Biggest JOKE by WARREN BUFFETT on NORMAL INVESTORS
December 4, 17
Biggest JOKE by WARREN BUFFETT on NORMAL INVESTORS
Greetings from Hitesh!
When big guys crakes a joke, it takes a time for normal guys to
understand. Most of the followers and readers of the WARREN BUFFETT will be
aware about his famous rules of investing. Let me repeat that. Buffett has
always quoted these two rules of investing.
I always follow two rules in investing.
1. Never Lose Money
2.
Always remember Rule Number 1.
Most NORMAL guys quote these two rules when they approach
the investing. They believe that there can’t be a loss, if you follow Buffett
approach. This is the biggest misconception on the part of the NORMAL guys and
joke from BUFFET side.
Why it is a joke
for NORMAL Guy?
Just read annual letters by BUFFETT and you will see he
has booked losses lot of time over a period of last 50 plus years, he has made
tons of mistakes and missed number of opportunities also. So, in reality what
he has told in above rules and what he writes in his annual letters both are
not matching. I will go with the ANNUAL LETTERS as they are talking about the
FACTS while the RULES may be seen as a MOTIVATIONAL SPEAKERS TIP.
But BUFFETT is the most comprehensive thinker we have ever
known and when he says two opposite things – it must have some meanings.
What is the
meaning of “NEVER LOSE MONEY”?
Look at his life style. He is staying in the same house
for the last 50 years. He drives his car. He picks up and drops his guests at
the airport by himself. He always tells never spend money for things you don’t
need or else you will have to sell things you need.
For BUFFETT – “NEVER LOSE MONEY” is a very comprehensive terms
and it applies to all aspects of LIFE and not to only investments, as being
understood by masses.
When you APPLY “NEVER LOSE MONEY” to all areas of your
life – you will have more and more money for investment and you will have more
and more possibilities for making new money.
Where is your
BIGGEST LOSS coming from?
Normal guys biggest loss comes from life style related
expenses, which are not mostly need oriented but mostly to keep up with his or
her friends and neighbours. I see many guys with 2-3 mobiles / 2-3 cars and
many such things. It is normal to find unpacked boxes of things lying in the
storage areas of many houses. The things, which you buy and do not use is 100%
loss according to BUFFETT.
So, if you want to follow Buffett rule, you will have to
look at your life and expenses very closely.
What NEXT?
When great guys or saints say something – it has a deep
meaning but normal guys picks up according to his or her level of understanding
and comforts. This creates a communication gap. This gap is results in the
level of success between them and us.
Have a HAPPY WEEK AHEAD.
Live With Passion…Invest With Passion.
Hitesh Parikh
Your Personal Destiny Manager.
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