Warren Buffett, Chairman and CEO of Berkshire Hathaway Inc. (NYSE: BRK-B), was in Detroit last month. The billionaire sat down with Quicken Loans Chairman and Founder Dan Gilbert, along with President and Chief Marketing Officer Jay Farner, for an hour-long chat.
When asked about the philosophy that brought him an estimated net worth of about $74 billion, Warren Buffett did not shy away.
“Pay no attention to headlines in the paper or people on television or anything, but put aside a little money each month. I’d put it in a very low-cost index fund. And if you do that regularly throughout your working career, you’re bound to have a substantial amount of capital.”
Buffett did caution to not try to time the market and pick individual stocks, but to “just put X dollars per month away and you’ll live a very comfortable life.”
The Oracle of Omaha also spoke about how the stock market is “there to serve you.”
“You can ignore it [the stock market],” Buffett said.
“You’ve got your choice of thousands of business. Now, the best thing for most people is to buy a cross-section of them. But every day, I get offered through the stock market business and the prices change everyday.”
He added: “This imaginary person out there — Mr. Market — he’s kind of a drunken psycho. Some days he gets very enthused, some days he gets very depressed. And when he get really enthused, you sell to him and if he gets depressed you buy from him. There’s no moral taint attached to that.”
Buffett ended this particular discussion with another simple mantra: “Emotions are contagious, and emotions have no business in investing.”