Timeless Investing Wisdom – Financial Facts vs. Financial Noise

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Every day, thousands of bits of information compete with each other to get a little piece of your attention and it is so easy to experience information overload in many areas of our life.

When talking about investing, there is plenty of financial information out there that is so easy to feel overwhelmed and often times is hard to make any decision based on what you hear, read or see.

Financial Information Overload

Just few decades ago, accessing information could have been a problem for most individual investors. In today’s world, getting rid of too much information is actually a challenge.

I think you would agree if I say that most of the so-called information could be easily classified as financial noise. In other words, anything that is not useful to make good investing decisions.

The ability to filter out everything that is not useful to make a good investing decision becomes a critical skill that can be a game changer.

On this particular topic, I’d like to share a piece of timeless investing wisdom given by Warren Buffett in his first TV interview at the Adam Smith’s Money World in 1985.

Warren Buffett on Investing

When the interviewer asked if he didn’t find Omaha a little bit off the beaten track for the investment world, he replied that he actually liked the lack of stimulus.

The fact of being far away from Wall Street was one of the things that allowed Buffett and Berkshire Hathaway to focus on the facts needed to make decisions.

Here’s a piece of the transcript:

Interviewer: So Buffett chose to stay in this world, Omaha, Nebraska, where corn grows just minutes from downtown. Now, Omaha is a nice town but nobody claimed it’s the world financial center. Here, the only thundering herd is actually on four feet.

Don’t you find Omaha a little bit off the beaten track for the investment world?

Buffett: Well, believe it or not to, we get mail here and we get periodicals and we get all the facts needed to make decisions.

And, unlike Wall Street, you’ll notice we don’t have fifty people coming up and whispering in our ear that we should be doing this or that this afternoon.

Interviewer: You appreciate the lack of stimulus here?

Buffett: I like the lack of stimulation. We get facts, not stimulation here.

Interviewer: How can you stay away from Wall Street?

Buffett: Well, if I were on Wall Street, I’d probably be a lot poorer. You get overstimulated on Wall Street. And you hear lots of things. And you may shorten your focus and a short focus is not conducive to long profits.

And here I can just focus on what businesses are worth. And I don’t need to be in Washington to figure out what the Washington Post newspaper is worth. And I don’t need to be in New York to figure out what some other company is worth. It’s simple… It’s an intellectual process and the less static there is in an intellectual process, really, the better off you are.

Bottom Line

Realize that there is few actually useful information. The financial media are in the business of attention and their goal is to keep you attached on their channels. They get a lot of attention by selling fear and concerns, there is very little that can be practically applied in helping you achieve your investing goals.

You might prefer to spend less time watching financial shows or the front page of the news and spend more time on reading books, doing research and work on your investment plan.

Are you getting useful information or dangerous overstimulation?

Thanks for reading!

Check out Warren Buffett’s first television interview here.

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