“Be fearful when others are greedy, and be greedy when others are fearful.”
- Warren Buffet
These are some compelling words from a very successful investor, and his advice has proven to be true in a variety of circumstances.
For me personally, while other businesses were being shut down due to the pandemic, mine blossomed because I wasn’t afraid to take advantage of the online market while others were afraid to make a move. My business is based online, and more and more people are finding me there as they switch to a more remote lifestyle.
And I’m not the only one.
Before COVID, Upwork’s net worth was somewhere between $500- and $700 million, but now they’ve skyrocketed to over $6 billion.
However, it’s important to figure out whether these successes will go as quickly as they came, or whether they’re here to stay.
One of the key factors for making any type of investment is thinking forward into the future. Will the thing you’re investing in be around for more than a few years? Will it continue to grow?
For most of us, our first taste of learning to predict the future of the market is when we are faced with the decision to choose a college major. If everyone is going for the same degree, chances are that high competition will follow. At the same time though, you need a degree that will be relevant in the coming years.
The same goes for buying or selling stocks. A good rule of thumb is to think about whether you would want to actually buy the company before you buy stocks in it. After all, you’re buying a portion of the company. Don’t invest in something in the hopes that it’ll become an overnight success.
The reason we hear about overnight success stories in the news is because they don’t happen.
When learning to run a successful business, one of the key parts is figuring out whether others are going to be interested in investing in your business. So getting to know what people are drawn to in a business can go a long way in ensuring success.
You don’t want to be stuck in a business that will soon be obsolete. For example, there was a moment in time when typewriters were all the rage, and there were many businesses competing to try to build the best one. But when the computer came along, it completely changed the course of history, and many investors had to decide whether to stick with designing typewriters or switch to computers.
So as investors and business owners, it’s important to constantly be thinking about the future so you can be one step ahead at all times. If you can’t visualize the future and be part of creating it, then you will always be reacting to what the future brings you.
So be fearful when others are greedy, and greedy when others are fearful, because, at the end of the day, you have to know when something’s too good to be true.
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