Warren Buffett says if you want to learn how to make money from the stock market you should look at how he made some money with two small real estate investments.
In an excerpt published by Fortune , from his upcoming annual letter to Berkshire Hathaway shareholders, Buffett writes about his purchase of a Nebraska farm and his investment in a retail property near New York University in Manhattan. Berkshire Hathaway's 15 biggest stock holdings.
And most importantly, in both cases he invested because he thought the assets would be increasingly profitable, not because he expected to sell at a higher price. Games are won by players who focus on the playing field—not by those whose eyes are glued to the scoreboard. He warns against "letting the capricious and irrational behavior" of stock prices make an investor "behave irrationally as well.
In addition, Buffett argues, "Forming macro opinions or listening to the macro or market predictions of others is a waste of time. When he bought the properties in and , economic projections didn't matter to him.
Whatever the chatter, corn would keep growing in Nebraska and students would flock to NYU. He also urges timid or beginning investors against going into stocks "at a time of extreme exuberance" and becoming "disillusioned when paper losses occur.
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