Mario Anzuoni/Reuters
- Warren Buffett described fear and greed as diseases that infect investors in a shareholder letter in 1986.
- “We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful,” the billionaire investor said.
- Google searches and tweets about Buffett’s famous quote are spiking as coronavirus ravages stock markets and investors try to hold their nerve.
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Warren Buffett once described fear and greed as diseases that infect investors. As the novel coronavirus rampages across the world and ravages stock markets, investors are quoting the billionaire investor as they try to hold their nerve.
“Occasional outbreaks of those two super-contagious diseases, fear and greed, will forever occur in the investment community,” the Berkshire Hathaway CEO wrote in his 1986 letter to shareholders.
“The timing of these epidemics will be unpredictable,” he continued. “And the market aberrations produced by them will be equally unpredictable, both as to duration and degree.”
“Therefore, we never try to anticipate the arrival or departure of either disease,” Buffett added. “Our goal is more modest: We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.”
Buffett doubled down on his stance in a CNBC interview this week, arguing long-term investors should be thrilled by the current selloff as it presents an opportunity to buy shares in quality businesses at a discount.
“That’s good for us actually, we’re a net buyer of stocks over time,” he commented on share prices dropping.
Google searches for a shorter version of Buffett’s famous quote spiked this week. Here’s a Google Trends chart for worldwide searches of “be greedy when others are fearful” over the past 12 months:
Google Trends
Tweets containing the quote have surged this week as well. Business Insider counted more than 200 between Monday and Friday, compared to a handful a day at the start of February.
Here are a few examples:
Tweet Embed:
//twitter.com/mims/statuses/1233230631515062275?ref_src=twsrc%5Etfw
“Be fearful when others are greedy, and be greedy when others are fearful”
– Warren Buffett
Look at airlines and cruise companies that have solid earnings growth, a good dividend, and enough resources to weather the storm and come back strong.$AAL at $20.60$RCL at $77.00
Tweet Embed:
//twitter.com/mims/statuses/1233059861526654978?ref_src=twsrc%5Etfw
@realmoney For what it is worth, in dollar terms I purchased more equities in the last 24 hours than in any week during the last six months.
It may be time to be greedy when others are fearful @jimcramer @cnbcfastmoney @SquawkCNBC @jimcramerTweet Embed:
//twitter.com/mims/statuses/1231896310791491584?ref_src=twsrc%5Etfw
Up day: “Compound interest is the 8th wonder of the world.”
Down day: “Be greedy when others are fearful.”
Crash day: “In the long run we’re all dead.”
Investors are probably searching for and sharing the quote to steel themselves against the coronavirus threat, and encourage others not to succumb to fear and sell their holdings.
Given multiple stock indexes are careening towards their worst weekly performance since the financial crisis, it appears most investors aren’t taking Buffett’s advice.
