Lets start by getting something straight The reason Ive been ableto make a

Lets start by getting something straight the reason

This preview shows page 7 - 10 out of 263 pages.

Let’s start by getting something straight: The reason I’ve been able to make a whole pile of money starting with nothing is that my approach is the same one that’s been making people rich in all kinds of markets for the last hundred years. Because I learned the fundamentals of solid investing, I’ve survived all the crazy market swings, including the recent one that began in 2008. In fact, on August 17, 2007, I appeared on CNBC and told you point-blank to get out of the stock market the next day … and I was right. On March 9, 2009,
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the Dow fell below 6,600 and I sent an email that evening to Maria Bartiromo at CNBC, Manny Schiffres at Kiplinger, and to my blog followers that said it was time to load up the truck. Right again. We’ll pull out of this economic crisis eventually no matter how badly we handle it, because eventually we always get back to the basics of a society that creates the most wealth for the most people. We’re experiencing the down part of a cycle. Government got too loose with credit and too proactive toward people with bad credit, people got to thinking real estate can’t go down, bankers got too clever with derivatives and leverage worldwide, and, in a nutshell, we were on a binge for twenty years. We overinflated. Now we’re going to contract the economic balloon. We’ve been through it before and some of us always think there is no tomorrow. Warren Buffett described it as “an economic Pearl Harbor” and suggested we do what we did then— everything possible. And we will. But we’re at war economically, and the impact of government meddling in the markets is going to be painful for a lot of people. What I want to do is make sure you’re not one of them. Investors who take the correct action now will come out the other side in ten or twenty years really, really rich. Making that happen for yourself starts with knowing the rules. Every successful investor I know—whether an active trader or a long-term investor—follows the same two rules of investing: Rule #1: Don’t lose money. And Rule #2: Don’t forget Rule #1. My first book, Rule #1 , appeared in the #1 position on the New York Times bestseller list and has been translated into fourteen languages. Folks like investing guru Jim Cramer and SEC Chairman Arthur Levitt were nice enough to recommend it. In that book, I provided a straightforward explanation of how good investors use specific fundamentals to find the value of a business. I also presented a few technical tools investors can use to avoid losing money, and in doing so, make millions … and in some cases, billions. There is, however, work involved. Being an active investor is a discipline that, like dieting or getting into good physical shape, has a huge payoff but does require effort and steadfast dedication. You wouldn’t believe the number of people who read about dieting or working out or investing but don’t actually do it. Okay, you would
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believe it.
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  • Spring '20
  • Warren Buffett

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