Warren Buffett’s annual shareholder letters are very well known within the industry. If you haven’t read them before, I highly recommend it. You can find them here Berkshire Hathaway Shareholder Letters. And since his 2014 letter has already been publicized, here is the most important part and its application to today’s stock market (as far as I am concerned).
“Periodically, financial markets will become divorced from reality – you can count on that. …ever forget that 2+2 will always equal 4. And when someone tells you how old-fashioned that math is — zip up your wallet, take a vacation and come back in a few years to buy stocks at cheap prices.”
If Mr. Buffett is not talking about today’s stock market environment in the quote above, well, I give up. In other words, I continue to maintain that investors who look at today’s market and see a huge bubble, will be massively rewarded. Not only by preserving capital at this stage and going long at much lower prices a few years from now, but from having the ability to benefit on the short side. Just at they did at 2000 and 2007 tops.
The Only Relevant Part Of Warren Buffett’s Annual Letter Google