The Daily Buffett

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The Long Game

September 5th

For the investor, a too-high purchase price for the stock of an excellent company can undo the effects of a subsequent decade of favorable business developments.

Warren Buffett

Investing is not a game of immediate gratification. Thoughtful choices that may not stir immediate excitement often hold the promise of significant long-term rewards. Overpaying for a stock, even one of a promising company, can significantly undercut returns, regardless of the company's future success.

A common pitfall in investing is the dangerous allure of short-term gains. The excitement surrounding a 'hot' stock or the promising future of a company can lead to decisions made with an eye towards quick profit. Yet, this pursuit can lead us astray, causing us to prioritize immediate success over long-term sustainability.

Conversely, the slow, steady progress of a well-thought-out investment may not garner much attention or excitement at first. However, as time passes, they yield consistent, reliable returns. These unassuming, often overlooked decisions form the foundation of a strong investment portfolio.

In the world of investing, discernment is key. The success of an investment is not merely recognizing a great company, but also buying it at the right price. Investing requires patience, the discipline to wait for the right price, even when faced with a seemingly perfect company. In investing, as in life, the quiet, consistent effort is often the most rewarding.

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