Time is the friend of the wonderful business. It’s the enemy of the lousy business. You’re in a lousy business for a long time, you’re gonna get a lousy result, even if you buy it cheap. If you’re in a wonderful business going in, you’re going to get a wonderful result, even if you pay a little too much going in. Though the economy might seem complex, it works in a simple, mechanical way. It’s made up of a few simple parts, and a lot of simple transactions, that are repeated over and over again, a zillion times. .jpeg)
These transactions are above all else driven by human nature, and they create three main forces that drive the economy: Number 1) Productivity growth. Number 2) The short-term debt cycle. Number 3) The long-term debt cycle. To be a successful investor, you have to be able to avoid some natural human tendencies to follow the herd. When the stock market’s going down every day, your natural tendency is to want to sell, when the stock market’s going up every day, your natural tendency is to want to buy. In bubbles you probably should be a seller, in busts, you should probably be a buyer, and you have to have that kind of discipline, you have to be able to stomach the volatility of the stock market. 