Warren Buffett’s huge success as an investor has not come without its low moments.

In his 2017 letter to shareholders published on Saturday, the Berkshire Hathaway CEO detailed the most painful downturns the company’s share price has endured.

They include a 51 per cent decline from September 2008 to March 2009, during the financial crisis.

But a major lesson from the world’s third richest person (after Amazon’s Jeff Bezos and Microsoft’s Bill Gates) is his focus on the long-term.

In his much scrutinised annual letter, Buffett waxed poetic to illustrate the importance of keeping a cool head when markets are going haywire.

He picked out lines from “If” written by the British Nobel laureate Rudyard Kipling in 1895.

Berkshire Hathaway Class A shares over the past 37 years. (NYSE:BRK.A)
Berkshire Hathaway Class A shares over the past 37 years. (NYSE:BRK.A)

Buffett also said the drawdowns in Berkshire’s price were “the strongest argument” against ever borrowing money to buy stocks, since there’s no way to tell how far stocks can fall in a short period.

“No one can tell you when these [big declines] will happen,” Mr Buffett said.

“The light can at any time go from green to red without pausing at yellow.

‘”When major declines occur, however, they offer extraordinary opportunities to those who are not handicapped by debt.

“That’s the time to heed these lines from Kipling’s If:”

“If you can keep your head when all about you are losing theirs .. . If you can wait and not be tired by waiting . . . If you can think – and not make thoughts your aim . . . If you can trust yourself when all men doubt you… Yours is the Earth and everything that’s in it.”

You can read the full poem here.

Read Warren Buffett’s annual letter here.


This article first appeared on Business Insider Australia, Australia’s most popular business news website. Read the original article. Follow Business Insider on Facebook or Twitter.