Warren Buffett: 12 Mistakes Every Investor Makes
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- เผยแพร่เมื่อ 5 พ.ค. 2024
- For my private stock portfolio & revealing insights into my investment strategy, head over to: / theswedishinvestor
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In this video, you’ll learn about 12 of the biggest mistakes that almost every investor makes, according to Warren Buffett. I’ll admit a few of my own investing sins along the way to be a good sport.
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The 12 mistakes:
00:00 Intro
00:21 1. Timing the Market
02:33 2. Getting Attached to Your Purchasing Price
04:33 3. Aggressive Growth Projections
06:09 4. Using a lot of Leverage
09:16 5. Missing the Forest for the Trees
11:30 6. Jumping Over 7-Foot Bars
12:57 7. Shrinking Your Universe of Opportunities
15:11 8. Staying Active all the Time
16:30 9. Diversifying too Much
18:18 10. Confirmation Bias
20:08 11. Following the Herd
22:22 12. Omissions
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My goal with this channel is to help you make more money and improve your personal finances. How to become a millionaire? There are many ways to get there - investing in the stock market, becoming a stock trader, doing real estate investing, or why not becoming an entrepreneur? But whether you are interested in how to invest in stocks or investing strategies for creating passive income with rental properties - I hope to be able to provide you with a solution (or at least an idea) here. Warren Buffett - the greatest investor of our time - says that you should fill your mind with competing ideas and then see what makes sense to you. This channel is about filling your mind with those ideas. And in the process - upgrading your money-making toolbox.
For my private stock portfolio & revealing insights into my investment strategy, head over to: www.patreon.com/TheSwedishInvestor
D: 42
I understand the reference and love you for it.
"If a company is good, sooner or later the share price will follow.” -Warren Buffett.
"Good Companies Don’t Always Make Good Investments." - History
@@muffemod E.g iPhone was a Nokia killer
@@muffemod Warren has been critical of some of Apple's investments/decisions. Going into the streaming business was one of those, saying there was too much competition there.
@@muffemod right, not always, but if you have 10 stocks and 3 of them go up 15x or 20x or 60x (Apple or Amazon), then the other 7 stocks can go to $0 (although unlikely), and then you still come out beating the S&P 500 big time
@@winterheat Yes, but that's easier* said then done. Why pick 10 stocks when you can just pick the best 1 stock? You would have to identify and invest in those companies that 15x, 20x, 60x, BEFORE they had those returns. Most professionals can't identify them (which leaves even less hope that you or I could either). This is why the case is made to hold all of them.
7 stocks going to $0 is actually very likely, seeing as the most common long term return for any individual stock is -100%. Only 19 of the top 100 companies that existed in 1900 are still around today.
The whole point of buying the S&P500 is that you own them all and you don't need to pick 10. You increase the reliability of your outcome as you increase the number of companies you diversify in. When you take a concentrated position you will either underperform or outperform the S&P500. Seeing as greater than 95% of actively managed funds who attempt to do this fail to beat the index you're better off not trying (see SPIVA report).
But then you even have to ask, why are you trying to beat the S&P500? Beating the S&P500 is not really a sensible investment goal. Saving up for a house, retirement, kid's college, etc are investment goals. What are you trying to achieve that can't already be done through investing in the S&P500?
Making money is an action. Keeping money is behavior. Growing money is knowledge....
Even with the current dip ín the market I'm still glad I can smile 😊 back at my portfolio of $12,500 built from my weekly trade.
And knowledge is freeeee
@@RalphBischoff how’d you do that? Who helps you? If so would you share name?
@@RalphBischoff I don't have telegram, I will download one and reach out to him, thanks
Very well said...wisdom in there.
I wasn't financial free until my 50’s and I’m still in my 50’s, bought my third house already, earn on a monthly through passive income, and got 4 out of 5 goals, just hope it encourages someone that it doesn’t matter if you don’t have any of them right now, you can start TODAY regardless your age INVEST and change your future! Investing in the financial market is a grand choice I made.
hi, im 16 years old and im wondering if you have any advice financially. I am looking to invest/ trade but im not sure what to do. any response would be greatly appreciated.
@@robbomaxtips from a 37year old:
- Make investing AND saving a habit.
- know the difference between long/short term capital gains, and portfolio/passive income. Invest accordingly.
- read rich dad poor dad
- be objective NOT emotional with your investments.
This is a great video, so much thought and effort has definitely been put to good use. 🎉
Thanks!!!!!🙏
To the point and detailed. I came here my mind telling "OK lets see what tip that i've heard many times in other videos are here" and i certainly learned some cool stuff. Will watch it again and again. New suscriber by the way
Thank you for your videos and helping me stay focused and grounded! Thank you
Larry, great content as always....thanks really appreciated. Followed the DWAC play been great. Watching from the UK.
high quality content plus its very easy to follow thank you.🙂
I appreciate your outstanding work.
Thanks for putting efforts summarising Buffet's greatest advise
I’m a noob who has been getting very excited getting started in investing right at the time nvidia was at $600 and watching this company shoot up in an unprecedented way. This video has been really insightful in that it shows how much more there is to learn and how easy it is to avoid the mistakes that others have made. Thank you!!
I used to call kids noob in AQW
good times
Great format and a very useful information. Thank you! :)
Here’s one: since most first time investors lose their shirt, wear your worst shirt the first time you invest (wear a shirt you don’t mind losing-and definitely don’t wear your best or only shirt). When I was talking to my wife about this, she said it reminded her of painting days. The first time our kids painted in school we sent them in in clothes they could get paint on. Something they could live without. The Mistake:
1. Wearing your best shirt (or only shirt) the first time you paint. (Wear something you can part with).
Very informative and entertains too keeping it interesting and lively. Thanks
Thanks man. My primary mistake is in the "due diligence" area, but maybe not the way most people think: I missed some intel on upcoming law suits for companies.If i caught those, i could have gotten a much better price or wouldn't have bought two companies altogether. Luckily, until i'm stupid enough to realize these losses, i'm probably good. So yeah, folks: Watch out for stuff beyond the financial fundamentals. It can save/make you some money...
The trick is if it a good company its a good company if you buy high thats fine just keep buying and the highs and lows will average out and if its a good company the average will ammount to increasing gains over a period. "Dont hold a stock for 10 minutes if your not willing to hold it for ten yrs"-Warren Buffet
yes but law suits can completely spank a company out of the market@@lets-have-a-conversation
Absolutely lovely round up of critical things.
I found this video absolutely informative , it answered ALL my questions 😀 thank you .
This is the best investing video i have found so far in the investing world
So enjoyable and instructive. Would love to hear your analysis on one of your 10 stocks. I like and try using the punching card analogy: only 10 goes at it and cannot take them back, ever.
"Real estate is the most tangible and time-tested asset class. It's not about timing the market; it's about time in the market." - Warren Buffett
Investing with Chinese characteristics 🙂
The trouble is that 1% of the people who think they have the proper knowledge to be picking stocks actually do. Just invest in a nice index fund early and often and enjoy the wealth that follows.
This. It's really that simple.
It’s very useful , thanks for sharing!
Excellent video. Out of the 12 takeaways, the Missing the Forest for the Trees is the key one for me. thanks for putting this video up @The Swedish Investor (aware you can't tag on TH-cam haha!).
Also the comment section is full of bots?!😭😭
Newbie here in stock market. Thanks for sharing your thoughts and experiences.
Your videos are fantastic. One might know these rules, but forget them when it's important.
So true. Emotion takes over
This is the best investing video I've ever seen...and I've watched a boat load of them! Very helpful. Thank you.
Agreed
I agree. Very nice presentation, clear and poignant language, Excellent work on reference to real world examples. Nice angle using W. Buffet clips to support the narrative. 👍
Agree
My strategy has always been to invest half of my income in the stock market at the beginning of each month. The second part of my strategy is not to sell for at least 5 years, but recently my portfolio has suffered major decline about $150k in losses. What can I do please?
Look for stocks that have paid steady, increasing dividends for years (or decades), and have not cut their dividends even during recessions. which may reduce your dividend gains or income, speaking to a certified market strategist can help with pointers
I've kept up with Warren Buffett since I was a kid so about 30 years
Thank you very much for your video and contribution to out knowledge library! El Greco.
The stockmarket is at near record levels - despite high interest rates and inflation. Buffett is hoarding over $150 Billion in cash (via Berkshire). You're telling me he's not trying to time the market? In the 1970s, Buffett sold everything and closed his investment partnership before the crash. Buffett also held onto a record amount of cash before the GFC and only invested during and after the crash in 2008/2009.
Best comment of the day.Warren Buffet is full of crap many times.
Watch what he does, not what he says
I believe the lesson to be learned is that while you can't time the market with pinpoint accuracy, you can realize when it's becoming too expensive.
That's why you should have a significative portion of your investing portifolio allocated to high liquidity bonds. For the sake of simplicity let's say 80% stocks and 20% bonds. When you're doing your 1k montly contribution, if the ratios are 15% 85% you will want to allocate more into the bonds than the stocks, so you will have money to when the market corrects.
Wonderful video! Extremely easy for a new comer to this area as well
Thank you for sharing this awesome documentary. =)
Enlightening as always. The Wise White Bear is back! 🥳
Thank god you do what you do.
Very informative and educative video ❤
Thanks Investor for this valuble and informative video about icon Warren Buffet it was full of wisdom and knowledge keep sending those gems to us
Fantastic presentation I mean video. Seriously this has got some excellent material, made super simple for the viewer. Great job!
You know it's quite a shame that an advanced man such as you doesn't have a substantial share in gold, it's a huge stab to your financial stability
man... just wanted to say, huge thanks for sharing the knowledge, and congrats on an AMAZING channel! Already recommending it to lots of friends! Really cool indeed, i mean it. Keep it up! Salute all the way from Brazil!
You know it's quite a shame that an advanced man such as you doesn't have a substantial share in gold, it's a huge stab to your financial stability
As usual! Great video!
One thing that's so distracting though is the sheer amount of snacks that show up when you cut over to warren buffett photos and videos. e.g., going from 1 -> 3 you see the table just slowly filling up with more and more snacks! Totally irrelevant to the video but I found it super amusing!
I hope I can really leverage these insights. Particularly #5 of seeing the forest.
“Amazon doesn’t give a damn about your purchasing price” made me lol! Just discovered your channel, awesome videos!
Props to this video for breaking down Warren Buffett's top investor mistakes. It's a reminder to stay focused on what matters: the individual businesses. Speaking of smart moves, My Digital Money is revolutionizing retirement planning with crypto IRAs.
Agree, time in the market is more important. those who waited to get in, will never get it
The hardest thing about evaluating companies is evaluating their management. Peter Lynch used to visit their home office. He would look at their board room and if it had a huge expensive table he would pass on the company.
He can dig deeper since he has a lot of money to offer. The business welcomes him in with a red carpet and calls him Sir Lynch and they give him a sheet of their business Plan.
We normal investors barely maek a dent in the company finances, in fact we're benefitting more than the company usually lol. so they cba telling us what colour their shite was this morning never mind any of their deeper business processes like manufacturing, couriers, accountancy,
Thank you for this important video.
Making money is not the same as keeping it there is a reason why investments aren't well taught in schools, the examples you gave are well stationed, the market crisis gave me my first millions, people shy away from hard times, I embrace them.. well at least my advisor does lol.
love your research chart !
great video, thanks so much
I've got to disagree with the 7 foot analogy and sometimes the aggressive growth projection. Sometimes you make big on these 2 stats .
What software do you use to makes the video can write and cartoon images. How do I get it ? Thank you so much.
Got this thing going on where I'm riding out the plummet of bed bath and beyond this past week, made some profit but lost most of it today... However, switching from short term to long term at a certain point seems like a better plan than just bailing out... If anything I might pick up some more while it's low before the seasonal change comes through.. maybe change the decimal placement even in return.. kinda the same way you would like an alert when you're interested in buying... Also, why even set an alert? Just fill the order
Muchas gracias excelente!!
My biggest mistake was not vetting who I was listening to. Warren has been the gold standard of advice.
Outstanding video. Thank you!
Great information. I like how you distil large amounts of data and present it in a storyline. What video editing software are you using to create the animations for your videos?
Videoscribe
Spot on. Strong story telling is powerful to deliver a message
Nice !!! Love your videos !!! Much love from Pakistan 🇵🇰
Simple dollar cost averaging is the best method ,this is best done with benchmarks .
So buying individual stocks is risky Buffet recommends the average investor to use low cost index funds .
An opinion on Elon Musk & Tesla. I’ve seen Charlie Munger talk about Musk and he said that he wouldn’t buy Tesla but he also wouldn’t short it. He added thoughtfully that he also believed you should, ‘Never underestimate the man who overestimates himself’ and that while (Charlie thinks) Elon Musk overestimates himself from time to time he may not be wrong. I saw a video with Jordan Peterson today saying that, it wasn’t obvious to him (to Peterson), that he was in a position to estimate Elon Musk. Smart people are very, very careful and very circumspect (rather than definitive and conclusive) about Musk and his ventures. It’s like playing a game of poker in which jokers and aces (and maybe kings) are wild. It’s not the kind of game Berkshire Hathaway would play precisely because they recognize that the outcome is unpredictable… but they are totally aware (or at least suspicious) that he may have an ace up his sleeve.
When it comes to Musk, the big problem is that he's a libertarian sociopath. That alone disqualifies him in my book.
My favourite channel on whole TH-cam
A few lessons can be learnt from this presentation. Later on, one would be wise and begin to rise economically and otherwise too!
Great video! Great format! Subbed
Interesting take on owning 6 companies. It is hard to argue against it when the guys is arguably rich because of these things.
I would like to see a bit more hard stats on this act of ommission. Act of omissions in this context are only so in hindsight and imply the abilitiy to predict the market price of a specific stock by at least more than average. Predicting the market over a 15-25yr time frame is not something that anyone should be encouraged to do as it a loser's game, and if they in fact have been able to do this, i'd like to know the parameters by which they go about doing that, and the reasoning of those parameters which makes it different than the other 99%(?) of people that have been unsuccessful.
Tack så mycket! Excellent advice☺️
So you are rightfully saying to set your goals and follow it by due diligence around your strategy?? Your thoughts
Great tips thanks
Fa-an vad schysst att få en sån här video levererad en lördagmorgon kl 8!! 😍😍
Hehe, hoppas du gillar den Gabriel!
I think that another big mistake is to assume that rules that works for a star (like Warren Buffet) will work for you as well. Everybody has individual set of skills, amount of time willing to spend and goal to achieve. And I would really argue with assumption that price relative to what was some time ago doesn't matter. Probably most of people on stock markets are buying what gets more expensive or trying to predict future price based on graph shape. There is also growing trend for High Frequency Trading (similar, but automatized). So maybe it wasn't like this before, but surely relative price matters in the short term. And honestly, if you are not so knowledgable about buisness but know some maths, maybe it's better to do what you can do? Especially that now we have computers, big data and trading APIs, assumption to divide by 3 instead of pi might be wrong nowadays as well.
They should choose strategy that they understand and mostly importantly "fit" with them.
I work a lot with stop losses and trailing stop losses these days, and in some of the examples the dudes and girls should have just taken profit. Here your entry point totally matter. I'm a bit impatient on the buy side but now I just use more alerts. The Walmart example is an opportunity cost, Buffet didn't like Bitcoin which is a much bigger opportunity cost.
In conclusion, great general advice to consider, but not the only rules to possibly play by. I pay a bit for a sophisticated Quant service and this helps me make decisions. Simple DCF value calculations for value investing just doesn't work in many industries.
Even if I would research a stock an entire day I doubt my outcomes would improve a lot, I rather overdiversify than sink 17% of my entire cash in just one stock.
Technical analysis is woodoo. Pseudoscientific nonsense. In the rare cases where it does seem to work it's actually the psychology of a 1000 other TA-freaks looking at the same graphs that unconsciously synchronize their actions and thus create short term ripples in the market. The market has no memory, you can learn exactly nothing from studying those graphs.
Gr8 video thank you.
Regarding "following the herd": Isn't it so, that the stock-market is the result of what the herd is doing and thinking? If no one believes in a very good company with great revenues and growth, the stock-price simply won't go up.
It only goes up, if the herd is buying the stock.
So, as investors we are dependent on the consensus of the herd. Only if the herd buys, the stock-prices will go up.
True. The theory says that the market is efficient and therefore the price accurately reflects the value of the asset. Back in the day an individual investor may have been able to spot something the market hadn't seen yet, but today assets are thoroughly analyzed by professionals and information flows freely. I'd say it's near impossible for an individual investor today to spot something of significance that hasn't been discovered by professionals already. And thus spending too much (or any) time analyzing assets is a waste of time.
he says they do not time the market but they are sitting on the most cash in their history. They know that bad times are coming. You may not be able to time it but you should know when not to invest!
Exactly
You know it's quite a shame that an advanced man such as you doesn't have a substantial share in gold, it's a huge stab to your financial stability
Very helpful
Ive made most of those and havent solved half of them. Ommision and holding onto a stock price are constant for me.
Here's a suggestion for No. 13: Throwing good money after bad money. In other words, investing more money into a failing investment to try and prove that you were right.
True, but that's kinda covered by the fact that your buying price is irrelevant. The market has no memory, the only relevant factor is future expectations.
Very nice video, thanks for the effort
Wonderful work
Warren preaches to everyone not to use leverage to invest yet Charlie Munger was well renowned in his early investing days of using massive leverage (aswell as most of his savings on a 'sure fire certainty)'! Warren has also recalled a time he invested with leveraged money to buy a share in his personal portfolio.
And then time passed and he wizened up.
what a sport thank you
Very interesting video. I’m new to this and wondering what your thoughts are with technological EFTs especially with the advancements in Ai?!
A million other new investors think like you right now. Thus, ai investment opportunities are in high demand. High demand means high prices. High prices mean low returns. That doesn't mean you shouldn't invest in ai, it'll probably be worth it over time, but expect volatility, especially when the hype wears off. Hype always wears off.
Wonderful video!
Can you make a video about something related to early teens on Investment? Cause I would really like to know and learn something before I get into the investment world
About the leverage part: its quite hilarious considering that Buffet used up to 1.6 leverage through insurance float as leverage to increase his gains most of the time. Which was a major part of how BRk managed to outperform the S&P 500 by 2x CAGR in the long run.
What do you mean
You know it's quite a shame that an advanced man such as you doesn't have a substantial share in gold, it's a huge stab to your financial stability
>
I really value the quality of your videos over the quantity of how many you produce. 1 video of excellent presentation, education, condensed wisdom, and aesthetic drawings that are easy to follow, beats 100 hours of low quality content.
Look forward to your next one, and thanks for the learning.
Long time subscriber
Wow, thank you Jai Geyer! I really appreciate your support!
true
Great video!
You have a great channel!
Instead of buying individual stocks, I'd just buy a low-cost S&P 500 index ETF. I can't pretend to be Warren or Charlie. In fact, Warren advised just doing that for the trustee of his will.
Spot on. That's the way to go for individual investors.
Awsome! Thanks
Financial peace isn't the acquisition of stuff. It's learning to live on less than you make, so you can give money back and have money to invest. You can't win until you do this. --Dave Ramsey
True.
Time is time la maestría es maestría acaso es alumno el alumno que pasó no por pasar o quien yebo el legado del profesor a otro nivel⚡
Buffet can also make deals very quickly because he has already evaluated nearly all the companies he would potentially be interested in buying, and already knows what he’d be willing to pay for them.
I can't tell if it's a mistake but I have a tendency to go after stocks with juicy eps,p/e,roa etc metrics and I switched to a "better" stock after I find one, the cost me a lot of brokerage fees and 2 stocks of what I dropped 5ot and b26 on sgx actually shot up after I sold them at a small gain
Cheers for sharing ValuableTips 🙌 Yea, sometimes the best thing one can do is to just sit and wait. I know it sounds boring, but consider what Buffett did with Geico. He discovered the company in ~1951, was in and out of it in a year or so. Then he waited about 25 years for his next chance to buy the stock at a really cheap price. That opportunity became a 1000-bagger for Buffett, $1,000 became $1,000,000. That's what patience can do!
@@TheSwedishInvestor hey how Warren Buffett make active income after 30 year is most important question ❓
Knowing when stocks are too expensive is easy. Holding cash while everyone is making money buying over priced stocks and waiting for a good price to buy in is hard. It is a lot easier to just hold and not sell though.
I rarely comment on youtube videos and don't even like or subscribe to most channels I watch, because youtube keeps recommending me good videos. but decide to do all that for your channel right now, for one single reason. the funny thing you did in your video.
3. aggressive growth projection, when you started drawing the line for tesla at the chart and went out of the chart to block to the page. that was a really fun but valid joke.
keep doing jokes like that in these types of information videos. bound to get more people like me to sub for you as well.
keep up the good work. bye
I was just starting out in investing when weed stocks were hot in Canada and I wound up listening to a coworker’s advice to buy into it because legal weed was only just getting started and it could only keep going up from here. Luckily I only put $200 in and today that investment is worth one dollar and forty-two cents. In some ways that was the best $200 I ever spent because I learned a very valuable lesson there, one I’ve not had to learn a second time.
TeXtMe DiReCtLy🤙🤙🥶🥶..
Great video
What is the name of the game displayed in time 14:43?
Very beautiful cartoons, it remains complicated the art of investing, he started at 11 years old, didn't know you could open an brokerage account ar that age...lol...
The company leverage The company strength is it weak in cap to run business or is it has more cap to run business. While you expect high return it is not the weak company in cash
Thanks alott lots of love from Nepal
Great work buddy
Thank you.... For help/guidance on creation/investment/financial portfolio.
Whats the 'circle of confidence' reference from?