Tag - Berkshire Hathaway

Advice to the Advisors

Warren Buffett Lesson on Risk and Volatility | Sheaff Brock Institutional Group

The Lesson Many of Your Clients Were Never Taught

“That lesson has not customarily been taught in business schools,” Warren Buffett observes, referring to the concept that “Volatility is far from synonymous with risk.” In a 2015 letter to shareholders, the Berkshire Hathaway CEO wrote about the difference between risk and volatility. Many investors, he observes, “conflate these concepts, costing themselves money.” Of course, the fact that stock prices will always be far more volatile than cash-equivalents must play a part in any advisor-client discussions of portfolio design. But, [...]