Only when the tide goes out do you discover who's been swimming naked.

Hi,
Warren Buffett quotes: "Only when the tide goes out do you discover who's been swimming naked."

Too often people buy thing they don't understand and think is at a bargain. An example is when you see a shop at a 50% discount storewide you will tend to buy some thing in the shop, as you will think it is a bargain. When you reach home then you will find out that the item you just bought is spoilt and you have been cheated by the store.

In the stock market it is almost the same. People always buy thing without understanding them. Thinking that the price had drop more than half and they should be able to get a bargain if they buy now. Warren Buffett famous quote: Risk comes from not knowing what you're doing tell us that you can lose money from not knowing what you are doing.
Remember Warren rule of investing Rule No.1: Never lose money. Rule No.2: Never forget rule No.1. It is hard for small investor to understand everything and you can spend a lot time doing that. Mr. Buffett suggests investors who don’t want to spend a lot of time in investing to buy low-cost index funds. This would give investor a good return in long-term.