To Build Inevitable Wealth, Simply Avoid Financial Ruin
To Build Inevitable Wealth, Simply Avoid Financial Ruin
By Darius Foroux
In 1942, the world was at war. In December of the previous year, the United States entered WWII when Japan attacked Pearl Harbor. By that time, the US got into a war that started in 1939. While Americans were quick to adjust back at home, by turning factories into manufacturers of weaponry, the war itself didn’t play out well at all. America was struggling in the Pacific. It was a rough first year with many casualties. Some people started to lose faith.
That was the year an 11-year-old boy made his first stock purchase. He bought six shares of Cities Service, an energy company, for $38 per share. He bought three shares for himself and three shares for his sister, Doris Buffett. The boy was of course Warren Buffett, the greatest investor of all time.
About 1942, he remembers, “We were losing the war in the Pacific.” Buffett learned an important lesson: “Never bet against America.”
That same year, in the midst of the crisis, the Manhattan Project started, which eventually developed into a nuclear weapon that ended the war in 1945.
There’s Always Bad News
When Warren Buffett bought his first stock, it looked like the allied forces were losing the war. But as long as you’re bullish on the future, you must become callous to what’s reported on the news. Buffett says:
“If it’s a good business at a good price, we buy it. There is always going to be bad news out there.”
Buffett and his partner Charlie Munger claim they never allowed macro factors to interfere with their investment process. They have a system for picking stocks and they have a mental model for staying in those stocks.
When you want to make an investment, whether that’s in the stock market, real estate, or in a private business, I bet that you can point to at least a handful of factors and say, “Let’s see how that plays out.”
Maybe you want to see how inflation plays out or whether a geopolitical conflict gets solved, but let’s face it, these are excuses. As Buffett says, there will always be bad news out there.
Instead of focusing on the news or listening to the opinions of people on CNBC, FinTwit, or YouTube, focus on your behavior.
There Are Many Ways To Get Rich; Only A Few Ways To Go Broke
To continue reading, please go to the original article here: