Year 2000 is approaching: at 70 years old Buffett was considered obsolete and old. His time over, his gold touch gone in the face of the new tech wave of companies which prices had sky-rocketed as much as their popularity. Berkshire had not a single tech stock in portfolio.The price of BRK at his lowest. Recent investments? 22Billion, a huge sum, for General RE seemed from its start to be disappointing. Shareholders were discomforted to say the least and already urged him to do something, to follow the crowd in the tech field or go more international.
So, we are back in 2020, two decades later. Having polished my rear-mirror when I meet people and they tell me that they are buying the stocks of the moment, the “hot ones”, those that are popular..I’m glad I’m not. Conversely I’m happy if a price of an unpopular stock makes sense to me and only to my reasoning. I feel I’m on the right path even though many people can think I’m “out of touch” and old-fashioned or something of the sort. Not only I don’t care but I’m happy. The biggest mistake you can make in stocks is to buy at a high price something everybody is buying and because everybody is buying it. There are in 2020 compared to 1999 tech companies that really have value and are wonderful businesses. However, I still think, like Sir John, that we must look for bargains, and/or for wonderful companies but at least at “reasonable prices”.
“You’re not right or wrong because a thousand people agree with you or because a thousand people disagree with you. You’re right because your facts and reasoning are right” . And you have to base your facts and reasoning upon the fundamental qualities and numbers of a business. To do so learn from the best teachers, be a constant learning machine and analyse as many companies and reports you can absorb. Then build your own castle of investing. I bet you will be a lot happier in the process than following the crowd, and a lot richer too.