📖Warren Buffett

Avoid Envy

🌿 Intermediate★★★★☆

Envy drives more bad investment decisions than greed ever could.

💬

The world is not driven by greed. It's driven by envy.

— 2022 Daily Journal Annual Meeting，2022

🏠 Everyday Analogy

Just as one might rush to take out a loan for a luxury car after seeing a neighbor buy one, blindly following the crowd into the stock market when others are profiting often leads to buying at the peak. True investors are like farmers tending their own fields—they focus on cultivating their own portfolio rather than envying others' harvests.

📖 Core Interpretation

Envy is more dangerous than greed. The urge to follow the crowd when seeing others profit often leads to buying at the peak.
💎 Key Insight：Watching your neighbor get rich on crypto or meme stocks triggers the most dangerous emotion in investing: envy. It makes you abandon your strategy, chase returns, and take inappropriate risks. Buffett warns that envy is the one deadly sin that brings zero pleasure. Focus on your own compounding journey — comparison is the thief of returns.

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❓ Why It Matters

Charlie Munger: "Envy is the only one of the deadly sins that you never have any fun with." Envy only brings oneself suffering and leads to mistakes.

🎯 How to Practice

Strategy: Focus on your own goals, remember that the benchmark for comparison should be your past self, and understand the role of luck.

🎙️ Master's Voice

The idea of caring that someone is making money faster [than you] is one of the deadly sins. Envy is a really stupid sin because it's the only one you could never possibly have any fun at.
During the dot-com bubble, Buffett was mocked for missing tech stocks. His investors complained about underperformance. He stuck to his principles. When the bubble burst, he was vindicated. Those who chased tech stocks out of envy lost fortunes.

⚔️ Practical Guide

✅ Decision Checklist

  • Am I investing because others are making money?
  • Am I comparing my returns to inappropriate benchmarks?
  • Am I comfortable with my strategy regardless of others?
  • Can I be happy for others' success without copying them?

📋 Action Steps

  1. Focus on absolute returns, not relative performance
  2. Stop comparing your portfolio to others
  3. Define your own investment goals and timeframe
  4. Celebrate your own progress, not others' luck

🚨 Warning Signs

  • FOMO driving investment decisions
  • Chasing hot stocks because friends are making money
  • Feeling bad about your portfolio when others brag
  • Changing strategy based on others' results

⚠️ Common Pitfalls

✕Others making money indicates good opportunities - it may also suggest prices are already too high.
✕Chasing others' returns - may lead to excessive risk-taking

📚 Case Studies

1
1999 Dot-com Bubble (1999)
Seeing a Neighbor Get Rich from Tech Stocks
✨ Outcome：Many people bought in at the peak, only to lose everything when the bubble burst.
2
2021 Cryptocurrency Boom (2021)
The FOMO sentiment of seeing others get rich quickly.
✨ Outcome：The 2022 market crash inflicted heavy losses on late entrants.

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