Should investors desire rising share prices or falling ones? Warren Buffett's thoughts

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In these febrile times it worth remembering some wise words of Warren Buffett concerning the value investor’s attitude to falling share prices.  Truly disciplined value investors celebrate when shares fall in price.  I’m currently writing the first chapter of third volume of The Deals of Warren Buffett which is on the purchase of shares in Wells Fargo in the middle of the California recession of 1990, when investors were, in general, running away from the banking sector, pushing down share prices.

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With regard to Wells Fargo Buffett wrote that “we welcomed the decline because it allowed us to pick up many more shares at the new, panic prices”. Investors, that is, those who expect to continue buying investments throughout their lifetimes, should have the attitude of looking to buy when shares are cheap and therefore feel good when prices decline, “instead many illogically become euphoric when stock prices rise and unhappy when they fall.” (1990 Letter to BH shareholders)

Do you want food prices to rise?

Buffett points out that people are not irrational about pricing when it comes to food.  They know that they will, throughout a lifetime be buyers of food, and so welcome falling prices and dislike rising prices. In his 1997 letter he is even more specific, focusing on his favourite, hamburgers: “If you plan to eat hamburgers throughout your life and are not a cattle producer,

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