Never lose money - W Buffett
"Rule No.1: Never lose money. Rule No.2: Never forget rule No.1." Warren Buffett
This quote is very powerful to me, here's why:
Question:If you have $100000 and in successive years, you are +20% and -20%, your end result is:
A. >$100K
B. <$100K
C. Even
Same scenario, but -20% and then +20%:
A. >$100K
B. <$100K
C. Even
It's easy after you do the math, but some find it surprising that in both cases, you end up with $96,000. You lose money in either scenario. Its a scary thought given the up and down annual returns of the stock market.
This quote is very powerful to me, here's why:
Question:If you have $100000 and in successive years, you are +20% and -20%, your end result is:
A. >$100K
B. <$100K
C. Even
Same scenario, but -20% and then +20%:
A. >$100K
B. <$100K
C. Even
It's easy after you do the math, but some find it surprising that in both cases, you end up with $96,000. You lose money in either scenario. Its a scary thought given the up and down annual returns of the stock market.
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