7 Timely Warren Buffett Quotes to Help You In 2022's Manic Market
7 Timely Warren Buffett Quotes to Help You In 2022's Manic Market
Let the Oracle of Omaha be your guide in today's tough market.
By Sigrid Forberg Jan. 29, 2022
Warren Buffett is a remarkable investor. He’s grown his business, Berkshire Hathaway, from a failing textile company into a multinational conglomerate with stakes in Geico, Apple and Coca-Cola.
Buffett has dropped countless gems of wisdom over the years, but the following seven quotes offer investors particularly timely advice on how to invest in stocks today — maybe even with your spare change.
1. Fight against the ravages of inflation
“Inflation acts as a gigantic corporate tapeworm. That tapeworm preemptively consumes its requisite daily diet of investment dollars regardless of the health of the host organism. Regardless of a company's profits, it has to spend more on receivables, inventory, and fixed assets to simply equal the unit volume of the previous year.”
Buffett offered this colorful image back in his 1981 annual letter to shareholders. The billionaire investor described high inflation as a “tax on capital” that dissuades corporate investment.
With inflation at a worrisome 7%, a level not seen in close to 40 years, investors might want to think about assets that are immune (or at least not as vulnerable) to the ravages of rising costs.
One example other billionaires like Bill Gates have taken to recently is investing in farmland. Agriculture offers steady, reliable returns — whatever the state of the economy, people still need to eat.
Other assets that have historically done well during periods of high inflation include gold and real estate.
2. Don’t follow the herd
“Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can't buy what is popular and do well.”
According to Bank of America, equity funds took in more than $1 trillion in cash in 2021, exceeding the combined total from the past two decades.
Whether you’re new to investing or you’ve been at it for ages, going against the grain is often the prudent thing to do.
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