Buffett tells us to have the right mindset when holding shares

Warren Buffett, speaking a few days ago, advised us to have a far horizon in mind when holding shares and to make sure we had the psychological resilience to be an investor.

Buy for the long term

“You shouldn’t buy stocks unless you expect to hold them for a very extended period and you were prepared, financially and psychologically, to hold them the same way you would hold a farm and never look at a quote.”

If the company is good, with a sound business, sound strategic position and excellent managerial team then why worry if Mr Market lowers the share price?

“You’ve got to be prepared when you buy a stock to have it go down 50% or more and be comfortable with it as long as you are comfortable with the holding.

There have been three times in Berkshire’s history when the price of Berkshire stock went down 50%. If you held it on borrowed money you could have been cleaned out. There wasn’t anything wrong with Berkshire when those three times occurred, but if you’re gonna look at the price of the stock and think that you have to act because you think that its going to do this or that…[well] you’ve got to be in the right psychological position.”

You need the right emotional base

“Frankly, some people are more subject to fear than others. It’s like the virus. It

………………To read more subscribe to my premium newsletter Deep Value Shares – click here http://newsletters.advfn.com/deepvalueshares/subscribe-1

 

CLICK HERE TO REGISTER FOR FREE ON ADVFN, the world's leading stocks and shares information website, provides the private investor with all the latest high-tech trading tools and includes live price data streaming, stock quotes and the option to access 'Level 2' data on all of the world's key exchanges (LSE, NYSE, NASDAQ, Euronext etc).

This area of the ADVFN.com site is for independent financial commentary. These blogs are provided by independent authors via a common carrier platform and do not represent the opinions of ADVFN Plc. ADVFN Plc does not monitor, approve, endorse or exert editorial control over these articles and does not therefore accept responsibility for or make any warranties in connection with or recommend that you or any third party rely on such information. The information available at ADVFN.com is for your general information and use and is not intended to address your particular requirements. In particular, the information does not constitute any form of advice or recommendation by ADVFN.COM and is not intended to be relied upon by users in making (or refraining from making) any investment decisions. Authors may or may not have positions in stocks that they are discussing but it should be considered very likely that their opinions are aligned with their trading and that they hold positions in companies, forex, commodities and other instruments they discuss.

WHAT IS ADVFN?

ADVFN covers all things stock market.

From the news and opinion pieces on pages like this to share discussion forums, charting tools, financials, live share prices and Level 2, order book data

If you trade or invest ADVFN has the tools you need to make the right decisions.

• 

  101 Ways to Pick Stock Market Winners

  You need the number one bestselling investment guide, the definitive text for day traders, investors and stock pickers.

• 

  The Death of Wealth

  Dissecting the global economy and the financial markets, the book lays out the evidence for the next economic game changer: the Death of Wealth.

• 

  Jessica K

• 

  Luis Aureliano

• 

  Alice Hudson

• 

  Thierry Laduguie