The Daily Buffett

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Fortifying for the Tide

November 29th

Only when the tide goes out do you discover who's been swimming naked.

Warren Buffett

In periods of economic prosperity, it's easy for businesses and investors alike to appear successful. Yet, the real test of durability and sound strategy comes when the economy contracts. Those who built their success on solid foundations remain resilient, while those who were merely riding the wave of economic expansion are exposed for their lack of preparation.

This sage advice holds true for individual investors as well. Are you relying solely on a bullish market for growth? Or have you built a diverse portfolio, fortified by knowledge and prudent risk management?

The discomfort of facing this potential exposure to economic downturns is a necessary reality. The prospect prompts a reassessment of strategies, encouraging a critical look at the strengths and vulnerabilities of one's investments. Remember, preparation for economic contraction isn't optional—it's crucial. Consider this a call for financial prudence: fortify your positions and anchor your investments before the inevitable turn of the market tide. Because when the tide goes out, it's not just about who was swimming—it's about who was prepared for the swim.

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