"We believe that according the name 'investors' to institutions that trade actively is like calling someone who repeatedly engages in one-night stands a 'romantic.'"

Warren Buffett draws an analogy between calling frequent traders “investors” and describing someone who participates in a series of one-night stands as a “romantic.” His comparison hinges on the distinction between genuine, long-term commitment and fleeting, opportunistic engagement. True investors, in Buffett’s eyes, carefully evaluate businesses, commit their capital for an extended period, and patiently wait for value to accrue, much like a person who nurtures a meaningful relationship, building depth, trust, and lasting appreciation over time.

Conversely, institutions that actively trade, constantly buying and selling stocks within short intervals, focus on seizing short-term market movements. Their rapid buying and selling mimic the transactional, surface-level encounters implied by “one-night stands,” lacking enduring involvement or conviction about the underlying companies. Buffett suggests that labeling this fast-paced trading activity as “investing” dilutes the true meaning of the word. Investors, by his definition, make thoughtful, disciplined choices grounded in analysis of business fundamentals and a willingness to withstand market fluctuations. Their goal is to share in a company’s long-term prosperity.

The proliferation of so-called “investing” institutions that actually behave more like speculators not only misleads the public but also fosters a culture of short-termism. This mindset can dominate markets, influencing corporate decision-making and reinforcing volatility. Buffett’s analogy evokes suspicion toward financial actors who prioritize instant gratification, quick profits, over sustainable benefits and lasting value creation.

By highlighting this difference, Buffett encourages a return to the core principles of investing: patience, diligence, and a partnership mentality with the companies in which capital is placed. He urges market participants and observers alike to appreciate the profound gulf between speculation and investment and to reserve the term “investor” for those who actively pursue long-term wealth creation, rather than those who merely chase momentary gains.