Buffett Calls Mr. Market a Drunker Psycho

When Buffett was questioned about his philosophy that helped him achieve an estimated net worth of $74 billion, he did not shy away from the question at all.

“Pay no attention to headlines in the paper or people on television or anything, but put aside a little money each month. I’d put it in a very low-cost index fund. And if you do that regularly throughout your working career, you’re bound to have a substantial amount of capital.”

Buffett gave a caution and said not to try to time the market by picking individual stocks, but to “just put X dollars per month away and you’ll live a very comfortable life.”

Buffett also talked about how the stock market is “there to serve you.”

“You can’t ignore it [the stock market],” said Buffett.

“You’ve got your choice of thousands of businesses. Now, the best thing for most people is to buy a cross-section of them. But every day, I get offered through the stock market businesses and the prices change every day.”

Buffett also added, “this imaginary person out there – Mr. Market – he’s kind of a drunken psycho. Some days he gets very enthused, some days he gets very depressed. And when he gets really enthused, you sell to him and if he gets depressed you buy from him. There’s no moral taint attached to that.”

Buffett ended his discussion with this very simple mantra: “emotions are contagious, and emotions have no business in investing.”

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