It is a very simple idea to use the power of compound interest

It is a very simple idea to use the power of compound interest  Smart people are easily attracted by complex things, and underestimate the great influence and importance of simple ideas. But Monish Pabrai is a full pragmatist, and he will not fall into this trap. "It is a very simple idea to use the power of compound interest, a very simple idea to imitate, and a very simple idea to be honest." He said. However, when you apply some powerful ideas with great enthusiasm, the cumulative effect is "incomparable".

How did Buffett buy at the bottom?


How did Buffett buy at the bottom?

We can't predict where the bottom of the market is.

In fact, no one can predict accurately.

Like Buffett can't judge the bottom.

Buffett started to act when he was in the middle of the 2008-2009 financial crisis.

Buffett's position in the financial sector is detached, and he has repeatedly made bottom calls when the market fell sharply.

We all know that Buffett has a lot of cash and bonds in his hands.

When the financial crisis appeared in 2008, Buffett once again acted as a firefighter.

Bought preferred shares of general electric and Goldman Sachs.

Buffett made a very interesting operation after taking the shot.

He immediately participated in the TV program, published public relations, and expressed his confidence in the economy. And stressed that he was already buying US stocks.

This excited the market at that time. Buffett is good at using his influence.

But then the financial crisis continued. Buffett's TV program did not reduce the decline of US stocks.

Berkshire, its subsidiary, also fell 30% in the second half of the financial crisis.

After Buffett bought the preferred shares of general electric and Goldman Sachs, the preferred shares of the two companies fell by more than 30% and 50% respectively.

Of course, it took the SP 500 more than two years to recover from the full decline of the financial crisis. In the following years, US stocks also continued to rise.

If you stand for a few months to a year or two, Buffett's shot at that time had large short-term fluctuations.

But looking back a few years later, Buffett's move at that time, although it did not buy at the bottom, was still full of money.

Underestimation is a region, not a point.

When investing, we can't predict the bottom.

However, whether the current market and varieties are cheap can still be judged.


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