Be fearful when others are greedyThere’s been a surge of discount brokerage account openings. Firms can’t keep up and worse yet, are having trouble servicing their existing clients. More recently, bitcoin dealers have joined the party. Mr. Buffett’s insight:Article content
For financial educators like me, this newfound interest in investing is overdue, but unfortunately, it’s mostly being fuelled by low cost trading and an insatiable appetite for risk. This combination has led to heavy trading in riskier stocks and increased use of leverage, options, and derivatives. Mr. Buffett’s words:
“Derivatives are like sex. It’s not who we’re sleeping with, it’s who they’re sleeping with that’s the problem.”Herd mentality is running strong right now . Over many decades, Mr. Buffett has enhanced his reputation and wealth by zigging when others are zagging.