How many times have you invested in a business before everyone jumped in and became the norm?
Well, if the answer is several times then you are a wise man according to Warren Buffet’s famous 3 I’s quote.
And what if you are always the last to jump on a business when everyone is already there? You a certified fool, the quote teaches. If you come in between, then you are neither.
Warren Buffett came up with “First comes the innovator, then imitator and then the fool” to show how every industry and business has a cycle.
Innovators, who see opportunity where others don’t; imitators, who take note of what the innovators are doing and mimic it (with varying degrees of success); and idiots, who jump on the bandwagon far too late with poorly executed attempts to cash in on what everyone else is doing.
Innovators are the rule breakers. These are the visionaries.
They’re the ones we’ve talked about a lot from week to week. These are the companies that are admired because they’re driven by people with a vision, and as Buffett, in the quote I just read you, says: “They see opportunities that others don’t.”
Therefore are very very few.
What follows the visionaries are imitators who also jump in with copy-pasted ideas.
And finally, the fools, who are the most, coming with the hope of catching up and making a killing. By now it’s already too late and anyone jumping on the business will defiantly end up making a loss.
We have even recently seen this cycle in Cryptocurrency.
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When the price is low and which is the best time to buy they tend to overlook and ignore the business but when it’s too late to jump in that’s when they want to try their luck.
Watch this video by Warren Buffet to understand the full quote: