I finally understand what Buffett meant when he said you don’t have to swing at every pitch. As individual investors (or non-institutional investors), we don’t have the pressure to perform year-after-year. No one is holding us accountable to return 10% a year - this gives us flexibility to buy or not buy - or i.e. to stay in cash for prolonged periods of time (and perhaps stay in money market). This provides individual investors the option to only swing at the truly great pitches (wait till a stock is convincingly undervalued). Of course, you can go short - but you then fall into the trap of trying to time the market. And as Buffett has also said, the market can stay irrational longer than you can stay solvent. If the market keeps running up because of irrationality - or some other reason - you lose if you are short. So why even take the chance? Why not just stay in cash and be safe, and if the market does tank, that's when you strike/swing the hardest.
"Clients who haggle over their agency's compensation are looking through the wrong end of the telescope. Instead of trying to shave a few measly cents off the agency's fifteen per cent, they should concentrate on getting more sales results from the eighty-five per cent they spend on time and space. That is where the leverage is. No manufacturer ever got rich by underpaying his agency. Pay peanuts and you get monkeys." — David Ogilvy “Wrong decisions are part of life. Being able to make them work anyway is one of the abilities of those who are successful.” — Warren Buffett “Instead of asking how many tasks you can tackle given your working hours, ask how many you can ditch given what you must do to excel.” — Morten Hansen Poet Marianne Moore offers a simple life strategy: "I've made it a principle not to be over-influenced by minor disappointments." Entrepreneur Sara Blakely, the founder of Spanx, on failure: "When my brother and I were growing...
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