Warren Buffett? Peter Lynch? Allan R. Stuart? Anonymous?
(1) Don’t pull your flowers and water your weeds.
(2) You shouldn’t cut your flowers and water your weeds.
(3) Be careful you don’t pick your flowers and water your weeds.
(4) Don’t garden by digging up the flowers and watering the weeds.
This saying has been attributed to super-investor Warren Buffett and successful fund manager Peter Lynch. Would you please explore this topic?
Reply from Quote Investigator: In 1989 Peter Lynch with John Rothchild published “One Up On Wall Street: How To Use What You Already Know to Make Money in the Market”. The book warned against flawed investment strategies. Boldface added to excerpts by QI:[ref] 1989, One Up On Wall Street: How To Use What You Already Know to Make Money in the Market Peter Lynch with John Rothchild, Chapter 16: Designing a Portfolio, Quote Page 245, Simon and Schuster, New York. (Verified with scans) [/ref]
Some people automatically sell the “winners”—stocks that go up—and hold on to their “losers”—stocks that go down—which is about as sensible as pulling out the flowers and watering the weeds. Others automatically sell their losers and hold on to their winners, which doesn’t work out much better. Both strategies fail because they’re tied to the current movement of the stock price as an indicator of the company’s fundamental value.
QI believes that the modern versions of this adage evolved from Lynch’s statement.
Below are additional selected citations in chronological order.
This figurative language has a long history. In 1913 the “Abilene Daily Reflector” of Kansas published the following item which used the simile “like watering the weeds”:[ref] 1913 June 16, Abilene Daily Reflector, (Filler item), Quote Page 2, Column 1, Abilene, Kansas. (Newspapers_com) [/ref]
Bemoaning the fate of your town is like watering the weeds in the garden.
In 1978 an advertisement for a herbicide in a Texas newspaper used the phrase “watering your weeds” with a literal sense:[ref] 1978 May 28, The El Paso Times, You can’t kill a weed by watering it! (Advertisement for HERBI Micron West Incorporated, Houston, Texas), Quote Page 6C, Column 2, El Paso, Texas. (Newspapers_com) [/ref]
Stop watering your weeds. Start killing them.
In 1986 church minister Allan R. Stuart of Clearwater, Florida published a newspaper advertisement which used the following expression as the title of a forthcoming sermon:[ref] 1986 August 16, St. Petersburg Times, (Advertisement for North Bay Community Church of Clearwater, Florida with Minister Allan R. Stuart), Quote Page 8B, Column 6, St. Petersburg, Florida. (Newspapers_com) [/ref]
Sermon: “DON’T WATER YOUR WEEDS”
In 1989 Peter Lynch included a version of the adage in his book “One Up On Wall Street” as mentioned previously:[ref] 1989, One Up On Wall Street: How To Use What You Already Know to Make Money in the Market Peter Lynch with John Rothchild, Chapter 16: Designing a Portfolio, Quote Page 245, Simon and Schuster, New York. (Verified with scans) [/ref]
Some people automatically sell the “winners”—stocks that go up—and hold on to their “losers”—stocks that go down—which is about as sensible as pulling out the flowers and watering the weeds.
Peter Lynch’s book also contained a shorter summary statement:[ref] 1989, One Up On Wall Street: How To Use What You Already Know to Make Money in the Market Peter Lynch with John Rothchild, Chapter 20: 50,000 Frenchmen Can Be Wrong, Quote Page 292, Simon and Schuster, New York. (Verified with scans) [/ref]
If you take anything with you at all from this last section, I hope you’ll remember the following: . . .
You won’t improve results by pulling out the flowers and watering the weeds.
In February 1989 Warren Buffett sent his annual letter to the shareholders of Berkshire Hathaway concerning the performance of the conglomerate during the previous year. Buffett employed a version of the saying in which the flowers were cut instead of being pulled. Buffett credited Lynch:[ref] 1989 February 28, Title: 1988 Shareholder Letter for Berkshire Hathaway Letter To: Shareholders of Berkshire Hathaway Inc, Letter From: Warren E. Buffett, Chairman of the Board (Accessed berkshirehathaway.com on July 16, 2022) link [/ref]
In fact, when we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever. We are just the opposite of those who hurry to sell and book profits when companies perform well but who tenaciously hang on to businesses that disappoint. Peter Lynch aptly likens such behavior to cutting the flowers and watering the weeds.
In March 1989 the “Omaha World-Herald” of Nebraska printed an article discussing Buffett’s letter. The newspaper reprinted the saying:[ref] 1989 March 23, Omaha World-Herald, Section: Business, 1988 Report Mixes Business, Baseball, Quote Page 36 Omaha, Nebraska. (NewsBank Access World News) [/ref]
Buffett wrote that Berkshire expects to hold these securities for a long time. “Our favorite holding period is forever.”
That is the opposite of those “who hurry to sell and book profits when companies perform well but who tenaciously hang on to businesses that disappoint. Peter Lynch aptly likens such behavior to cutting the flowers and watering the weeds.”
In 1991 “The Index-Journal” of Greenwood, South Carolina attributed an instance of the saying to Lynch:[ref] 1991 October 13, The Index-Journal, Financial Advisor – The 10 Commandments for Investing by Curtis D. Keller, Quote Page 6B, Column 6, Greenwood, South Carolina. (Newspapers_com) [/ref]
Cut your profits and let profits run. This sounds so simple but it sometimes goes against human nature. Peter Lynch, former manager of the Magellan Fund, said it best: “Most people water the weeds and cut the flowers — when they should do just the opposite.
In 1993 a syndicated column from Scripps Howard News Service another instance to Lynch:[ref] 1993 October 9, The Salina Journal, Evaluation of management crucial in selecting mutual funds by Frank A. Jones (Scripps Howard News Service), Quote Page 15, Column 1, Salina, Kansas. (Newspapers_com) [/ref]
However, Peter Lynch, noted fund manager, once said, “Selling companies that are doing well and purchasing ones that are faring poorly is like watering the weeds and cutting the flowers.”
In 1995 a columnist in the “News Messenger” of Marshall, Texas presented “eight timeless rules” for investing in the stock market. This was number six:[ref] 1995 September 17, News Messenger, Timeless rules for equity investors by Bob Smith, Quote Page 2D, Column 4, Marshall, Texas. (Newspapers_com) [/ref]
Don’t cut your flowers and water your weeds. Don’t sell a stock simply to take a profit, and don’t keep a stock simply because it was once attractive. If the investment no longer meets your investment goals, cut your losses and move on.
In 2017 an article on the CNBC website referred to an interview “Forbes” magazine had conducted with Peter Lynch during which the celebrated fund manager recounted a conversation with Warren Buffett from many years earlier:[ref] Website: CNBC, Article title: How Warren Buffett taught this legendary investor the value of making mistakes, Article author: Zameena Mejia, Date on website: October 17 2017, Website description: Business and investing news and analysis.(Accessed cnbc.com on October 25, 2012) link [/ref]
Buffett told Lynch that he loved his new book “One Up on Wall Street,” in which Lynch explains his investment style and how it can help others succeed.
“I want to use a line from it in my year-end report. I have to have it,” Buffett said. “Can I please use it?”
“Sure. What’s the line?” Lynch asked.
The line Buffett wanted to quote was this: “Selling your winners and holding your losers is like cutting the flowers and watering the weeds.”
In conclusion, Peter Lynch coined this figurative investment advice in his 1989 book “One Up On Wall Street”. Warren Buffett used a version of the saying, but he credited Lynch. The phrasing has evolved over time to produce multiple variants.
Image Notes: Public domain image of painting by Childe Hassam titled “The Water Garden” circa 1909. Accessed via Wikimedia Commons.
(Great thanks to Barry Ritholtz who told QI via email in 2021 that he had interviewed Peter Lynch and learned that Warren Buffett had obtained this saying from Lynch. QI was inspired to formulate this question and perform this exploration.)