Bases Quote by Warren Buffett
“Although we deal with probabilities and expectations, the actual results can deviate substantially from such expectations, particularly on a short-term basis.”
About This Quote
Source Letter: Berkshire Hathaway Annual Shareholder Letter, 2005
Short‑term outcomes often deviate from probabilistic expectations, highlighting risk of over‑reliance on averages.
In simple terms: Short‑term can differ from expectations.
Key Takeaway
Consider variance in decisions.
Themes
finance
probability
risk
Mood
cautious
analytical
Type
financial
educational
When to use this quote
- investment planning
- risk assessment
- portfolio management
- short‑term trading
Key Concepts
expected value
statistical variance
Questions to Reflect On
- How do you account for short‑term variance?
- When should you trust probabilistic models?
A Different Perspective
Long‑term trends may still align with expectations.
