Warren Buffett is perhaps the greatest investor in the world.
He has kindly spent most of his life sharing his investment knowledge for free with the world. Many people don't like following his (or Charlie Munger's) advice because it's too basic and they don't have enough patience.
There are a number of things that he has said in the past that is influencing my investing today:
"Anything can happen"
Hanging on the walls in Berkshire Hathaway's office are old newspapers with headlines on days during painful economic times. As an example, one of those newspapers is from 1929 when share prices collapsed which started the Great Depression. He was actually born during that time. Warren Buffett says he likes them there to remind him that anything can happen.
I'm certainly not saying that coronavirus is going to start a depression. I think it's a good reminder to know that the share market will go through these big bumps very occasionally. But historically the share market eventually recovered after a few months or a few years.
"Buy American. I am"
Over a decade ago Warren Buffett wrote a piece in the New York Times. He said that financial problems were leaking into the general economy, that business activity would falter and that headlines will continue to be scary.
But a simple rule dictated his buying: "Be fearful when others are greedy, and be greedy when others are fearful."
Indeed, his comments in the article could definitely be applied to today's share market situation: "And most certainly, fear is now widespread, gripping even seasoned investors. To be sure, investors are right to be wary of highly leveraged entities or businesses in weak competitive positions. But fears regarding the long-term prosperity of the nation's many sound companies make no sense. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now… I haven't the faintest idea as to whether stocks will be higher or lower a month or a year from now. What is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up. So if you wait for the robins, spring will be over."
He was brave during through the turbulent times and it paid off strongly after a few years.
Rule 1: Never lose money
And rule number 2: Don't forget rule number 1.
This isn't the time to be going after businesses with risky balance sheets in my opinion. I like to invest in shares that are likely to stand the test of time, or at least a decade. Some of the shares that I want to hold in my portfolio for many years to come that could be solid buys today are: Altium Limited (ASX: ALU), Magellan Global Trust (ASX: MGG), WAM Microcap Limited (ASX: WMI) and Future Generation Investment Company Ltd (ASX: FGX).
Shares that I don't own but I think could be solid long-term buys are Brickworks Limited (ASX: BKW), APA Group (ASX: APA), Cleanaway Waste Management Ltd (ASX: CWY) and REA Group Limited (ASX: REA).
