The answer is simple:
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It’s because many good companies stocks are discounted now
His favorite saying is
buy good companies at fair price
And right now, in the midst of Russia’s invasion of Ukraine that’s making a storm in the world’s politics, not to mention weaponry and even grains, it’s causing power uncertainties which trickle into the entire world.
People get scared and fearful, and they start selling their investments at discount and even companies’ businesses can be affected as well, so this causes share prices of good companies to tumble (even if the companies are doing okay).
The trick: good research + discount + long term hodl
In 1974, Warren’s company bought Washington Post shares at a deep discount during the financial crisis then. Without even factoring dividends, the purchase had returned more than 400X when it was acquired by Amazon for a sweet $250M.
There were 3 reasons why it worked:
- Warren did his research: he knew the company is good
- Discounted price
- He wasnt looking for a quick flip – he would have made money too, but the fat stacks came with market recovery and growth of the business and market as a whole over a period of time
What does this mean for you?
We dont have as deep pockets as Warren, but we can learn a couple of things:
- Have a list of good companies that you had researched
- You can dollar cost average (ie buying every month or quarter or year)
- Hodl until it reaches the profit price you’re happy with (or live with the dividends)
I’m the founder and writer here at NigelChua.com; as well as serial entrepreneur, therapy business entrepreneur, digital entrepreneur, investor and also happy husband, father and Christian.
Started and sold off a business for 7-figures; built another 7-figure one and growing it further, plus building/investing into other businesses and investments as well as advisory works.
Nowadays I share and teach entrepreneurship, financial independence, retiring early as well as building and living a life you love.
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