Below Belief

In three of his annual letters to shareholders (1992, 2001, 2004), Warren Buffett has said, in some fashion:

It’s only when the tide goes out that you learn who’s been swimming naked.

Buffett was speaking specifically of insurance and derivative businesses; but, the phrase could easily apply to the stock market as well. When the stock market is soaring, everyone is in up to their chins–splashing around and having fun. When it drops–as it always does–you quickly see who was prepared…and who is desperately running to deeper waters, hoping to cover themselves.
More often than not, naked swimmers drown.

http://www.fwallstreet.com/blog/33.htm

This entry was posted on Sunday, October 12th, 2008 at 8:54 am and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.