Learn to invest with Buffett

Chapter 79

Chapter 13 Section 5 Don't hesitate when it's time to take risks

Follow the risk, follow the risk, and your investment will be successful.

--Warren Buffett
Young Buffett, even when he was a student, understood his early stock market investing experience well.The lesson here is: don't be swayed by what people say, and don't tell other investors what you do.When you are very aware of your situation and the facts are very clear, do not hesitate to act, regardless of whether your actions are in line with the rules, and do not care whether others agree with you.

Buffett believes that indecision is related to the personality of investors, and this kind of investors is relatively poor in grasping opportunities.Opportunities are often lost due to slow decision-making, or repeated chasing ups and downs.Of course, taking risks should also be based on a full understanding of the facts.

There is a classic story about wealth growth in reality:

As a successful securities speculator, Horchha has never acted recklessly.Every decision he makes is based on the full grasp of first-hand information.He has a famous saying: Unless you know the inside story very well, don't buy anything that is on sale.And this wisdom came at a terrible price.

In 1916, Horchha, who had just entered the stock market, bought a large number of shares of Recar Steel Company with all his belongings. He originally hoped that the company would get out of the trough of operation. However, it turned out that he made an unforgivable mistake. .Horchha failed to notice that the company's massive accounts receivables were effectively dead, and its bank debt would take 30 years to pay off, even at the performance levels of the best steel companies.As a result, Recar Company went bankrupt soon, and Horchha went bankrupt because of this, so he had to start from scratch.

After this failure, Hoshiha kept this lesson in mind all his life. In the spring of 1929, on the eve of the world-famous stock market crash and economic crisis, when Horchha was about to buy a seat on the New York Stock Exchange for $50, he suddenly gave up the idea.Horchha recalled afterwards: "When you find that people all over the United States are talking about stocks, and even doctors are closed to speculate in stocks, you should realize that all this will not last long. So, I I sold all the stocks in August, and made a net profit of 8 million U.S. dollars." This wise decision saved Huo Shiha from the catastrophe.

Horchha's decisive success came from the project to develop the Atbasque uranium mine in Canada.Horchha felt from the evolution of the post-war world situation and the enormous power of atomic weapons that uranium would be the most important strategic resource on earth.So, from 1949 to 1954, he bought 470 square miles of land on Canada's Lake Addabasca, which he believed contained large deposits of uranium.With the support of Horchha, Art Basque became the first company to mine uranium with private funds.He then invited geologist Frank Jubin to serve as the mine's technical advisor.

Prior to this, the land had been explored by many geologists, and the results of the analysis showed that there was only a small amount of uranium here.However, Zhubin expressed doubts about this result.He confirmed that the land contained a large amount of uranium.He tried his best to persuade many companies to explore, but they were all rejected.After carefully listening to Zhu Bin's detailed report, Huo Xiha decided to take a risky investment. On April 1952, 4, Horchha invested $22 in exploration.On a Saturday morning in May, he got a report that 3 of the 5 samples contained very high-grade uranium.Zhu Bin exclaimed in surprise: "Huo Shiha is really lucky." Indeed, Huo Shiha got rich rewards from the Art Basque Uranium Mine Company. At the beginning of 78, the company's stock was less than 71 cents a share, but in May 1952, exactly three years after Jubin found the uranium mine, the stock of Art Basque Company had soared to 45 US dollars a share. It became the "magic dark horse" of the Montreal Stock Exchange in Canada at that time.And Horchha also became one of the richest people in the world because of the discovery of uranium mines.

Investment motto:

From this story, we can see that the growth of wealth depends to a large extent on taking risks, making continuous investments, increasing wealth, and grasping different opportunities at the same time.

(End of this chapter)