"live in the moment"

87% of investors won’t follow this advice.

It comes from one of the investing giants of our era - Warren Buffet.

And without further ado, here it is:

The lesson is simple to understand but hard to implement.

Don’t get swept up in the moment.

Boring investors know that markets go up and down. And we know that it’s rare that an asset is priced at its actual value. We know that emotion, sentiment and momentum can drive asset prices. And we know, that ultimately, everything corrects to the mean.

Things are hardly ever as bad or as good as they seem.

This is why boring investors follow Buffet’s advice.

When the market is flying high, we are cautious. When the market is down, we are bold.

The unfortunate reality is that following this advice is hard. So hard, that most investors will know it to be true, but ignore it.

Here’s why.

When the markets are up, everyone is enjoying their impressive returns. The feeling of euphoria and optimism is palpable. But you, as the boring investor, need to be cautious. You might be the only one selling at this time. Or the only one not buying.

You might look like a fool, for not joining in the party. But don’t worry. You’re in good company. Buffet, Munger, Marks and others will keep you company here.

A similar concept applies on the flip side.

When everyone panics and the market crashes, what will you do?

Will you have the courage to buy when everyone sells? Will it be bold enough to hold when everyone predicts further drops?

It is simple but hard.

It would be so much easier to follow the emotions of the market and move with everyone else.

But then again. If we did that, we’d get the returns of everyone else. We’d be average.

Don’t forget:

Nothing valuable comes easily.

If you've read this far, you deserve to know that, yes, I did make up the 87% statistic in the first line.

Until we meet again, good luck being “boring”.

~ Mordi