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Buffett has frequently said that one of the biggest mistakes investors make is being too short-term-focused regarding stock prices. Instead, investors should focus on the quality of the company they are buying a piece of and stick around for the long run.
That's not to say that Buffett thinks stock prices are irrelevant. Even great companies whose stocks are overpriced most likely won't be good investments.
But investors should form their own opinions of what a company is worth, not be swayed by what the market says. Declines in a stock's price are merely an opportunity for the well-researched investor to buy more.
Still, it's hard for investors not blessed with Buffett's mental ability or patience to drown out the noise that comes when the market is in session. That's why Buffett urges investors to buy a stock with the assumption that the market won't be open again for several years, making it impossible to sell.
For example, Buffett says, people don't buy a farm and then check the price every 15 minutes. Instead they know they are on it for the long run and focus on making the farm profitable.
Because of Sandy, Monday and Tuesday offered investors a rare opportunity to stop worrying about what the market is doing. The storm dealt a horrific blow to New York City, forcing stock exchanges to close for two consecutive days because of weather, for the first time since 1888.
As a business reporter who watches the market pretty closely, it was weird to be at work early this week and not be able to check on how stocks were trading. But, really, why was it even necessary to look?
When the market reopened Wednesday, the actual companies behind the stocks really hadn't changed much. They were still selling the same products, providing the same services and going through the same challenges that they always do. The fact that the market was closed for a couple of days really didn't matter to the companies' prospects.
Perhaps the feeling that investors had Monday and Tuesday--no prices to check, no ability to sell, nothing to do at all with one's investments--will prove a good lesson going forward. Even if it was learned during an epic storm the likes of which will hopefully not be seen again.
Staff reporter Bill Freehling writes this weekly column on business, personal finance and investing. He can be reached at 540/374-5405 or