The Daily Buffett

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The Art of Waiting

August 5th

The stock market is a no-called-strike game. You don't have to swing at everything -- you can wait for your pitch.

Warren Buffett

Patience is a defining virtue in both baseball and investing. It is not always the most active player or investor who reaps the greatest rewards, but often the one who waits for the right moment to act. The market, unlike baseball, doesn't punish us for passivity; we aren't required to act on every potential investment.

This is a lesson in risk management. Just as an overeager swing can lead to a miss in baseball, an impulsive investment can turn into a financial setback. To prosper in the long run, we need to be selective and resist the urge to act purely out of fear of missing out.

Opportunity cost plays a major role here. By not acting on an investment opportunity, we give up its potential return. Yet, waiting for a more suitable, 'better pitch' could yield greater benefits in the long run.

Instead of rushing to make our mark, let's take a step back, assess the field, and make the swings that count. After all, in the patient and cautious approach, lies the winning strategy.

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Copyright © 2023 by Scott Sansovich