- Warren Buffett described fear and greed as diseases that infect investors in a shareholder letter in 1986.
- “We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful,” the billionaire investor said.
- Google searches and tweets about Buffett’s famous quote are spiking as coronavirus ravages stock markets and investors try to hold their nerve.
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Warren Buffett once described fear and greed as diseases that infect investors. As the novel coronavirus rampages across the world and ravages stock markets, investors are quoting the billionaire investor as they try to hold their nerve.
“Occasional outbreaks of those two super-contagious diseases, fear and greed, will forever occur in the investment community,” the Berkshire Hathaway CEO wrote in his 1986 letter to shareholders.
“The timing of these epidemics will be unpredictable,” he continued. “And the market aberrations produced by them will be equally unpredictable, both as to duration and degree.”
“Therefore, we never try to anticipate the arrival or departure of either disease,” Buffett added. “Our goal is more modest: We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.”
Buffett doubled down on his stance in a recent CNBC interview, arguing long-term investors should be thrilled by the current selloff as it presents an opportunity to buy shares in quality businesses at a discount.
“That’s good for us actually, we’re a net buyer of stocks over time,” he commented on share prices dropping.
Google searches for a shorter version of Buffett’s famous quote, and tweets containing the quote, have surged in the past few weeks (scroll down for examples). Investors are probably searching for and sharing the quote to steel themselves against the coronavirus threat, and encourage others not to succumb to fear and sell their holdings.
Given stock markets around the world are nosediving, it appears most investors aren’t taking Buffett’s advice.