Why doing nothing is the hardest—and smartest—investing skill

Subscribe to enjoy similar stories. Thirty-five years ago, in a lecture at Stanford Law School, Warren Buffett made an observation that has only grown more relevant with time. "Activity is the mother's milk of Wall Street," he said.

“People have this whole different attitude just because there's a little number up there flashing around all the time. It makes them think they have to do something." Think about that for a moment. The very feature that makes stock markets convenient - the ability to buy or sell at any moment - has been twisted into a psychological trap.

The flashing ticker, designed to inform, has become a command to act. Most investors have inverted the relationship entirely. They believe the market is instructing them, when in reality it exists merely to serve them.

This explains a great deal about why ordinary investors struggle to build wealth even during extended bull markets. They mistake activity for productivity. They confuse motion with progress.

Every price movement feels like it demands a response, every piece of news like a call to action. The result is a kind of financial restlessness that benefits everyone except the investor. Buffett's solution sounds almost heretical in today's hyperconnected world.

"People would be way better off if they closed the stock exchange down periodically," he suggested. When his students asked about the constant opportunities to buy or sell major companies, he was blunt: “Most people feel that because all those opportunities to make those decisions are there, they should make the decision. That we don't do." The wisdom here is counterintuitive.