The Scientific Reason for Buffett Strategy – Buy when Others Sell and Sell when others Buy

 12^th November 2022

The Scientific Reason for Buffett Strategy – Buy when Others Sell and Sell when others Buy

Dear Fellow Investors,

Namaste! We always prefer Saturday to learn something new each weekend. That way we can learn at least 52 new things in a year. Long back my management consultant friend taught me one simple formula – 5 + 1 + 1. He said to work for 5 days. Learn something new or spend quality time with yourself for 1 day. Spend one day with the family. Since then I have always followed this formula. Today I am sharing the science of Buffett's Strategy. 

Buy when others Sell and Sell when others Buy: - 

I am sure all have heard about the above strategy. But I am also equally sure of two things – most people would not have followed the same and second, most people would not have cared to think about the same in a scientific manner. 

When a person like Buffett says something – it has immense importance and it can’t be taken casually. 

So, why he said this strategy? 

How Best Margins Earned by anybody in Business or Investing? 

You can earn the best Margin when you have a MONOPOLY Business or Services and your Monopoly remains intact for N number of years. To have a perfect monopoly business is not possible and very few businesses would be having a near monopoly kind of status at the current time. 

The same is applicable in the investment field. There is no Monopoly. In fact, investment is the most PERFECT MARKET in terms of all legal information sharing. It means what is known to me is known to anybody who is ready to read the company balance sheet and other corporate communications from time to time. So, investment can’t provide the Monopoly to anybody. 

The other alternative of MONOPOLY is to AVOID the Competition. If you can avoid the competition for say some months or days or some minutes also – then during that time you are having a MONOPOLY in doing what you are planning to do. 

Buffett does the same with this strategy. When he is doing the reverse of what all others are doing – he has no competition either in buying or selling. He can take his sweet time buying or selling. He gets the lowest prices to buy and the highest prices to sell. It doesn’t mean that after his buy prices don’t go down or after his sell prices don’t move up. It happens with him also but he is okay with that small pain. 

Why do NORMAL INVESTORS fail to follow this 100% Sure shot profit-making strategy? 

This requires tons of Patience and Conviction in your actions. You need to wait and wait till the market or the share you want to buy reaches the bottom or near the bottom. Not only that – when the Media is full of MANDI talks – it requires immense conviction in your idea to buy. Buffett was holding USD 140 billion in government bonds earning him peanuts interest for 4-6 years before he started investing in 2022. 

In my 30 years of dealing with individual investors of all categories – I have observed that they are always impatient to invest their money as fast as possible so that they don’t lose the earning potential of their money. They lack the conviction to do the REVERSE as Buffett suggests. 

In the process of earning a few percentages – they forget the most important factor of investing – The safety of Capital and timing of Investing. 

In the interest of the MUTUAL FUND industry’s growth – one lie has been repeated N number of times – you can’t time the market so do the SIP. This is the biggest lie and those who are doing SIP are making all fund houses and fund managers billionaires. This lie has gone into the BRAINS of the most educated people also and they are also following the same. 

You can time the MARKET. All you need is the skill sets and Patience, Patience, and Patience to get your turn. 

From April to June 2022 – we have been very actively telling all our readers to buy. Our categorical call was – Market will make a new high by Diwali. The same thing happened yesterday. But Very few had listened. Now, all are ready to invest as the market is moving up, up and up. In May 2020 when the fear of COVID was at the top and nifty was at 8000 – we had given a bold call of Nifty will touch 12000. We were on DOT. 

The point I am driving is – it’s possible to time the market and take proper actions. 

Buffett has made tons of money thanks to this one single skill of timing the market. As a Buffett disciple, I follow him in words and deeds. 

What NEXT? 

I am sure, your parents would have invested lakhs to equip you with the best education. Thanks to that you are earning today in Lakhs or Crores. The way you choose the BEST QUALITY education over Sub-standard education – why you are going for sub-standard Investing with your Capital? Why are you depriving your money to give you the best return? 

I sincerely urge you to follow the above Buffett Strategy while investing. If you find that you are not able to time the market – you can take our help in learning the same. 

Happy Learning.

Follow me on Twitter @hiteshmparikh / WhatsApp -+91-9869425399.

Learn a Lesson. Live with Passion & Invest with Reason.

Hitesh Parikh.