By this he means that the way to great returns is to go against the trends while investing in index funds. If Wall Street is fearful, be greedy. If Wall Street is being gready, be fearful.
Buffett also warns against over-trading. Too much activity depletes returns. There’s more information on Warren Buffett’s advice at Yahoo Finance.
Updated July 14, 2010 and originally published March 13, 2005. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @flexo on Twitter and visit our Facebook page for more updates.