Be More Like Buffett: Buy Fear

Writing for Barron’s this week, Steven M. Sears deftly captures the aspect of buy low—sell high that renders this otherwise simplistic concept virtually impossible for most individual investors. Regarding the much-admired Warren Buffett, Sears says, “Few people have the guts to actually do what he says.” Case in point, Buffett says to be greedy when others are fearful and fearful when others are greedy. Sears hits the nail on the head however when he says that whenever people have the chance to be greedy, (when others are fearful) they tend to be too terrified to do anything.

My 15 years as a professional investment advisor bears this out. When, during fear-driven markets, I have advised buying attractively-priced securities, I’ve often received incredulous looks, as if I were completely out of my mind. On the flipside, I’ve also received strong-willed support for the exact same advice from other, steely-nerved clients who went on to benefit handsomely. This ability to overcome fear (and greed) during turbulent market cycles is undoubtedly one of the top predictors of investment success.

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Timothy R. Meyer
Meyer Capital Management
President & Chief Investment Officer