hathaway Inc. (NYSE: BRK.A) (NYSE: BRK.B)…
Perhaps, after countless headlines for decades, he mistakenly wondered if Buffett was an old hat …
Perhaps there is a chance that he is making a big mistake.
But if Buffett buys and others sell, or froze in fear …
Isn’t there a chance we should spend less time thinking about our losses and a little more time imitating a person who has spent decades demonstrating the value of long-term investing?
Do you think there could be a pretty big chance?
Yes, I do too.
I cannot suggest that the losses be less. I can’t stop worrying. I can’t force the market to turn by force of will.
But I, like you, can keep my nose up and still buy looking at the horizon, and believe in the long-term potential of investing like Warren Buffett … for decades.
Or you can be like “smart money” and try to calculate market time, guess macro forecasts, trade and exit, check your brokerage dozens of times a day and make a fuss over you.
I don’t know about you, and I do with Uncle Warren.