Think

...and then Warren Buffett said, "Yeah, we think the best way to minimize risk is to think." He paused. The pause became longer. People in the audience waited for him to complete the sentence and at some point, they realised that the sentence was finished and laughter rang out. He had made his point: the best way to minimize risk is to think. This happened in a Berkshire Hathaway annual shareholders' meeting some years ago. Buffett was replying to a question about what he thought of the sophisticated asset-allocation models that Wall Street provided at a great price to investors. The old man went on to explain, "I've got (they say) 60 percent in stocks and 40 percent in bonds, and then they have a big announcement, saying now we're moving it to 65/35, as some strategists or whatever they call them in Wall Street do. I mean, that has to be pure nonsense. 60/40 or 65/