Interviewer (George Goodman): I have noticed in your annual report, you say that if you are in a poker game for 30mins and you don’t know who the patsy is, you are the patsy.
Buffett: you got it
Interviewer: how do you apply that to the market, to investing?
Buffett: \\\[…\\\] If you think the market knows more about what your business is, in other words, if your stock goes down 10% and that upsets you, it obviously means that you think the market knows more about the company than you do and in that case you are the patsy.
If it goes down 10% and you want to buy more because you know the business is worth just as much as when you bought it before, perhaps a little bit more with the passage of time, so you buy more, \\\[then\\\] they are the patsy.
Source: Buffett 2nd interview on Adam Smith’s World (1988)
https://youtu.be/j6niTA1AMws?si=\\\_5L\\\_2V9hfyLwnGrV