After extensive research, you've found a company that you think will
prosper in the decades ahead, and the stock is currently selling at a
reasonable price. Should you delay or forgo your investment to wait
for a price a few pennies below the current price?
Fisher told the story of a skilled investor who wanted to purchase
shares in a particular company whose stock closed that day at $35.50
per share. However, the investor refused to pay more than $35. The
stock never again sold at $35 and over the next 25 years, increased
in value to more than $500 per share. The investor missed out on a
tremendous gain in a vain attempt to save 50 cents per share.
Even Warren Buffett is prone to this type of mental error. Buffett
began purchasing Wal-Mart many years ago, but stopped buying
when the price moved up a little. Buffett admits that this mistake
cost Berkshire Hathaway shareholders about $10 billion. Even the
Oracle of Omaha could have benefited from Fisher's advice not to
quibble over eighths and quarters.