| Advice from the Oracle of Omaha |
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The "Oracle of Omaha" is Warren Buffett. Over the weekend Mr. Buffett released his annual letter to shareholders of Berkshire Hathaway. Contained in the letter is sage advice that every investor can take to heart. Below are a few quips from his 19 page letter:
About Investing during Times of Uncertainty
"We've put a lot of money to work during the chaos of the last two years. It's been an ideal period for investors: A climate of fear is their best friend. Those who invest only when commentators are upbeat end up paying a heavy price for meaningless reassurance. In the end what counts in investing is what you pay for a business - through the purchase of a small piece of stock - and what the business earns in the succeeding decade
or two." Bottomline*: Stick to a sound investment discipline despite the uncertainty.
About a Cash Cushion
"We will never be dependent on the kindness of strangers. We will always arrange our affairs so that any requirements for cash we may conceivably have will be dwarfed by our own liquidity." Bottomline*: Everybody needs a reserve cash cushion. Make sure yours is the right size.
About Advisors
"Don't ask the barber whether you need a haircut." Bottomline*: Is your investment advisor a salesbroker or a fiduciary? If you do not know, you may get a haircut you do not want!
*Bottomline is Denver Money Manager's editorial interpretation of Mr. Buffett''s comments and not direct quotes from the letter. |
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