Buffett’s speech at the 2020 Berkshire shareholder meeting about "stock prices plummeting by 50%" still feels like a top-notch tranquilizer to this day. 🧐

The old man's core logic at the time was very straightforward: as long as you are not borrowing money to speculate on stocks, and your assets themselves haven't deteriorated, you should remain unbothered in the face of a 50% decline.

This sounds easy, but the vast majority of people experience an instant collapse of psychological defenses when faced with a blood-red market. Buffett cited three instances in Berkshire's history where the stock was halved, and in those three downturns, the company itself had no issues; the market was simply going insane. Those who were forced out of positions either leveraged themselves too much and faced margin calls, or they were glued to the candlestick charts, surrendering their emotions to the mouths of others.

Returning to the current market, many people start shaking and want to cut losses when they see Democratic lawmakers openly shouting about wanting to "restrict the development of advanced AI," or even hinting at wanting to "prohibit artificial superintelligence."

Let’s clarify the logic and see if emotions have run rampant:

First, political grandstanding does not equal substantive prohibitions; the U.S. cannot simply hand over AI to China.

Politicians often shout "regulation" and "prohibition" in public, but most of the time this is just election rhetoric and a compliance posture. In the current context of major power competition, AI is no longer just a technical issue, but a core element of national security and productivity. If the U.S. were to truly tie its hands with a complete ban, it would be akin to handing over the leadership of the global AI and computing race to China. Interest groups, Silicon Valley giants, and Congress will not allow this to happen. Those calling for a "ban" will at most lead to some tug-of-war over subsequent compliance frameworks; it is impossible to completely stifle the foundation of technological development.

Second, the U.S. stock market is anchored in American core wealth; 401k pensions are a natural cushion.

Many people see a correction and feel it must "go to zero," which is a typical case of emotional premium. Let’s not forget that nearly 33% of American household wealth is tied up in the stock market, with a significant portion being 401k-type universal pension plans. The U.S. stock market has long been more than just a casino for chips; it is the foundational support for the entire national social security and capital operation mechanisms. Systemic collapse is not merely a financial issue but an unbearable burden on politics and society. Policymakers and the Federal Reserve understand this more clearly than ordinary retail investors; beneath the market lies a natural cushion and policy support logic.

Third, be greedy when others are fearful, provided you haven’t leveraged up.

Buffett said, "I don’t know if today is a good day to buy, but I know it will work out in 20 or 30 years."

The laws of the market have never changed: when good assets are trampled down to half their value due to sentiment, policy winds, or short-term liquidity shocks, it is precisely the best window for long-term capital to open positions.

As long as you hold physical assets, haven’t raised leverage, and aren’t borrowing money to gamble, your high-quality equities and core assets remain intact. What truly causes you to lose money is never the decline itself, but the moment you return your chips to the market with both hands in the midst of panic.

Keep a level head. When everyone is discussing the end of days, that’s when you should remain greedy and calmly pick up chips. Time stands with long-termists.

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