It sounds cringy and a little overused indeed. But it can’t be helped, no tagline resonates more with me than “Stock Investing 101”. Why?
Because I want to share knowledge about investment, especially stock investing, from the most common, to detailed analysis, to microscopic, to even molecular. The primary condition is that the knowledge conveyed must be timeless. So whenever my portfolio is opened, someone will at least get relevant bits of knowledge.
What is Timeless Investment?
Note that world’s best investors who are still actively managing funds like Warren Buffett and Charlie Munger, or investors who think it’s enough already like Peter Lynch, have always given the same investment advice since decades ago.
It proves that whether it’s Buffett, Munger or Lynch, they still adhere to the same investing principles, even after more than 40 years of being involved in the world of capital markets.
The term New Paradigm has repeatedly appeared to break the stigma that their investment method is the most effective. However, they have repeatedly succeeded in outperforming the market by using the old paradigm.
Coupled with their record of success in getting through several crises that have occurred in the American capital market, it shows that the investment methods of these seasoned investors are truly resilient.
Why It Isn’t Popular?
If it really is resistant to the onslaught, why are there still so many people who are not interested in following in their footsteps? Is the investment method too difficult to copy?
Well, apparently no. In his first interview in 1985, Warren Buffett faced the following questions:
“Warren, your approach seems so simple. Why doesn’t everybody do it?”
“Well, I think partly because it is so simple,” Buffett answered.
“The academics, for example,” Buffett continued, “focus on all kinds of variables.”
“Because the data is there. So they focus on whether if you buy stocks on Tuesday and sell them on Friday you’re better off.”
“Or people that buy in election years and sell them another year you’re better off.”
“There are all these variables because the data is there. And they learn how to manipulate data.”
“As a friend of mine said, to a man with a hammer, everything looks like nails.”
“And once you have these skills you’re just dying to utilize them in some way.”
“But they aren’t important.”
The interview ended with a firm closing from Warren Buffett.
“If I was asked to participate in a business opportunity, would it make any difference to me whether I buy it on Tuesday, during Saturday or an election year? It’s not what a businessman thinks about in buying businesses”
“So I think about it when buying stocks because stocks are just pieces of businesses.”
Invest for Future
It almost sounded like Warren Buffett’s advice in the interview has been stated recently, right? When in fact he had told us the same thing, even 4 decades before today.
But as he already foreshadows, in the end, only a handful of investors who want to agree with the way.
At the time of the interview (1985), Warren Buffett’s total wealth reached a fantastic number, namely 1 billion US Dollars!
However, when compared to his wealth today, that amount only made up 1%! In other words, from 1985 to 2021, Warren Buffett’s total wealth increased by 9700%!
While the total return in 56 years of his journey at Berkshire Hathaway is 2,810,526%!
And again in 2020, in his Shareholder Letter, Buffett is sharing the same wisdom. Never change. Timeless.
Buffett has proven it, and it seems like he has nothing to hide. Rich from investment does not need super intellectual quality, it’s just that it takes tons of temperamental quality, and you’re good to go.