• Matt Morizio

What would Warren Buffett do, COVID-19 edition?

Updated: Apr 10

What the heck should you do with your money during these chaotic times?

Instead of giving you the all-too-common “take my word for it” type of advice, I did what I like to do in times of uncertainty. I observed what the best in my craft do and learned from them.

So I looked up some of Warren Buffet’s biggest winners (this article from investing.com was really helpful), and what I found was eye opening.

Here are my biggest takeaways from my research:

  • Buffet makes BIG MOVES in individual stocks, NOT FUNDS

  • He makes these big bets during SCARY, CHAOTIC times

  • He was NEVER PERFECT in his timing - he never hit the exact bottom or top, but he has an uncanny knack to capture the meat of a run up

  • He has remarkable staying power and clearly DOESN'T SELL ON EMOTION or price - check Coca Cola’s roller coaster ride below as an example

After doing my homework for this blog, I’m more convinced than ever now might be one of the greatest investment opportunities of our lives.

For those that have money on the sidelines "waiting for your time to capitalize," YOUR TIME HAS COME. Quit being a spectator and get in the game. There is a lot of money to be made!

There are doorbuster sales in the market right now, and unlike other market crashes where we don’t understand the cause of the crash until well into the decline, we know the culprit of this one, COVID-19. So, once the virus is under control, it stands to reason the market will recover in time.

Nobody, I repeat nobody, can predict when or how long the recovery will be, but what we know today is that prices are tremendously discounted.

As an old-school baseball coach, Bill Fischer, once told me, "Believe what you see, not what you think."

Note: The investing.com article was written a short time ago, so the returns aren’t exact, but the point is still clear that Buffett makes big moves in the middle of uncertainty.

Investment, Date: Goldman Sachs, Sept 2008

Return: $5B to $5.64B + 13 million shares for free

Sold: Still owns it

Context: Bought in the heart of the 2008 banking meltdown

Investment, Date: Bank of America, Aug 2011

Return: $5B to $14.2B return

Sold: Still owns it

Context: BofA was down 58% that year, struggling to rebound from 2007-09 recession, and Buffett bought them 2 weeks after two terrible trading days, Friday and “Black Monday” of 2011 where markets dropped over 10%.

Investment, Date: Freddie Mac, Dec 1988

Return: $4 per share to $70 per share

Sold: 2000

Context: Buffett bought a significant portion of Freddie Mac in the midst of the Savings and Loans crisis of the 80’s…not to mention in the wake of Black Monday of 1987 where the market dropped over 20% in a day.

Investment, Date: Coca-Cola,1988

Return: $1.3B to $19B

Sold: Still owns it

Context: Coca Cola was hurting after Black Monday in 1987, precisely the time that Buffett bought a 6% stake in the company.

Investment, Date: Petrochina, 2002

Return: $488M to $3.6B

Sold: Oct 2007

Context: Bought in late 2002...remember 9/11/01? Market crushed, airlines crushed, oil/gas crushed, and Buffett makes moves on a Chinese oil/gas company.

Investment, Date: BYD (battery company), late 2008

Return: $230M to $1.8B

Sold: Still owns

Context: Bought in the midst of '08 crash

Investment, Date: Wells Fargo, 1990

Return: $290M to $27B

Sold: Still owns

Context: From Buffett’s letter to shareholders, 1990: “Our purchases of Wells Fargo in 1990 were helped by a chaotic market in bank stocks. The disarray was appropriate: Month by month the foolish loan decisions of once well-regarded banks were put on public display. As one huge loss after another was unveiled -- often on the heels of managerial assurances that all was well -- investors understandably concluded that no bank's numbers were to be trusted.” ....so he invested in a bank.

We are in the middle of world chaos right now.

And as Buffett has proven over the last 4+ decades, chaos breeds opportunity. Time to take advantage of the tremendous opportunity at our doorstep!

We at Beck Bode see the world like Buffett - growth that separates you from the pack comes from owning individual companies, not funds.

And we see these times as a TREMENDOUS opportunity for investors.

If you want to schedule a call with me to discuss investing, here is a link to get on my calendar.

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Investment advice offered through Beck Bode, LLC, a fee-only Registered Investment Advisor in the Greater Boston area.