By Scott Barlow via

Warren Buffet is widely regarded as the most successful investor ever. His investment prowess and success is the stuff of legend.

Yet in 1999/2000 investors in his investment company Berkshire Hathaway (chart below – blue line) lost over -60% of their investment! Additionally, an investment in Berkshire Hathaway lagged an investment in the stock market (S&P500, red line) by -44% at its worst point.

Despite experiencing the loneliness and huge discomfort of massively underperforming the benchmark indices, Buffett didn’t flinch and came back stronger than ever.

Our capital is underutilised now,” Buffett said. “It’s a painful condition to be in, but not as painful as doing something stupid.

Buffett is also famous for saying that to succeed in investing, you need to be greedy (buy) when everyone else is fearful (selling) and fearful (selling) when everyone else is greedy (buying). In this statement, Buffett reflects how well he understands the power of contrarianism to long-term investment success. But his experience should serve also to remind investors that such a stance can be painful and lonely because it is not possible to know how long market extremes may last, leaving the investor looking like a dill far longer than they might ever imagine.

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