A rebound is in sight for stocks, following a rotten week — the worst since December for the S&P 500 SPX and the Nasdaq Composite COMP.
The month of February is also looking like a loser, despite a promising start to the year. That’s as strong data and sticky-high inflation are causing rethinks over how high the Fed will go on rate hikes.
And as Wall Street analysts go dark, with talk of investor death zones at Morgan Stanley, some droplets of wisdom by one of the world’s most followed investors, may have arrived in the nick of time.
In Warren Buffett’s annual letter — apparently one of his shortest ever at 4,455 words — to Berkshire Hathaway BRK BRK shareholders, he throws a bone to us mere mortals by dedicating some airtime to what he hasn’t gotten right.
“In 58 years of Berkshire management, most of my capital-allocation decisions have been no better than so-so. In some cases, also, bad moves by me have been rescued by very large doses of luck. (Remember our escapes from near-disasters at USAir and Salomon? I certainly do.),” Buffett said.
Buffett then waded into the merits of long-term investing and the “secret sauce” that has made the conglomerate pretty good at what they do. He discussed Coca-Cola KO, one of his longtime holds, noting that Berkshire completed a seven-year purchase of those 400 million shares in August 1994.
“The lesson for investors: The weeds wither away in significance as the flowers bloom. Over time, it takes just a few winners to work wonders. And, yes, it helps to start early and live into your 90s as well,” said Buffett.
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FoundingFrog
Article URL : https://www.marketwatch.com/story/this-is-what-warren-buffett-a-self-described-so-so-investor-says-is-his-secret-sauce-f90b41e