More Galleries

What Warren thinks...

about the economy, the credit crisis, Bear Stearns and more. Some 15 times a year, Warren Buffett invites a group of business students for an intensive day of learning. Fortune was there for a recent visit.

1 of 5
What should investors do?
What should investors do?
At Berkshire headquarters, Buffett opened the floor to two hours of questions and answers.
The answer is you don't want investors to think that what they read today is important in terms of their investment strategy. Their investment strategy should factor in that

( a) if you knew what was going to happen in the economy, you still wouldn't necessarily know what was going to happen in the stock market.

(b) they can't pick stocks that are better than average.

Stocks are a good thing to own over time. There's only two things you can do wrong: You can buy the wrong ones, and you can buy or sell them at the wrong time. And the truth is you never need to sell them, basically.

But they could buy a cross section of American industry, and if a cross section of American industry doesn't work, certainly trying to pick the little beauties here and there isn't going to work either. Then they just have to worry about getting greedy.

You know, I always say you should get greedy when others are fearful and fearful when others are greedy. But that's too much to expect. Of course, you shouldn't get greedy when others get greedy and fearful when others get fearful. At a minimum, try to stay away from that.
NEXT: Are you bullish about the U.S. for the long-term?
Last updated April 14 2008: 12:24 PM ET