The chairman and CEO of Berkshire Hathaway doesn’t sell stocks using a stop-loss order because of its short-term focus. And because he has long maintained that trying to time the market is impossible. Buffett says investors should not try to trade stocks, but invest in them steadily over time.
It “has always struck me as like having a house that you like, and you’re living in, and, you know, it’s worth $100,000 and you tell your broker, ‘You know, if anybody ever comes along and offers $90 [thousand], you want to sell it,'” Buffett joked to the audience at the 1994 meeting. “It doesn’t make any sense to me.”
Buffett expounded that the investors who would trade Berkshire this way are not the kind of share owners he would like to attract. Those investors are not thinking long term with their “totally noninvestment-type calculations.”