I’m a big believer in taking small actions to help frame your mindset for larger ones. Whether it’s making your bed in the morning or starting your week off reading quotes from Berkshire Hathaway Inc. (NYSE: BRK.A)(NYSE: BRK.B) Warren Buffett, I find small successes can feed into large ones.
Of the above examples, I’m more of a fan of the latter (although I find no issue with a made bed). Buffett is not only one of the greatest investors of all time, but he’s also one of the best investing educators. I think all ASX investors can learn something from a man with such an interesting and successful life.
So drawing from the comprehensive list of Buffett quotes that our Fool colleagues over in the US have knocked up, here are 3 Warren Buffett quotes to help you start your week off right!
Quote 1
“I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years.”
This is a quote I love, especially its opening line, “I never attempt to make money on the stock market”. Buffett sees making money only as a consequence of successful investing – you get the horse right and the cart follows.
Viewing ASX shares through this mindset is a great way to think about investing in my view. Too often, hopeful investors get distracted by the day-to-day ructions of the share market and forget that real investing, Buffett-style, is about acquiring ownership of quality companies – not trading ticker symbols.
If you truly want to adopt this mindset, try imagining holding your ASX shares for the next 5 years and assess how comfortable it makes you!
Quote 2
“Success in investing doesn’t correlate with IQ … what you need is the temperament to control the urges that get other people into trouble in investing.”
Too often, people are put off from investing in shares because they think it’s something only ‘smart people’ do. But Buffett disproved this notion with just one line here, highlighting that successful investors are more likely to be emotionally detached than smart.
As Warren Buffett rightly points out, most aspiring investors slip up by acting with emotion – either selling their shares in a market crash out of fear, or buying overvalued shares out of greed. Mastering these emotions is the best way to invest successfully, not by getting 5 PhDs from university.
Quote 3
“Cash … is to a business as oxygen is to an individual: never thought about when it is present, the only thing in mind when it is absent.”
Here Buffett is talking about the importance of buying companies that invest their cash prudently and aim to never be caught short. The only thing that can really bankrupt a company is debt, at the end of the day. And no one really cares about debt until there’s a crisis. A company’s cash levels and debt burden should be the first things you look at when assessing a potential investment.
I also think this quote can be translated into your own cash position. Right now, the S&P/ASX 200 Index (ASX: XJO) is motoring along just fine. But if there happens to be another market crash in 2020, you’ll regret not putting aside some cash for any ASX shares that might go on sale.
For some more shares you should take a look at for this week, don’t miss the report below!
One trick to potentially generating life-changing wealth from the stock market is to buy early-stage growth companies when their share prices still look dirt cheap.
Motley Fool’s resident tech stock expert Dr. Anirban Mahanti has identified 5 stocks he thinks are screaming buys. And you can buy them now for less than $5 a share!
*Extreme Opportunities returns as of June 5th 2020
More reading
- Shares up? Haven’t you seen the economy?
- These 5 ASX shares were last week’s worst performers
- Why the Reliance Worldwide share price is outperforming today
- Leading brokers name 3 ASX 200 shares to buy right now
- These 5 ASX shares were last week’s best performers
Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Berkshire Hathaway (B shares) and recommends the following options: long January 2021 $200 calls on Berkshire Hathaway (B shares), short January 2021 $200 puts on Berkshire Hathaway (B shares), and short June 2020 $205 calls on Berkshire Hathaway (B shares). The Motley Fool Australia has recommended Berkshire Hathaway (B shares). We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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