Indian Ticker : Choose Right Stocks that Ticks Money

Secret #2: Don’t invest for ten minutes if you’re not prepared to invest for ten years

When we look at the share price of a company we usually see a wildly fluctuating graph with mighty hills and plunging chasms.

This brings us to what Warren Buffett said a few years back, “If you aren’t willing to own a stock for ten years, don’t even think about owning it for ten minutes.”

He continued, “Put together a portfolio of companies whose aggregate earnings march upwards over the years, and so will the portfolio’s market value.”

In other words, as investors we focus on the medium to long term business characteristics of companies. It is these that drive the share price. Focusing on the short-term aspects of a company including both business and price fluctuations is foolish as Buffett has said. “Most of our large stock positions are going to be held for many years, and the scorecard on our investment decisions will be provided by business results over that period, not by prices on any given day.”

Even though we focus on the long-term, the investment is even more profitable if we purchase the stock during one of its drops. Buffett has said that even for the best of companies, you can still pay too much.

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