Warren Buffett Explains Why Volatility Is Good For Stock Investors
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- Опубликовано: 2 мар 2023
- Warren Buffett has spoken extensively about how investors can take advantage of volatility to find investment bargains, and in this video contrasts the traditional view of volatility as risk with his own definition of stock market risk.
Volatility not equaling risk is almost so obvious, that it's a wonder I was taught this at Wharton during my time there. They literally taught executives that the reduction of a portfolio's volatility using mathematical diversification is the goal of one seeking to reduce risk in investing. Absolute nonsense.
Edit: Wharton taught me this in 2020. This is still happening.
Therein lies the opportunity! The more institutions teach the wrong things about valuation and investing, the greater the opportunities for true value investors!
If 1000 people buy 1 share at $100 and 1 person buys at $99. The stock exchange will still say its worth $99, even the though the 999 people paid $100. I always thought that was funny, then of course add volatility to this and you have a jiggling price being directed by fear and hope with no one understanding what the majority has actually paid.
Very insightful video
Beta is not equal to volatility.
Didn't convince me. Qualitative judgements are subject to bias, quantitative aren't. If he had paid attention to the volatility in shoe prices at the time (due to globalization) it might have tipped him off to just how extreme the competitive price difference in shoe manufacturing in Asia was at the time, the low cost producers were there, and he might have avoided the Dexter purchase.
It is true that quantitative analysis is free from the bias that can infect qualitative judgement, but so what? The fact that volatility is quantitative and can be calculated (which Warren fully acknowledges in this clip) doesn't mean that it says anything about risk any more than it says anything about any other business consideration. Volatility is evidence of volatility, and nothing else, which is only of interest if you can't stomach the ups and downs of share prices. Risk by contrast is about business fundamentals, as you have described in your analysis of the shoe industry, and as Warren also states but acknowledges that he missed in this case. The idea that measuring the volatility of any share price would have been of any help in this regard is absurd.
@@paulcassidy8130 be quiet and let him waste his money
Has Warren Buffet or Charlie Munger shared any speculation about the impending severe recession as some in the Federal Government are calling it?
Yes
when do u expect this impending recession to hit? its been a year since your comment so its gotta be any minute now
@@DarkoFitCoach
Who knows.
@@MustangsTrainsMowers so its impending but it can be anytime so next week or in 15yrs time? Then impending isnt the right word is it?
Also we had recessions, market collapses, 2 world wars, worldwide pandemic and lockdowns, dozens of wars, internal turmoil, presidents killed and so on. And yet sp500 on average still grows 10.5% per year
I prefer Charlie Munger
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I am sorry sir my marriage mujhe kam hai isliye galti Ho gai mujhse main aapse aapka hai vaisa kariye Gaya nahin Dunga aur jo profit hai vah profit agar mujhe kuchh hamare bacche bhi bekar hai unko bhi kuchh business dal kar dunga to sab chalta rahega Aisa karenge to aapka shukriya Ada Jay Hind
I think I'm one of the few traders on RUclips that share their portfolio PNL for the world to see.