What I learned from Warren Buffett

Not from him personally, you understand, but from watching the HBO documentary "On Becoming Warren Buffett."

Making his daily breakfast stop at McD's drive thru on the way to his office, Mr. Buffett spends either $2.61 (2 sausage patties), $2.95 (sausage, egg and cheese biscuit) or $3.17 (bacon, egg and cheese biscuit).

Here's the important part:  his choice depends on the market conditions.  Market down?  Go with the $2.61 option.  Stagnant?  It's the $2.95 meal.  Going up?  The full $3.17 splurge.

If Ben Franklin were alive today, he might phrase it this way in Poor Richard's Almanack:

Live today based on what you earned yesterday, not on what you hope to earn tomorrow. 

I call that a wise saying.

Penny Pincher

Grasshopper or ant? Which are you?

Remember this Aesop fable?

The Ant and the Grasshopper

   IN a field one summer’s day a Grasshopper was hopping about, chirping and singing to its heart’s content. An Ant passed by, bearing along with great toil an ear of corn he was taking to the nest.
   
  “Why not come and chat with me,” said the Grasshopper, “instead of toiling and moiling in that way?”    

  “I am helping to lay up food for the winter,” said the Ant, “and recommend you to do the same.”
 
  “Why bother about winter?” said the Grasshopper; “we have got plenty of food at present.”

    But the Ant went on its way and continued its toil.

    When the winter came the Grasshopper had no food, and found itself dying of hunger, while it saw the ants distributing every day corn and grain from the stores they had collected in the summer. Then the Grasshopper knew:

“IT IS BEST TO PREPARE FOR THE DAYS OF NECESSITY.”

 Æsop. (Sixth century B.C.)  Fables.
The Harvard Classics.  1909–14.
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Words for the wise:  if you save for a rainy day, you may never need an umbrella.

Penny Pincher