Is Buffett buying the dip?
Global markets took steep dives last week with seven consecutive days of losses incurred on the S&P500 creating a proverbial bloodbath on the boards. But despite these market losses, investors would be wise to remember some of Warren Buffett’s truisms which explain how he has amassed the extensive wealth he has.
Whilst Buffett himself admits he has had the assistance of luck over the years, his investment strategy is rock solid and something he continually reverberates through his annual letters to shareholders.
We only need to rewind the clock back to 2004 when global markets were booming, money grew on Wall Street trees, and the world were oblivious to the ticking time bomb which we’d soon know as the Global Financial Crisis.
In his 2004 letter to shareholders, Buffett advised:
“Investors should remember that excitement and expenses are their enemies. And if they insist on trying to time their participation in equities, they should try to be fearful when others are greedy and greedy only when others are fearful.”
Fast-forward to September 15, 2008 and the Oracle of Omaha was cool as a cucumber despite his investments hemorrhaging losses as hedge funds sold off in droves with retail investors following suit.
Lives were ruined for an unfortunate mass but in times of fear, Buffett remained vigilant.
Casually picking up stock when others dare not, Buffett invested $26 billion USD in six investments which included Goldman Sachs, Bank of America, Mars, Swiss Re, Dow Chemical, and General Electric.
By 2013, those GFC investments had delivered more than $10 billion in returns and evidenced why Berkshire Hathaway outperforms the wider market, decade-after-decade.
Taking those lessons into account, the short-lived sea of red suggested that if Buffett wasn’t buying up stock themselves, others were certainly taking note of his advice because, “When downpours occur, rush outdoors carrying washtubs, not teaspoons.”
One way of gaining international exposure to Buffett’s investing strategy is via his hugely successful company – Berkshire Hathaway. Excitingly, we currently have an investment opportunity open that does just that – Click here to find out more.
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