I’m writing this one a few days in advance, so for all I know the market’s been just jolly as you read this. But it doesn’t feel jolly today. Sure, the Dow’s down only 3% or 4%, but any number of smaller stocks are down 30% and 50% and more over the last few weeks. So for those few of you who may not own shares in Berkshire Hathaway or see Warren Buffett’s annual shareholders’ letter some other way (to my everlasting regret, I see them some other way — the press list) I thought that I would pull out a quote that seems apt … and could seem apter and apter if things don’t go well.

“[W]hen you read a headline that says, ‘Investors lose as market falls,'” advises Buffett, “edit it in your mind to ‘Disinvestors lose as market falls — but investors gain.’ Though writers often forget this truism, there is a buyer for every seller and what hurts one necessarily helps the other. (As they say in golf matches: ‘Every putt makes someone happy.’)”

Especially if you’re young and adding to your investments each year rather than drawing upon them — investing rather than disinvesting — then a falling market is a wonderful thing.

Of course, this presupposes the notion you are trying to buy companies that you actually believe will make a lot of money (profits) over the years to come, rather than merely buying stocks you hope will go up.

If you’re not young and in or entering your disinvesting years, then market declines are bad news. And we may not have seen the last of this one.



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