Avoiding ruin is the key to compounding
The guest argued that the core of successful long-term investing is focusing on downside risk and avoiding 'zeros' rather than chasing upside.
The argument
Drawing parallels between Sun Tzu's military strategy and Warren Buffett's investment philosophy, the guest explained that because zero does not compound, survival and defense must be prioritized first to remain in the game long enough for compounding to work.
Hear it yourself
"And then I thought, well, that's really what Buffett says as well. The the biggest risk here is that you blow up, and zero doesn't compound. So the entire investment strategy of Buffett's really is avoiding the zeros."
00:00 / 00:15
AFFILIATE LINK · ZORTIX MAY EARN A COMMISSION · NEVER A RECOMMENDATION TO TRADE