3052: [Part 2] Stocks - Part XIX: How to Think about Money by JL Collins

Optimal Finance Daily - Financial Independence and Money Advice

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Investing, Business, Education, Self-improvement

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🗓️ 24 February 2025

⏱️ 10 minutes

🔗️ Recording | iTunes | RSS

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Summary

Discover all of the podcasts in our network, search for specific episodes, get the Optimal Living Daily workbook, and learn more at: OLDPodcast.com. Episode 3052: JL Collins breaks down how to shift your mindset from short-term price fluctuations to long-term ownership, using VTSAX as a prime example of investing in the entire U.S. economy. Learn why patience, resilience, and a buy-and-hold strategy can lead to financial security over time. Read along with the original article(s) here: https://jlcollinsnh.com/2013/06/14/stocks-part-ixx-how-to-think-about-money/ Quotes to ponder: "You can’t successfully dance in and out of the Market." "As long as the company is sound, the fluctuations in its stock price are fairly inconsequential." "Nothing is sure, but I can’t think of a surer bet than this." Learn more about your ad choices. Visit megaphone.fm/adchoices

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0:30.7	This is Optimal Finance Daily. Stocks, Part 19. How to Think About Money, Part 2, by J.L. Collins of J.L. Collins, N.H.com.
0:42.5	Level three. How to think about your investments.
0:46.3	Warren Buffett is rather famously quoted as saying, rule number one, never lose money.
0:52.2	Rule number two, never forget rule number one. Unfortunately,
0:56.0	too many people take this at face value and then leap to the conclusion that Mr. Buffett has found a
1:01.3	magical way to dance in and out of the market avoiding the drops. Not true. In an interview
1:08.1	linked in this post, you can listen to exactly what he says about this. You can't
1:13.1	successfully dance in and out of the market. My favorite line appears at around the one minute 34 second
1:19.6	mark. Quote, the Dow started the last century at 66 and ended at 11,400. How could you lose money during a period like that? A lot of people did
1:31.3	because they tried to dance in and out, end quote. The truth is during the crash of 2008, 2009, Buffett lost
1:39.2	about $25 billion, cutting his fortune from $62 billion to $ 37 billion. That left over 37 billion being the
1:48.0	reason I was wandering around at the time irritating my friends by saying, gee, I only wish I could have
1:54.5	lost 25 billion. What Buffett didn't do is panic and sell. In fact, he continued to invest as the sharp decline
2:02.3	offered new opportunities. As the market recovered, as it always does, so did his fortune.
2:08.8	So did the fortunes of all who stayed the course. Now, there are likely many reasons Mr. Buffett
2:15.2	didn't panic, as that $25 billion and all the potential it
2:19.2	represented slipped away. Having 37 billion left surely helped, but another key is probably how
	...

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