Learn to invest with Buffett

Chapter 104

No.17 Chapter 3 Waiting for the best investment opportunity

We must wait for the best investment opportunities to appear, and seizing such opportunities is the real investment.

--Warren Buffett
Many investors underperform because, like baseball, they tend to swing the bat when the lie is bad.Maybe it's not that investors can't recognize a good ball or a good company, but in fact they just can't help but swing their bats randomly, which is the main reason for poor performance.

Toy Cobb once said: "Williams waits for the ball more than others because he waits for a perfect opportunity to hit the ball." This almost harsh principle can explain why Williams is the most famous player in the past 70 years The only hitter to hit .400.Buffett has great admiration for Williams, and on several occasions he has shared his almost draconian principles with Berkshire shareholders.In "The Science of Hitting," Williams explains his hitting technique.He divided the batting area of ​​the baseball field into 77 small grids, each grid is only as big as a baseball."Right now, when the ball lands in the 'best' square, swing the bat, and Williams knows it's going to make him hit .400; when the ball lands in the 'worst' square Inside, the low outer corner of the strike zone, he can only hit 230 with a swing."

Williams' attack strategy is obviously very appropriate if applied to investment.Buffett believes that investing is like facing a series of baseball bats. If you want to have better results, you must wait for the best opportunity for the investment target to arrive.

So, how can investors overcome this shortcoming?Buffett advises investors to imagine that they are holding a "lifetime investment decision card" that can only use 20 slots. It is stipulated that you can only make 20 investment decisions in your life, and this card will be cut off one slot after each swing. There are fewer and fewer investment opportunities left, so that you can carefully choose every investment opportunity and investment timing.Try not to swing on low, out-of-the-corner balls, and Williams is just willing to risk strikeouts and wait for the best RBI moment.Can investors take a cue from Williams' waiting for the best timing?"Unlike Williams, we don't get knocked out for giving up three balls that land outside the strike zone," Buffett said.

Even if there is any reliable news or speculative opportunities, you may not have the motivation to concentrate all your funds to take risks. Since you have no idea of ​​​​gambling or taking risks, you should wait patiently for the arrival of real opportunities.

Buffett said: "In my investment career, at least three times, I have seen too much money flowing in the market. It seems impossible to use this large amount of money to engage in reasonable activities. However, in four years Later, I saw 'the best investment opportunity of my life'."

One of them happened in 1969, when Buffett ended his first investment partnership business. This process is worth studying for Buffett fans, because for many Chinese Buffett fans, how to get the first pot of gold is very important. At present, Buffett's experience in managing tens of billions of dollars is not very meaningful to investors who want to get the first pot of gold.Then in 1998, when the company went awry, "an excellent investment opportunity" suddenly appeared in the investment world.

So, we have to wait and be patient for great investment opportunities.Just like the Chinese real estate investment opportunities that appeared in 1998, seizing such opportunities is the real investment.

Investment motto:

For investments that are unpredictable in the short term and have high rates of return in the long term, the safest investment strategy is: invest first and wait for opportunities before investing.What investors should remember is: participating in investment in a downward channel, the risk will be magnified many times invisibly, and the success rate will be greatly reduced. Please wait patiently for the arrival of major investment opportunities.If there are no good investment opportunities, we would rather choose to sit still.

(End of this chapter)