Only when the tide goes out do you discover who’s been swimming naked – Warren Buffett

Only when the tide goes out do you discover who’s been swimming naked – Warren Buffett

Anyone who witnessed the bubble bursts and the bull markets in the past 10-20 years will definitely understand what Buffett meant here.  Switch on the television or go to any stock analysis site and you will be immersed in “expert” opinions, stats, “hot tips” and more. Some people even go to the extent of predicting what will happen to stocks or even sectors in the near future and in the not so near future.

And then there are folks who do the stupidest thing. These people are so confident (or should I say their reality is so distorted) to lend money on high interest rates and invest them in stocks based on a hot tip. When the “stuff” hits the fan they will be left naked. They will lose everything.

Warren Buffett has only two rules in investing.

Rule #1.  Do not lose your money

Rule#2.  Follow Rule#1

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