Conceptual Investor

Warren Buffett: "Even if a stock drops 50%, there's no need to panic." Investor: "What should you do when a stock drops 50%?" Buffett: "First, you need to understand what a stock really is." Investor: "What do you mean?" Buffett: "If you buy stocks, you must be mentally prepared for them to fall 50% or even more." Investor: "But doesn't that mean losing half your money?" Buffett: "Yes." Investor: "Wouldn't most people panic and want to sell?" Buffett: "In fact, Berkshire Hathaway's stock has fallen by roughly 50% on three separate occasions." Investor: "Really? Even Berkshire?" Buffett: "Yes." Investor: "Was there something wrong with the business?" Buffett: "No. There was nothing fundamentally wrong with the business." Investor: "Then why did the stock price collapse?" Buffett: "Because stock prices and business values don't always move together." Investor: "Even so, a 50% drop is terrifying." Buffett: "That's exactly why you should never buy stocks with borrowed money." Investor: "Why not?" Buffett: "Because when prices fall, you may not be able to handle the pressure." Investor: "So when is the right time to buy?" Buffett: "Nobody can predict the bottom. Nobody." Investor: "So buying today doesn't necessarily mean I've made the right decision?" Buffett: "Of course not." Investor: "And you would still invest?" Buffett: "Because I look at investments with a 20- or 30-year time horizon." This is something every investor should think about. Of course, this doesn't mean every stock deserves to be held forever. If a company's business performance or long-term outlook deteriorates, selling may be the right decision. But many investors make the mistake of panic-selling simply because the stock price is falling. The hardest part of investing isn't buying at the bottom or selling at the top. It's staying rational when the market is falling and knowing whether the businesses you invested in are still worth believing in. A market crash is where an investor's mindset is truly tested. ( lf this helps you, like + follow + share. ）