Our goal is more modest: We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful. - Warren Buffett

Be Fearful When Others Are Greedy and Greedy When Others Are Fearful

be greedy when others are fearful, and fearful when others are greedy.

Be greedy when others are fearful, and fearful when others are greedy

Our favorite holding period is forever. We are just the opposite of those who hurry to sell and book profits when companies perform well but who tenaciously hang on to businesses that disappoint. Peter Lynch aptly likens such behavior to cutting the flowers and watering the weeds.

The primary test of managerial economic performance is the achievement of a high earnings rate on equity capital employed (without undue leverage, accounting gimmickry, etc.) and not the achievement of consistent gains in earnings per share. In our view, many businesses would be better understood by their shareholder owners, as well as the general public, if managements and financial analysts modified the primary emphasis they place upon earnings per share, and upon yearly changes in that figure.

Managers who want to expand their domain at the expense of owners might better consider a career in government.