The Five Most Common Investing Mistakes: Buffett's and CLEC's Shared List

In 30 seconds: Long-term investing is “getting rich slowly” — and the second thing to do is “nothing at all.” Yet most people take the wrong road and waste time and wealth. James (partly quoting Buffett) lists the five most common mistakes: ① over-watching the price ② over-diversifying ③ chasing hot stocks ④ perpetual wait-and-see ⑤ over-trading. This page links each back to the page that cures it — your job is simply to not make these mistakes, and winning investing follows.¹

The five mistakes

1. Over-watching price swings — Buffett says he only cares about 10- and 20-year returns; “what happens in a week or a year I don’t care about at all, and can’t predict anyway.” Mr. Market is highly emotional; if you’re not in the market, that big drop has nothing to do with you. → see 崩盤是朋友, 從擇時操作到打死不賣

2. Over-diversification — “The average person is told to buy bonds, funds, insurance, this AI, that Treasury, that junk bond — a whole pile — which signals you know nothing about investing.” Why does the industry tell you to diversify? Because they run a supermarket: shelves stocked with products, they profit when you buy, whether or not you do. Good investing means concentrating long-term in the strongest instrument; stock-bond rebalancing only drags down long-run performance. → see 為什麼是納斯達克100 (why not VT / a basket), 為什麼不買債券

3. Chasing hot stocks / herding — chasing star stocks and buying with the crowd “usually ends in a big drop and heavy losses.” → see 從擇時操作到打死不賣

4. Perpetual wait-and-see (“Mr. Wait-and-See”) — “It’s up now, I’ll wait for it to dip a bit before buying” — and when it does dip (say last June, last October) he doesn’t buy either; he’s always waiting. Some wait three, five, ten years. The cure is to settle your ratios and buy once at market price, not wait for a perfect moment that statistically doesn’t exist. → see lump-sum buying

5. Over-trading — the worst kind: buying here, selling there, churning for nothing. “With index funds you don’t need to know anything — you can invest lying down and still succeed.” → see 從擇時操作到打死不賣

🔑 One line: getting rich isn’t about doing many things right, it’s about not making these five mistakes. “Avoid losing investments, and winning investing comes naturally.” Get rich slowly, trust the road is right, and a drop isn’t a risk — it’s a chance to overtake on the curve.¹

Extended: Buffett’s ten investing myths (00372)

Another CLEC talk summarized a Buffett video’s ten common investor myths, complementary to the five above:²

1. Don’t hold cash for its own sake — Buffett actually “hates cash”; he holds it only when there aren’t good enough opportunities, not as a goal. Don’t miss investing by waiting on the economy.
2. Don’t change strategy on rate-hike / recession fears — switching strategy off macro data is a bad habit.
3. Don’t over-diversify — “diversified to the point of knowing nothing”; if you must pick stocks, three at most. Buffett and Munger actually revere index investing (“such great results doing nothing — unbelievable”).
4. Volatility isn’t risk — Buffett says his real losses came from his own ignorance about the companies and from weak psychology (selling a good stock on a small dip, then watching it soar). Success = pick right + patience. (Apple 100→70→10× is an illustrative spoken example, not precise data.)
5. You don’t need a high IQ, just common sense — many high-IQ fund managers can’t beat the market, “because they’re too clever.”
6. The best investment is in yourself — grow knowledge and ability; reading is the cheapest investment (he esteems Buffett, Munger, Peter Lynch, Howard Marks). Echoes 值得讀的投資書籍.
7. “Asset allocation” is a sales tactic — Buffett calls multi-asset allocation nonsense, a financial-industry supermarket pitch (buy bonds, high-yield, various products). ⚠️ Note: this attacks multi-asset diversification, not CLEC’s “QQQ + cash + leverage ratio” — CLEC’s allocation is about controlling beta and the cash level, a different thing from the diversification Buffett rejects.
8. Day trading is gambling — Buffett calls it an “ignorance tax.”
9. Growth is value — there’s no “growth stock vs. value stock”; all value includes growth, since capital must grow over time to mean anything.
10. Don’t wait to invest — echoes mistake 4’s “Mr. Wait-and-See” above.

⚠️ Faithfully summarizes James’s / the lecturers’ spoken views on CLEC (partly quoting Buffett) — personal experience, not investment advice. Neither session has a corresponding deck; content is from transcripts; figures like Apple’s are illustrative spoken examples.

Footnotes

1. CLEC James, long session 00412 “Get Rich Slowly via Long-Term Investing… Common Mistakes,” 2023-05-06, the five mistakes @09:30–12:30. No corresponding deck; transcript at raw/transcripts/長篇/00412…. The “supermarket” analogy for over-diversification and “Mr. Wait-and-See” are James’s spoken words. ↩ ↩²

2. CLEC, long session 00372 “Buffett’s Ten Investing Myths; Invest With Independent Thinking and Inner Calm,” 2022-09-24, the ten myths @03:00–16:30. No corresponding deck; transcript at raw/transcripts/長篇/00372…; a summary of a Buffett video, with Apple’s gain/loss as a spoken example. ↩