Habits of the Master Investors

Habit: Have Infinite Patience

Master investor Warren Buffett tells us that if you have stringent investment criteria, there naturally will be extended periods of time when you can't find anything to invest in.

In February of 1973, the U.S. economy was in recession and the Dow had fallen by 40% from its highs. Stock in the Washington Post Company had fallen so far that Wall Street valued the company at only $80 million.

Buffett estimated that if the company sold its newspaper and magazine businesses to a private publisher, it would get around $400 million, so he began buying shares at an average price of $22.75 per share.

However, the price of the stock kept falling, and it took two years before Buffett got back to his original purchase price. Even so, he didn't care how long he had to wait and his stake now is worth around $2 billion.


Lesson: It's not necessary to always be doing something in the market. As an investor, you get paid for being right, not for actively trading!

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