“Rule Number One: Never Lose Money. Rule Number Two: Never Forget Rule Number One”
As a result of the financial crisis of 2008, Warren Buffett lost about $23 billion personally, and his company, Berkshire Hathaway, lost its AAA credit rating. So how can he tell us not to lose money, then? His point is that a sensible investor has a certain mindset that includes:
Avoid frivolous spending.
Make sure you don’t gamble.
Don’t make investments with a cocky attitude that you can lose money.
Educate yourself. He invests only in companies that he understands and thoroughly researches. You shouldn’t enter into an investment expecting to lose money, just as he doesn’t. For Buffett, temperament is more important than intellect when it comes to investing. To become a successful investor, you should not worry about what the crowd thinks….