Warren Buffett compares buying stocks to being a farmer
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- เผยแพร่เมื่อ 3 พ.ค. 2020
- Buying a farm and investing in the stock market may not be that different after all.
The legendary investor Warren Buffett - dubbed the Oracle of Omaha - made the analogy during Berkshire Hathaway’s annual shareholder meeting explaining the advantage of stocks.
“Imagine for a moment that you decided to invest money now and you bought a farm,” said Buffett, the chairman and CEO Berkshire Hathaway. “Let's say you bought 160 acres...and the farmer next to you had 160 identical acres, same contour, same soil quality.”
Now, imagine that the farmer who has the same farm as yours makes you an offer every day to either sell his farm to you or buy yours, he continued.
“That's a very obliging neighbor,” Buffett said.
This pricing advantage is something you don’t get with farms, but you get with stocks, according to Buffett.
Buying stocks - like buying a farm - means you’re buying into a business. But with stocks, you have an added advantage of having that neighbor - or other investors - giving you a price for your farm every day.
“The only thing you have to do is remember that this guy next door is there to serve you and not to instruct you,” Buffett said. “You bought the farm because you thought the farm had the potential. You don’t need a quote on it.”
‘Stocks have an enormous advantage’
Many people may see a disadvantage in being constantly offered a price for your stock - or a farm - and many people may profit from telling you they can predict what the farmer will offer tomorrow or next week.
But you don’t have to listen to them, Buffett said, especially now.
If you owned a business that you liked before the coronavirus pandemic, nobody's forcing you to sell even with changing prices.
“If you really like the business and you like the management, and the business hasn't fundamentally changed,” Buffett said, “the stocks have an enormous advantage. You still can bet on America.”
The American tale, as Buffett calls it, may have interruptions, many of which you're not going to foresee.
So if you had that farm, and your neighbor offered you $2,000 an acre on Monday, $1,200 an acre the next day, and maybe then $800 an acre the day after, that shouldn’t change your evaluation of the farm’s potential.
“Are you going to let this guy drive you into thinking: ‘I better sell because this number keeps coming in lower all the time?’” he said.
Bringing the right psychological approach to owning common stocks is important: Betting on that farm may be better than listening to the neighboring farmer.
“If you bet on America and sustain that position for decades, you’re going to do far better than owning Treasury securities,” Buffett said, “or far better than following people who tell you what the farmer is going to yell out next.”
Denitsa is a reporter for Yahoo Finance and Cashay, a new personal finance website. Follow her on Twitter @denitsa_tsekova.
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God bless this man, talking for 5 hours straight. I couldn't do that at age 30 let alone age 89
People would do so much better at investing if they viewed stocks as pieces of businesses and not just things that randomly go up and down
I think this is why he became a billioner and the gamblers failed.
@You Wish losing how? In 10 years he amazed 100 Billions in Cash. How, when he is worth 80+ Billions, such an ignorant and uneducated respose
@You Wish to that sir I will say..........You wished
@You Wish He lost nothing. They lost valuation, not profit. In fact their profit went up this quarter, and they still have a massive cash reserve.
The Investor Center - Learn Finance & Investing imaging regurgitating a quote from WB to make yourself sound smart
I feel like the farmer drinking and smoking pot is Jim Cramer
Is that a wine glass full of cherry coke? I want to do this next time I am in a high end restaurant .
He owns coca cola
Respect
Listening to Warren Buffet talk made me clear my throat at least 4 times to make sure I'm ok.
Try listening to JPow lmao
The irony of the ending is hilarious.
Warren: "There's huge amounts of money that people pay for advice that they really don't need."
YF: "Hey investors! Zach Guzman here. Are you interested in learning more about the markets and getting the latest financial news? Well, then click right here to subscribe to our Yahoo Finance TH-cam channel. Get the latest up to the minute market analysis, big interviews in the world of finance, and information on how to manage your money, everyday, wherever you are."
i know i laughed out loud
Yea haha sign up to Yahoo finance so we can yell some prices at you 😂
Super Alpaca gotta buy businesses that make a lot of money and retain it, good management to allocate capital where it is best placed, a competitive advantage, and little debt. The way warren does it now is that he goes for great companies even if he pays too much
CRINGE
😂😂😂
Buffett is a great teacher and story teller. His advice is so priceless as always. A farmer will do much better by cultivating and tending his farm than bothering about the price of his farm on daily, weekly and monthly basis.
This man sees opportunities like a farmer smells rain. His analogies are top notch and his views has helped shaped I and my financial advisor on making the best trade decisions.
No doubt he is one of the best investors of the 21st century. I am also glad you mentioned that you had a financial advisor, so many people ignore them till they have lost so much money trading alone.
That's right, when I began investing, I started with the guide of a financial advisor and the process was a lot simpler and less unpleasant than I envisioned, within a time frame of 2 years, I made enough profits to own rental units in California and at least $250,000 on a month to month basis, all from an underlying investment of $100,000.
Cool profit, thanks for sharing
That’s really awesome, please who assisted you and how can I reach this financial adviser?
Legend - the grandpa everyone wishes they had 😢
james Lamb The ONLY responsible comment on this thread. Thank you!
Lamb 🐑 to the slaughter 😂😃😁
Mine was great as he was thanks (the other one, meh).
This is probably one of the most important videos for a stock owner to watch.
I have learned that,the voice of experience, is a very valuable friend indeed! Blessings.
Experience can blind just as it can teach
@@Danny2k38 You are quite right. As with all things in life,the ultimate value of any information, is the integrity of it's source! Blessings to you.
That's not Coke, its the blood of young investors. That's the reason he is still alive.
I bet you're a young, impatient and jealous person who is most probably a hypochondriac.
Shame on you
kid
Stop drink coke
Great way of explaining about the fluctuation in stock markets
Buy low, grow your money, bet on America, never bet against America, buy a cross-section of America, America has always prevailed, if you buy stocks you're gonna do better than buying treasuries, lots of people pay for advice they don't need...
Meanwhile, the hedge fund manager makes $1 Billion/year betting against America, and betting you and your company will need bankruptcy welfare, China's looking elsewhere for what they used to buy from you. Your supplier costs are about to skyrocket. Your 401(k) has already been robbed, and right before it's time to pay you those false profits they've been telling you you had, there will be another crash.
"America has always prevailed". America's empire is but just a blip on the timeline of human history. Great empires have prevailed for CENTURIES that ultimately collapsed. People need to remember that America isn't untouchable, it's just the top dog at this very moment in time.
@goodfella21f ok, boomer
So many people in this comment section advising Warren Buffet. Now that shows how delusional people can get. When you give advice to someone who is exponentially more advanced than you.
@You Wish Did he really?
@You Wish and is still left with more crop than 99.99
@You Wishthat's why he has many farms
Stop putting this old guy on a pedastal. Yes, we made his money earlier on; however, lets not ignore the fact that hes pretty much outdated. You do know that that he never bought into tech companies early on because he never believed in them, right? He jumped in very late. Look at them now.
@@TonyMontana-gr4rm He's smart, unlike broke morons like you. He doesn't invest in sh*t he doesn't understand. Took him a bit to get an understanding of the tech industry but still made a heck lot of $ from apple.
Such wise words. I recently picked up & read The Intelligent Investor because Buffett recommended it so highly. Bottom line is “don’t leverage too highly and buy based on book value (net tangible assets etc) not market value”.
All the best to this greatest man.
this man is 89 years old..
Money keeps people alive.
Itesh Nand tell that to Steve Jobs
WARREN: "It's simple bro." REALITY: building full of PhD level specialists in quantum computing, physics, pure math, statistics, condensed matter, biology, game theory, computer sciences. WARREN: "Just be a farmer bro."
You talk about Jim Simmons? If yes he makes way better results than Buffett.
@@BreatheThePressure Jim Simons is a beast! But I meant to underscore the fact that Berkshire Hathaway hires from the best in many disciplines. There are no "farmers" walking around with a wheat straw in their mouth
Buffett is playing a different game than the quants. They're trying to figure out the price of a stock for the next few months. Buffett is trying to figure out the value of a business for the next 40 years.
@@BreatheThePressure He has way lesser AUM, different game.
Warren is really someone ive been looking up to, it's pretty sad to see him and his voice getting old
he has always been old
Thats life comes to us all its what you do with the time you are given that counts , i bet he mostly satisfied with the life he has had .
He was born as an old man.
Greetings from Kenya Uncle Warren!
You my friend gave me the biggest secret of all... COMPOUNDING!
Now I teach it to my nephews and nieces from all around the world!
"Smokes a little pot" 😂
this video is so comforting after my stocks go down.
6:45 There's huge amounts of money that people pay for advice they really don't need.
WOW!
Very Good to write the subtitle in description. Great job Yahoo Finance. I understand more in reading than listening. My english listening is so poor.
The legendary investor Warren Buffett
Read “Security Analysis” by Graham Dodd’s. It’s the book that Buffet and many other legendary investors base their strategies on.
Ben Graham no?
Benjamin Graham*
Great advice!
Amazing stock for medium/long term Draftkings! Has already shown great improvement since it was finally a public made stock. Keep in mind this is with no sports even going on right now!! I can easily see this stock being worth 500% within a few years.
Can i buy one peso stocks in all Airline companies now ?
Can i buy one dollar stocks in all Warren Buffett conglomerate companies ?
The "farmer next door" is Buffett's version of Ben Graham's "Mr. Market" that Graham writes about in The Intelligent Investor, which I expect was Buffett's inspiration. Most people should just buy into a mutual fund, but otherwise the best investment advice comes from the most successful investors, and that would be Buffett.
Awesome lesson.
Warren dropping gems!!
Straight after watching this Zack Guzman has an ad trying to tell me how I can make money from the markets.
Thanks for all the advice Buffett! U inspired me to invest in stocks now you are inspiring me to create my TH-cam channel so i can earn some passive income!
Won't be long now before this guy does buy the farm.
Great advice.
Buffet: invest in index, ignore the noise. Buy and hold. No one can predict the future.
Everyone else: HE KNOWS THE FUTURE, JUST DO WHAT HE DOES.
Stock prices are NOT dictated on the company!!! They are dictated on the all the participants willing to buy or sell that stock!!!
I looked at the thumbnail to watch this video and it looked like Warren Buffet was playing TAPS on a bugle for the economy.
Do you all not realize that his fund has shareholders and Airlines no longer meet his funds criteria, hence the selloff!?
So he is saying the movie ”Being There” is really the way our leaders think
He's saying a content farmer who isn't interrupted by influences is needed.
instablaster...
Amazing
All I could think about was that I really want a Coke.
That's what he wants you to think. Clearly they are sponsored by coke.
@@skatei Buffett owns a big chunk of the coca-cola company
Buy form , 1000 acres, will be good a investment.
var1328 you obviously caught the AI issue!
@var1328 form is the youtube version of farm, for novice .
@@colinhuang2325 RE is real money rest all mind game.
This guy is now 90, and has no plan to retire,! Amazing!
That is exactly right.
CNBC news said Mr Warren sold the airline stocks today , I wish it is be nice next time when you plan to sell IBM stocks again please let us know instead only IBM CEO. thanks Mr Warren
This analogy is brilliant
One of the best investment advise I ever heard. Common sense is usually lost when investing.
that dude at the end is creept af.
+
Haahhahaha yaaaaahh
His voice
I looked at the thumbnail to watch this video and it looked like Warren Buffet was playing TAPS on a bugle for the economy.
The guy next door is farming pot for TLRY
I have made a painting of this quote and framed it ....
What he is saying is don’t panic sell!
That's why he sold all his airplanes? At least he waited for the 'Dead Cat Bounce'.
@@mikep4869 There's a difference between panic selling, and staying in just to prove a point.
@@JohnnyFive done both lol
@@mikep4869 not a panic sell he just dosent like the long and short term outlook for airlines
Didnt he just panic sell ?
Whatever he said was ... important and wise!
bruh without pot i couldn’t work 10-9 without stressing once i hit like 5 i’m chill but still working
Old thinking for a time when the market reflected the real economy, with Fed stimulus propping it up now, what do you base your investing on? The market keeps going up in the face of so much bad news. What could possibly be worse to make the market go back down?
lmankj wait till the dolor will crash 😂😀
I can’t stop watching the ending over and over again, I can’t breath 😂😂😂😂😂😂😂
Hey Investors! Zack Guzman here! 😂🤣😂🤣😂🤣
i smoke a little pot, mr. buffett. it's not the end of the world. thank you for your time. i have learned a lot from you. warm regards.
Wish I could buy a farm!
Just like farms if stocks are used and never maintained they eventually erode and become worthless... businesses become obsolete and worthless as well.. the stock market goes up because the dollar is losing its spending power ... if you want to maintain the stock market is great if you wanna get ahead in my opinion it’s not that great
This dude picks stocks for companies that are too big to fail. He doesn't take risks . Highly regulated government subsidized corporations is low risk , high reward
A hundred per one means?
Umm, buying stocks is like buying a house. Or marrying someone, or investing into a business...
I like it
Buffett is applying this to the airlines . He’s the farmer buying out your farm !
No. Being an investor is actually like being a miner. The first one to dig the mine reap the most rewards, but more risky because of unstable tunnels. When the mine has been depleted, you move on to the next mine. But sometimes, there are undiscovered tunnels and caves in that mine that the first miners missed, that way newer generation of miners can have a clear pathway and know what to expect with less risk.
A man without a land is a man without a Soul.
maybe smokes a bit of pot . lol
Damn, this guy is really old now.
His diet getting to him now
90
his health is deteriorating.
Pretty Sharpe in any case.
@Super Alpaca He can't risk it.
coca cola in a wine glass, what a boss
Thsnk you buffett
first you need to know what the farm will produce and expected earning in average over x-years. Then you have to estimate the fairvalue for the farm. And when Mr. Marked offer you are ridiculus high price you should sell your farm, and when Mr. Marked want to sell HIS farm to a ridiculus low price you should buy his farm.
There! He said it: Stocks, Betting. 🤓
He is not dying.
Somebody get this man some water
Fabian Richburgh You must be new here!
He does not like water
Wd40 you mean?
Exactly. It doesn't matter if the prices skyrocket. It doesn't matter if they go down. Coronavirus is not really important. Just keep those positions, think long term and let the compound interest do its magic.
160 acre farm that's kinda small hope your wrong on GE Buff!
Does Betting on America mean Buying and ETF lets say The S&P 500 (SPY)?
Yes. Or a mutual fund that tracks the S&P.
Sounds like Warren needs to drink some water instead of that Coca-Cola.
M S Drinking Coke at his age has more fun
Do you have a problem with America?
@@roberttylr Do you have any problems with an intelligent america
@@worldshaper1723 It was a joke, furthermore, I'm not 'murican. ;)
He puts a drink of cola for advertising, mfcker has so many shares in coke
I'm almost 15, what would you advice your fifteen year old self on Trading or investing and entrepreneurship and school
dividend growth stocks. With age on your side, compound interest is your friend.
Based on his logic, he should keep his airline stock unless he see something fundamentally change, and seems he see that and get out of it.
How long is it going to take for the airline stock to recover?
How long does Warren Buffet have left on earth?
@@jaykiriona few years, 2-3 years.
Jharaiz HAHA THIS MADE ME LAUGH
@@bennguyen2974 :P Don't mean to be harsh but the guy is old -_-
2020 and some guy no one knows tells us to go listen to him talk about stocks instead of listening to warren buffet 😂
Hum, Why did he sell dal, pg, oxy, jnj. Buy hold and pray doesn’t work.
People living in nice farms are very lucky.
Im not about some places that arent equipment or good people. Im talking a nice farm.
✅✅✅
Diamond hands expert
I keep looking at that delicious coca cola
"Smokes a little Pot"
Imagine you grow your crop on airplanes during the corona virus pandemic.
I got afraid when I see Warren , because I don't understand what is the use of having such a enormous amount of money at this age.
He just said , people you don't need and then this guy pops up with " do you need anything ?"...
Honestly think this pandemic seriously jeopardized his health. The anxiety part
Agreed, I can't imagine the stress having billions n billions in the market when the virus hit
He might be losing in some areas but he is gaining in other areas. Average minds think crisis and failure, great minds turn crisis into opportunities.
I am taking a chance on aurora cannabis
J B one day....
Personally, I wouldn’t. Good luck 👍🏻
Solar panel and wind farm.
I came here for the ASMR
Smokes a little pot improves efficiency
Speed at 1.25x
Buy Mindanao Visayas talent stocks !
Buy Spy monthly and hold until you retire !
That’s exactly what I’ve been doing!
One stock (Spy) per month is enough?
@@fantasygamerful realistically yes