With tenacity and ingenuity, you can win against a more established competitor. Buffett acquired Nebraska Furniture Mart in 1983 because he liked the way its founder, Rose Blumkin, did business. A Russian immigrant, she built the market from a pawn shop to become the largest furniture store in North America. Her strategy was to underestimate the big fish and she was a ruthless negotiator.
Buffett's famous quote above has almost become a cliché in the world of value investing. Like all great value investing ideas, it sounds very easy in theory, but in practice it's difficult. I don't know any investor who wants to lose money, but I know that many have. If rule number 1 is the golden rule in value investing, why hasn't it been strictly followed? It looks like an oxymoron.
For many years, my understanding of the concept of losing money had been to sell for less than you paid. Well, you can say that's a silly and obvious statement. If we go one step further and invest, we can reformulate the concept of paying more than you sell. Then the question is: what causes us to pay more than what we sell? So maybe what Buffett really meant when he said Don't waste money is more based on the spirit of Don't buy companies with deteriorating fundamentals or put the odds on your side by investing in companies that improve their fundamentals.
Above is only the first level of the message. More importantly, Buffett has perhaps another hidden message in rule number 1: when a loss occurs. The dollar maintained its gains overnight on Tuesday, as concerns over riots in China over COVID-19 restrictions weakened market confidence and aggressive statements by Federal Reserve officials gave the dollar an additional advantage. Rising tensions in China due to the country's strict pandemic measures caused investors to flock to the dollar, a safe haven, causing the Australian dollar, kiwi and the pound sterling to fall by more than 1% overnight.
The president of the European Central Bank, Christine Lagarde, said overnight that inflation in the eurozone has not peaked and that it risks rising even higher than currently expected, pointing to a series of interest rate hikes in the future. Women are getting the hang of this and say that this bottle replaces all the beauty creams in my closet.