Here’s a great excerpt from a CNBC interview with features Warren Buffett, Bill Gates, and Charlie Munger. During the interview Buffett illustrates how investors miss out on great opportunities because they stay anchored on a stock’s previously lower price, instead of focusing on the current price, which may still represent good value, saying:
Q2 hedge fund letters, conference, scoops etc
“It is a little hard when you look at something at x, and it sells at 10x to buy it. It shouldn’t be but I can just tell you psychologically it’s harder when you looked at it in the first place and passed at x, and then buy at 10x, It cost a lot of people money at Berkshire. They saw it at a lower price then and just said – “If it ever gets back there, I’ll buy it.” That’s a terrible way to think!”
You can read the entire CNBC transcript here – Warren Buffett on CNBC’s “Squawk Box”.
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Article by The Acquirer's Multiple
