TL;DR

Blindly following Warren Buffett’s “cash out” move, retail investors panicked and potentially lost big, proving that following any investment advice without understanding the underlying reasons is a recipe for disaster. Ironically, they probably missed out on gains by selling low, exactly what Buffett isn’t doing.

Story

Another day, another dollar lost. Sound familiar? It should. This story about blindly following Warren Buffett’s investment moves is a fresh coat of paint on an old, rusty trap. John, like many, heard the siren song of easy money: “Follow the Oracle of Omaha!” He bet his retirement on it. Now, he’s eating ramen.

How’d it happen? Simple. Herd mentality. People saw Buffett sitting on cash and panicked. They assumed he knew something they didn’t. They jumped ship without understanding why.

‣ Herd mentality: The tendency to follow the crowd, even when it makes no logical sense. It’s like a flock of sheep leaping off a cliff because the first one did.

Remember 2008? People blindly trusted mortgage-backed securities because everyone else did. How’d that work out?

The real lesson? Don’t blindly follow anyone, even Buffett. Understand why you’re investing. Do your own homework. Or end up like John, reminiscing about the good old days when ramen was a choice, not a necessity.

The current stock market volatility mirrors previous crises. Market corrections happen. Don’t panic and throw your money at the latest “guru’s” strategy. That’s how you end up with empty pockets and a full pantry of instant noodles.

Advice

Stop following blindly. Research why investments are made. Don’t be a lemming.

Source

https://www.reddit.com/r/stocks/comments/1jqcfkt/i_dont_know_why_i_didnt_listen_to_buffet_and_cash/