Warren Buffett compares buying stocks to being a farmer
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- เผยแพร่เมื่อ 27 ก.ย. 2024
- 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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With a good investment plan that ensures steady incomes without any doubts I am prepared for a well organized retirement. I got into the stock market 3 years ago and so far, I am making a good yield on my dividend.
Way to go man! If you don't mind, can you share how you're doing it?
It’s not rocket science. I got into the stock market and started investing in some stocks. Long story short, I blew my account and lost it all with one wrong move. a licensed fiduciary is the brain behind my success. I've gotten into a plethora of assets with $30k spread across stocks (options and futures) for the short term and Roth IRA, index funds, and ETFs, for the long term. Now with over 270k in roi, I sit back and just reinvest at intervals while I handle my other businesses.
Just clocked 52 some days ago I hope it's not too late for me to start investing. How can I connect with your advisor? It's just so much going on for me right now.
Sonya Lee Mitchell. Is my licenced coach i use just search the name you'd find necessary details to work with a correspondence to set up an appointment
Thank you for this tip. I mailed your her. Did my due diligence on him before we scheduled a chat. Also, brilliant resume I must say! I intend on getting started right away.
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
God bless this man, talking for 5 hours straight. I couldn't do that at age 30 let alone age 89
I feel like the farmer drinking and smoking pot is Jim Cramer
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
😂😂😂
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?
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.
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).
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
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
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.
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.
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.
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.
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
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
All the best to this greatest man.
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.
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.
this video is so comforting after my stocks go down.
Great way of explaining about the fluctuation in stock markets
"Smokes a little pot" 😂
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
Stock prices are NOT dictated on the company!!! They are dictated on the all the participants willing to buy or sell that stock!!!
A man without a land is a man without a Soul.
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!
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
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!
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*
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.
Warren dropping gems!!
One of the best investment advise I ever heard. Common sense is usually lost when investing.
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...
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.
Somebody get this man some water
Fabian Richburgh You must be new here!
He does not like water
Wd40 you mean?
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.
People living in nice farms are very lucky.
Im not about some places that arent equipment or good people. Im talking a nice farm.
That is exactly right.
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.
Straight after watching this Zack Guzman has an ad trying to tell me how I can make money from the markets.
One big difference between farming and buying stocks is that farmers produce valuable goods. Another is that they don't get rich.
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.
- Understand the value of your investment independent of daily price fluctuations (0:14)
- Remember that market prices are there to serve you, not to guide you (2:17)
- Maintain a long-term perspective and invest in a cross-section of America (4:37)
- Avoid psychological traps and leverage that could force you into unfavorable decisions (5:28)
- Focus on the potential yield and intrinsic value of investments, not on the erratic 'offers' from the market (5:45)
Won't be long now before this guy does buy the farm.
Great advice.
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
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.
Whatever he said was ... important and wise!
Having a farm and working right means you have EVERY year a harvest.
Stocks can harvest you.
A BIG difference
Which is why Warren's attitude to stocks is most important.
@@AuditorInvestor Some of his advices are for people that are allready rich.
When he makes 2% profit at something he could buy my house or the whole street.
I need 2% everyday.
To get rich maybe 20% everyday the next 20 years.
Can i buy one peso stocks in all Airline companies now ?
This man can feed America by himself for 20 years
Not that long, but not that wrong
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.
The guy next door is farming pot for TLRY
A rich man will buy anything you sell him, A broke man will believe anything you tell him.
Umm, buying stocks is like buying a house. Or marrying someone, or investing into a business...
At 89 He still drink Coke and in good condition, salute
Can i buy one dollar stocks in all Warren Buffett conglomerate companies ?
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.
Awesome lesson.
There! He said it: Stocks, Betting. 🤓
coca cola in a wine glass, what a boss
I looked at the thumbnail to watch this video and it looked like Warren Buffet was playing TAPS on a bugle for the economy.
Buffett is applying this to the airlines . He’s the farmer buying out your farm !
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
This analogy is brilliant
maybe smokes a bit of pot . lol
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
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
Wish I could buy a farm!
Mr. Buffett is maybe investing in Gold, Silver and Bitcoin. :-)
bruh without pot i couldn’t work 10-9 without stressing once i hit like 5 i’m chill but still working
That’s a Cherry Coke
Imagine you grow your crop on airplanes during the corona virus pandemic.
Farm A large farm produces corn
Farm B small high tech farm but growing steady produces rice and other products
Corn is the more popular product but is in a decline rice is growing to become the more popular overtime
See corn as ICE vehicles and rice as electric
Farm A GM (car manufacters)
Farm B Tesla
I rather have Farm B over a longer period of time as corn loses ppl interest over the long run and becouse Farm B focussed on other products aswell
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 -_-
Sounds like we should save. Wonder why nobody did for decades?
Thsnk you buffett
I have made a painting of this quote and framed it ....
160 acre farm that's kinda small hope your wrong on GE Buff!
Thank God for playback speed 1.25
Smokes a little pot improves efficiency
Buy oil! It’s low
Uncle buffet is cute
Buy high
Sell low
Repeat
Sounds good
@You Wish sell low
I am taking a chance on aurora cannabis
J B one day....
Personally, I wouldn’t. Good luck 👍🏻
A hundred per one means?
Is he talking about poor people who wanna be rich, or rich people who wanna be richer
He is talking about stupid people who invest in stocks.
5:00
My farm is F....
Poor Warren at his age, he should be at peace of mind and not have to worry about stocks
buy high sell blow
This is why I only panic buy
I'll buy when Warren sells off
Good idea. He is willing to make huge loss because the time it will take airlines to recover is too long to have billions just sat there. But people like us can buy cheap and sit on it
Mike Burton this. He doesn’t have a lot of time like we do. He thinks that there are more viable positions that will quickly bounce
I guess that makes me a broke farmer 😢
Has he reached his prime and long gone it is the prime ? He didnt invest into stock he doesnt understand yet ... all airlines stock ....
I've always been an advocate of the stock market because it has paid off handsomely since I decided to invest in it with Mr Conrad Parker the strategist.
Seems you knew him recently. He has been my manager for the past 2 years now. He has totally changed my financial status...i just sit at home and receive my sizable weekly profit
Jones, i would like to have him handle my trades, what are his terms, and how can i reach him?
Mr Conrad?he does a great deal for me as well.I don't lose funds in the stock market again since i started trading with him..he is undeniably a genius
@@morganrich5959 write to him at and get all the answers you need
Hmm i've been hearing a lot about Conrad Parker and am willing to invest
His time has passed. What Mr. Buffett does not realize is the American has changed. Its people have changed. Its politics have definitely changed. He is an old man and his philosophies do not gel completely (not fully) with America today. His time has passed.
Is he drinking Coke from a wine glass?
he is signaling that we should invest in Coca-Cola