Warren Buffett, the chairman of Berkshire Hathaway (BRK.B) (BRK.A), learned early that fear is one of the most expensive forces in investing. Markets have a way of turning uncertainty into urgency, convincing investors that action is required precisely when patience is most valuable. That’s why Buffett has repeatedly warned over his decades-long career that active trading and high frequency strategies are often a losing game. Specifically, in his 1996 letter to shareholders, he warned that “Selling Fine Businesses on Scary News is Usually a Bad Decision.”
Buffett wasn’t dismissing risk. He was distinguishing between noise and impairment. Headlines can be frightening without being meaningful. Wars, recessions, political crises, interest-rate scares, and market crashes all feel existential in the moment. But most of them don’t permanently damage the earning power of great businesses. Prices fall long before fundamentals do.
