Be Fearful When Others Are Greedy and Greedy When Others Are Fearful

Warren Buffett

The smartest financial guy in the world, Warren Buffett, has a saying that goes something like this: you should be fearful when others are greedy and be greedy when others are fearful. What Warren means is that if everyone is jumping on the bandwagon you should hesitate because in most cases when something looks too good to be true, it usually is. And when people aren’t jumping on the bandwagon you should take a closer look at it because the reward of doing so could be extremely high.

Right now everyone seems to be fearful, so I would like to share with you a few ways I am trying to be greedy (which will hopefully make me rich).

Stock Market

During the last few months the stock market took a big dip. Just about every stock is down which has caused people to become fearful about playing in the stock market. I don’t know if the stock market is at its lowest and truthfully I don’t really care. I just know that within the next 5 years it should be doing better than it is now and because of this I am being greedy when it comes to playing the stock market.

Compared to most people I have very little knowledge about the stock market. But one thing I do know is that companies that the government has bailed out are very unlikely to go bankrupt… especially ones like AIG who received 150 billion dollars. Due to this I have been buying stocks like AIG because I feel I will make a substantial return on my investment within the next 5 years.

Buying Companies

A lot of business owners are in debt right now, and as you know, cash is king during a recession. So when a business owner is looking to get rid of his profitable business because he is personally in debt, you can squeeze him to get a very favorable deal for yourself.

What I have been doing in the last few months is hitting up popular websites and asking them if they are interested in selling. In most cases website owners aren’t selling, but every once in a while you will find a website owner who is willing to sell at a great price because he is personally strapped for money due to some rare circumstances.

Angel Investing

Venture capitalists and angel investors aren’t investing much money right now. Good companies who are in need of money are offering more equity in their company than they usually do. Because of this you could potentially get better returns from investing during this recession than most people have seen for decades.

These are the main 3 ways I am currently being greedy. Anyone else want to share how they are being greedy?

Disclaimer: I am not an investment professional, this is just my opinion. Invest your money at your own risk.