Comments on: Is Buffet’s Investing Rule Practical? http://www.thickenmywallet.com/blog/wp/2008/02/06/is-buffets-investing-rule-practical/ Everything to do with thickening your wallet Wed, 01 Feb 2012 15:44:00 +0000 hourly 1 http://wordpress.org/?v=3.3 By: Riscario Insider http://www.thickenmywallet.com/blog/wp/2008/02/06/is-buffets-investing-rule-practical/comment-page-1/#comment-7265 Riscario Insider Wed, 20 Feb 2008 04:47:48 +0000 http://www.thickenmywallet.com/blog/wp/2008/02/06/is-buffets-investing-rule-practical/#comment-7265 Simple all-encompassing quotes are easy to misinterpret. The statement "the customer is always right" comes to mind since no one is infallible. Risk accompanies reward. If you cannot lose, there would not be much to gain. Perhaps Buffett has a timeframe in mind (forever, as mariam suggests). As TMW notes, investing only what we can afford to lose is more practical for the nonbillionaires among us. Simple all-encompassing quotes are easy to misinterpret. The statement “the customer is always right” comes to mind since no one is infallible.

Risk accompanies reward. If you cannot lose, there would not be much to gain. Perhaps Buffett has a timeframe in mind (forever, as mariam suggests).

As TMW notes, investing only what we can afford to lose is more practical for the nonbillionaires among us.

]]> By: mariam http://www.thickenmywallet.com/blog/wp/2008/02/06/is-buffets-investing-rule-practical/comment-page-1/#comment-6652 mariam Thu, 07 Feb 2008 02:57:16 +0000 http://www.thickenmywallet.com/blog/wp/2008/02/06/is-buffets-investing-rule-practical/#comment-6652 I'm not sure if Buffett's rule is practical if you don't follow it up with buy and hold forever. How does one break rule #1 if you never sell and it's only a loss on paper? Even though I'm a Buffett fangirl, I have a problem with no exit strategy. What good is a bunch of stock certificates if you just use them as wall paper? I’m not sure if Buffett’s rule is practical if you don’t follow it up with buy and hold forever. How does one break rule #1 if you never sell and it’s only a loss on paper?

Even though I’m a Buffett fangirl, I have a problem with no exit strategy. What good is a bunch of stock certificates if you just use them as wall paper?

]]> By: Silicon Prairie http://www.thickenmywallet.com/blog/wp/2008/02/06/is-buffets-investing-rule-practical/comment-page-1/#comment-6632 Silicon Prairie Wed, 06 Feb 2008 19:19:51 +0000 http://www.thickenmywallet.com/blog/wp/2008/02/06/is-buffets-investing-rule-practical/#comment-6632 No one can expect to make investments that will never go down (unless they're being extremely conservative). But there is a difference between investing in an index fund and investing in a growth company that hasn't found a business model yet in an industry going through a bubble. With this quote being used so often with no context, I have to wonder if that's what Buffet really meant - many good investments can lose a few percent before reverting to the mean, but if you're in something that has a chance of losing 95% of its value it will take years of good fortune just to make up for one bad event (and that just gets you back where you started while more cautious investors continue to make money). No one can expect to make investments that will never go down (unless they’re being extremely conservative). But there is a difference between investing in an index fund and investing in a growth company that hasn’t found a business model yet in an industry going through a bubble.

With this quote being used so often with no context, I have to wonder if that’s what Buffet really meant – many good investments can lose a few percent before reverting to the mean, but if you’re in something that has a chance of losing 95% of its value it will take years of good fortune just to make up for one bad event (and that just gets you back where you started while more cautious investors continue to make money).

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