“A short quiz: If you plan to eat hamburgers throughout your life and you are not a cattle producer, should you wish for higher or lower beef prices?…But now for the final exam: If you expect to be a net saver during the next five years, should you hope for a higher or lower stock market during that period? Many investors get this one wrong. Even though they are going to be net buyers of stocks for many years to come, they are elated when stock prices rise and depressed when they fall. In effect, they rejoice because prices have risen for the ‘hamburgers’ they will soon be buying. This reaction makes no sense. Only those who will be sellers of equities in the near future should be happy at seeing stocks rise. Prospective buyers should much prefer sinking prices.” - Warren Buffet
I've never heard this quote before. I've always understood the principle behind it, but it helps to think about it in different terms so I thought I'd share.
