Rest In Peace, Warren Buffett
Chains of habit are too light to be felt until they are too heavy to be broken.
Warren Buffett
Along with most investors of the present day, I’ve not known a world without Warren Buffett holding court in Omaha, Nebraska. When I started in the financial industry in June 2000, I asked people for suggestions of books to read to learn about top investors and their strategies.
I picked up Mary Buffett’s Buffettology and was blown away by the simplicity of Buffett’s approach. I was impressed by his ability to identify winning stocks, his patience for owning top names for the long-term, and his insistence in staying true to himself and his process.
And for a young technical analyst trading the short-term “flickering ticks” in his Datek Online account every day, the idea of being a long-term grower of wealth through the power of compound interest was a real novelty.
I remember when I first read that Buffett didn’t have a computer on his desk, didn’t use e-mail, and pretty much skipped the whole technology thing. He stuck with his own approach and processes, and that just didn’t involve a computer. I respect that.
While the Buffett-style value approach has come in and out of favor over my career, there’s no denying the long-term benefits to the strategy of buying good companies at a discount and then holding them for a long time.
And while I never attended a Berkshire annual meeting, I watched any video clips I could find. I used to love how Buffett would dismiss cryptocurrencies, how Charlie Munger and his timeless insights would remind me why Poor Charlie’s Almanack was a favorite read, and how so many investors would hang on their every word.
Today’s quote seems so appropriate for 2025. Now that the low-volatility bull market of 2024 is behind us, and we are now faced with headline risk and elevated volatility, it feels like all the bad habits are coming out.
You see, in bull markets you can get away with questionable risk controls, meager money management skills, and poor decision making processes. Bull markets tend to hide all sorts of bad habits!
But now that the market is grappling with inflationary pressures and tariff risks and crippling uncertainty, those bad habits can have a real negative impact on your portfolio.
It’s ok to make mistakes. It’s ok to not have a perfect investment process. It’s ok to have bad trades.
But it’s not ok to keep making the same mistakes when you can easily make changes to your investment process.
Mindless investors build up bad habits, but because the chains are just too heavy, they never make the time or effort for meaningful change.
Mindful investors know it’s never too late to unwind bad habits, upgrade your investment process, and improve your market awareness!
RR#6,
Dave
PS- Need help applying throwing off the chains of bad habits and upgrading your market awareness? Our Market Misbehavior premium membership may just be the perfect holiday gift to yourself! Use code MMWEEKLY for 30% off the first 12 months on any plan.
Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.
The author does not have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author and do not in any way represent the views or opinions of any other person or entity.
