Warren Buffett buys companies with unbreakable competitive advantages, or moats. Coca-Cola sells 2 billion drinks a day and has dominated for over 100 years. The strategy is to buy during market crashes and hold businesses with low long-term risk.
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If you looked at the stocks he owns, they're not the best ones in terms of price, but they have what he calls a moat. You know, Coca Cola he often refers to as selling 2 billion drinks a day. No one's going to take down that castle, right? And so I don't think about risk in terms of stock price movement. I think about terms of risk in the moat. You know, if you took that Coca Cola company started in 1886, okay, what's it survived in that hundred and fifty years? Can't kill it. You just can't kill it. And so that's where I see the risk management in just they're not going anywhere. You know, it's solid and they always bounce back up. You know, if you had a chance to buy, you'd always want to buy at the worst times. Well, and that's the overall rule, right.