Quote of the Day by Warren Buffett: ‘People should want stock market to go down…’

Berkshire Hathaway founder and chairman, Warren Buffett has offered a wealth of investment advice over the years. Known for his long-term approach to stocks, sticking to fundamentals, and taking calculated but thoughtful risks, the so-called ‘Oracle of Omaha’s’ wisdom often makes the rounds online.

In the investment circles, Buffett and his long-time business partner and friend, the late Charlie Munger, are known for their no-nonsense approach to doing business and relatively frugal lifestyles when compared to their immense wealth.

“We are a net buyer of stocks over time. (It is) just like being a net buyer of food — I except to buy food for the rest of my life, and I hope that food goes down in price tomorrow,” he stated. Adding, “So, when stocks are down, we’re going to be buying on balance, and who wouldn’t rather buy at a lower price than a higher price?”

Buffett noted that discomfort with a falling market is purely psychological. “People are really strange on that (market drop). I mean, most people are savers, and that means they’ll be net buyers, and they should want the stock market to go down. They should want to buy at a lower price. They have that feeling that they just feel better when stocks are going up,” he observed.

It is an investment philosophy that Buffett has often repeated. In his annual letter to Berkshire Hathaway shareholders in 2016, the billionaire wrote that when dark clouds fill the economic skies, “they will briefly rain gold” and that “it’s imperative that we rush outdoors carrying washtubs, not teaspoons”. The point is that market downturns make otherwise expensive stocks more reachable and reasonably priced.

WATCH: Warren Buffett on why should want market drops

Notably, in January this year, Buffett handed over the reins and CEO position to successor Greg Abel. But his “bull run” with Berkshire has been legendary — gaining more than 55,00,000% returns over 60 years (1964-2024), to building the group to $1.2 trillion, and expanding Class A shares to worth $167 billion.

Known as the ‘Oracle of Omaha’ for his uncanny prediction on stocks, Buffett gained fame and investor confidence for handpicking companies (Apple, Bank of America, Coca-Cola, etc.) that exploded and now account for 70% of Berkshire’s $263 billion stock portfolio. He termed this as “one wonderful business can offset the many mediocre decisions that are inevitable”.

Buffett’s net worth is estimated at $152 billion, making him the 10th richest person in the world, according to the Bloomberg Billionaire Index.

Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.