Warren Buffett's Legendary Life: Timing the Market, Seizing Opportunities, and Adapting to the Era

1,

When others are greedy, I am fearful,

When others are fearful, I am greedy.

To discuss Buffett’s market timing principles,

one cannot avoid talking about the fate of the United States.

Buffett’s market timing principle is very simple,

almost universally known when spoken: When others are greedy, I am fearful,

When others are fearful, I am greedy.

However, these two sentences are not without prerequisites,

nor are they universally applicable.

He has repeatedly stated himself,

being born in the United States,

is like winning a “Ovary Lottery.”

The fate of the United States,

is the foundation of his investment performance.

So, what is the actual state of the US’s fate?

I want to make a basic evaluation from the dimensions of space and time.

From a spatial perspective,

the United States is a major country.

We know,

there are 197 countries in the world,

regardless of geography,

population, or economy,

the US is on par with the entire Europe as a unit entity,

not on the same level as the UK,

France,

Germany.

Looking globally,

the only other major powers that can be called great powers alongside the US are probably China,

India and Russia are somewhat lacking.

Economists at the World Bank and IMF (International Monetary Fund)

have developed many models and indicators,

analyzing data samples from dozens of medium-sized countries,

and their forecast results look quite good,

but they are often not suitable for large countries like China and the US.

In investing,

scale differences lead to what kind of results? We can see,

leading companies in European and Japanese stock markets

are often national champions,

at most dominating a niche; while the leading companies in the US stock market

are often global industry leaders.

The scale effect here is very significant.

As of the end of 2020,

there are only 5 companies worldwide with a market value over 1 trillion USD,

of which 4 are American,

they are Apple,

Microsoft,

Amazon,

Google,

and one is Saudi Aramco.

Companies with a market value between 500 billion and 1 trillion USD number 5: Facebook,

Tesla from the US,

Alibaba,

Tencent, and TSMC from China.

Other national leaders can only rank below 300 billion USD,

there’s a big gap in the middle.

It should be noted,

Berkshire Hathaway’s own market value is close to 500 billion USD,

surpassing the total market size of many small countries.

If not in the deep waters of the US stock market,

it would be impossible to nurture a “big fish” like Buffett.

From a temporal perspective,

the US is a latecomer on the global stage,

but its rise over the past hundred years has been rapid.

After World War II ended in 1945,

the US entered a peak period of national fortune.

At that time, Europe was devastated,

the best talents and capital all fled to the US.

After a major “reshuffle,”

the US GDP (Gross Domestic Product)

once accounted for 50% of the global total,

its gold reserves accounted for 75% of the world,

it was truly dominant,

at the height of its power.

In 1945,

Buffett was 15 years old,

at a youthful stage of forming his worldview.

Buffett has always firmly believed in the US’s destiny.

This is equivalent to his ideological steel seal.

This ideological steel seal is not the result of rational analysis.

In fact,

rarely can worldly affairs be analyzed as clearly as “scallions mixed with tofu, straightforward and transparent,”

often, after analysis, several trends still contradict each other,

several pieces of evidence conflict,

so which side do you bet on? At this point, only the ideological steel seal can help.

With this ideological steel seal,

Buffett was able to resolutely practice "when others are greedy, I am fearful,

when others are fearful, I am greedy."

During the 2008 financial crisis,

global stock markets plummeted,

everyone was anxious.

But Buffett went on TV to give a speech,

expressing confidence in the US economy,

and publicly announced he was buying stocks.

Today, looking at Buffett,

we seem to see only a wise old man,

but behind this image,

there is actually a persistent youth.

Without this historical perspective,

we cannot truly understand this legendary figure.

From a macro trend perspective,

it appears that the US stock market has been a hundred-year-long bull,

but many older Americans do not think so.

Buffett’s fortunate point is that,

he was born in 1930,

just one year after the Great Depression.

When he grew up and showed his talents,

it was right at a major bottom in a century-long history.

Of course,

in an era where everyone fears stocks,

young Buffett was particularly fond of securities investment,

and maintained this stance throughout his life,

probably the highest realm of “when others are fearful, I am greedy.”

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