The Motley Fool

Stock Market Crash: Here’s Why Warren Buffett Isn’t Afraid

The World Health Organization (WHO) officially declared the coronavirus as a pandemic on March 11, 2020. Global stock markets are crashing as the number of confirmed cases crosses the 120,000 mark.

A significant downturn was always on the cards throughout 2019, but nobody knew when it would happen. The outbreak of the COVID-19 is proving itself to be the catalyst.

The U.S. Federal Reserve made its first emergency rate cut on March 3, 2020. Central banks worldwide are following suit to save their respective economies. While you should be concerned about the safety of yourself and your families, it is also reasonable to be afraid about your financial well-being.

Oracle of Omaha standing firm

The virus is placing enormous pressure on stocks, and investors are fearful. Warren Buffett, the Oracle of Omaha, is still advising people not to buy or sell in a panic. The world’s most successful investor is urging investors to stick to long-term goals.

Buffett is not afraid of the ensuing market crash. He believes his investments will do well as the dust settles and stock markets recover. The billionaire invests primarily in American businesses, yet there are two Canadian businesses in which he has a significant stake.

Today I’m going to take a quick look at both the Restaurant Brands International (TSX:QSR)(NYSE:QSR) stock and Suncor Energy Inc. (TSX:SU)(NYSE:SU) stock. Perhaps this will help you understand why you should hold on to shares of both businesses during the market meltdown like Warren Buffett himself.

Restaurant business

Restaurant Brands International is an intelligent stock to consider in a challenging financial environment. RBI is the operator of three of the world’s largest fast-food chains, Burger King, Tim Hortons, and Popeye’s. With more than 27,000 restaurants in over 100 countries worldwide, the restaurants annually deliver $32 billion in sales.

As the stock markets plunge, the RBI stock is down by almost 30% at writing year to date. Where some investors might consider selling off their shares, Warren Buffett advises holding on long-term.

RBI is likely to continue growing even if the coronavirus temporarily hinders its growth. Trading for $59.31 per share, RBI pays its shareholders dividends at a juicy 4.67% yield.

Energy business

The other Canadian business that Warren Buffett almost owns a complete 1% of is Suncor. The Canadian energy sector operator was already witnessing a slightly rough time due to falling oil prices in 2019.

The coronavirus outbreak has made things worse for the company. At writing, the stock is down by more than 50% year to date.

Trading for $20.55 per share, the Suncor stock is nosediving into the meltdown category, but the Oracle of Omaha is unperturbed. Buffett’s long-term outlook sees Suncor being a profitable investment.

In the last couple of years, the Canadian energy giant generated more than $10 billion annually from its operations. Its integrated business model allows Suncor more resilience compared to others in the industry.

Suncor is a resilient business. A Canadian Dividend Aristocrat, it’s paying its shareholders a dividend of a phenomenal 9% due to rapidly falling share prices.

Foolish takeaway

Warren Buffett is not afraid of the stock market crash due to his investments in businesses that can endure the crash. He does not treat stocks as mere equities. Rather, he purchases shares based on the fundamentals of the underlying businesses.

RBI and Suncor, along with his American stock picks, are companies likely to make him wealthier as the stock markets recover.

5 TSX Stocks for Building Wealth After 50

BRAND NEW! For a limited time, The Motley Fool Canada is giving away an urgent new investment report outlining our 5 favourite stocks for investors over 50.

So if you’re looking to get your finances on track and you’re in or near retirement – we’ve got you covered!

You’re invited. Simply click the link below to discover all 5 shares we’re expressly recommending for INVESTORS 50 and OVER. To scoop up your FREE copy, simply click the link below right now. But you will want to hurry – this free report is available for a brief time only.

Click Here For Your Free Report!

Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends RESTAURANT BRANDS INTERNATIONAL INC.

I consent to receiving information from The Motley Fool via email, direct mail, and occasional special offer phone calls. I understand I can unsubscribe from these updates at any time. Please read the Privacy Statement and Terms of Service for more information.