The Daily Buffett

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The Timeless Horizon

October 30th

Do not take yearly results too seriously. Instead, focus on four or five-year averages.

Warren Buffett

Yearly results in the investment world can inspire dramatic shifts in strategy and stoke the flames of investor anxiety. The ebbs and flows of a single year are susceptible to market whims and are often distorted by short-term events. They can mislead. A wider lens – a span of four or five years – offers a more reliable reflection of a company's performance, smoothing out market fluctuations and cancelling out the anomalies of a single year.

This extended perspective is also a lesson in patience and discipline. It's about resisting knee-jerk reactions that every jolt in the market provokes and understanding that the path to true wealth is not paved with erratic leaps, but with consistent, measured strides.

The next time yearly results roll around, bearing their suite of surprises and shocks, let the numbers inform you, but not drive you. Steer your course by the star of four or five-year averages, and navigate the tumultuous seas of investment with a steady hand.

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