Interpretation: When the market enthusiasm subsides, you will know which stocks are good and which are junk.

When short-term irrational market factors (overly optimistic or overly pessimistic) recede, investors will see which companies are truly worthy of investment and which companies are just some market hype.

The reflection on investment behavior is that after the market falls sharply, you will know who is speculating and who is investing; it can also reflect on people. Don’t listen to so many voices in the market. After the market is determined, you You will know which ones are deceiving and which ones are actually telling the truth.

Extended information

Buffett’s anecdote:

Many people admire the wine produced in France as the best in the world. Buffett expressed doubts. At a dinner party, the host took out a bottle of red wine and said: This is the most expensive wine in France and the price is very expensive. I specially invited Mr. Buffett to taste it.

Buffett blocked the glass with his hand and replied: "Thank you, there is no need to pour me wine, you might as well give me money." Buffett clearly realized that the reason why these precious wines are sold at high prices The main reason is the intangible things like brand reputation.

In his investments, Buffett also gradually realized that the key to companies with very high profitability is not the tangible assets owned by the company, but the intangible assets.