I think there is one person who probably was not disturbed by the Covid-19 pandemic. Well, in terms of investments, I mean. And that’s Warren Buffett. He urges investors to buy with a long-term horizon, urging us to “”Only buy something that you would be perfectly happy to keep if the market closed for 10 years“.
Wouldn’t it have been great if the UK stock market had closed in January 2020? No one would have suffered a loss when their stock price collapsed – without a market there would be no stock price, so no fall. Then, with the pandemic behind us, the London Stock Exchange could reopen its doors, and the FTSE 100 could continue as usual. And it wouldn’t take 10 years. No, we are less than a year and a half away and UK stock prices already look much stronger.
But wait. For my part, I am very happy that the markets did not close in a misguided attempt to protect us from short term losses. The thing is, I didn’t suffer any loss. Of course, some of the stocks I own have fallen in price. But most of them have already recovered. And there is another tip from Warren Buffett that I used to make up for the rest.
Warren Buffett’s Gold
Here’s the quote I’m thinking of: “Opportunities rarely present themselves. When it’s raining gold, take out the bucket, not the thimble“. I saw the past year and more as a long opportunity. An opportunity to buy good stocks at a low price. That’s what I did, and the gains I’ve already made from my new purchases are enough to cover what’s left of those existing drops. Now I didn’t have huge amounts to invest. Just modest amounts, every few months. And I put the money in the same ones. stocks that I would have bought anyway.
I still see a lot of golden opportunities that Warren Buffett talks about. Some UK stocks have recovered well, but I think they are still far from a reasonable long-term valuation. Some are still depressed, and some of them are really struggling and I think should be avoided. But there are sure to be some great stocks that are still cheap right now.
My favorite lesson
A final thought from Warren Buffett: “You only have to do very little in your life as long as you don’t do too many things wrong“. In my opinion, if I had sold my shares after the stock market crash, I certainly would have done something wrong. Avoiding this mistake has probably done me a lot more good than any of my decisions. ‘purchase.
This is the key lesson that I am taking forward. Doing things well is good. But not doing it wrong is even better. And I will definitely remember that the next time there is a stock market crash, it will rain gold in the form of cheap stocks again.
The post that I would follow Warren Buffett’s lead to buy the best UK stocks has now appeared first on The Motley Fool UK.
Alan Oscroft has no position in any of the stocks mentioned. The Motley Fool UK has no position in any of the stocks mentioned. The opinions expressed on the companies mentioned in this article are those of the author and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. At The Motley Fool, we believe that considering a wide range of ideas makes us better investors.
Motley Fool United Kingdom 2021