Warren Buffett: “You Don’t Get Paid for Activity, You Only Get Paid for Being Right!”

During the 1998 Berkshire Hathaway Annual Meeting, Warren Buffett explained why investors should focus on being patient and finding the right investment, rather than being active and buying anything that comes along. Here’s an excerpt from the meeting:

Buffett: So we won‘t feel we’ve missed anything particularly uh if returns stay where they are.

Because if it turns out that these levels are okay uh they still will not produce great returns from here in our view. That doesn‘t mean you couldn’t have a tremendous market in the short term or something of the sort. Markets can do anything.

I mean you look at the history of markets and you just see everything under the sun but we will not, you know, we have no time frame if the money piles up, the money piles up.

And when we see something that makes sense we‘re willing to act very fast, very big, but we’re not willing to act on anything that doesn‘t, that doesn’t check out in our view.

There’s no, you don’t get paid for activity, you only get paid for being right.

Charlie?

Munger: Yeah, an occasional dull stretch for new buying, this is no great tragedy in an investment lifetime and other things may be possible in such an era too.

I mean it isn‘t like we have a quiver with only one arrow. ‘

Buffett: We sat through periods before. I mean the most dramatic one being the early 70s, late 60s and early 70s. For a long time. It doesn‘t seem so long when you look back on it, seems long when you’re going through it, but it’s like having a tooth pulled or something.

But it‘s, you know, what can you do about it? The businesses aren‘t going to perform better in the future just because you got antsy and decided you had to buy something. We‘ll wait till we find something we like. We‘ll love it when we can swing in a big way though. That’s our style.

You can watch the entire conversation here: