Warren Buffett Will Try to Do This 1 Thing if the Sell-Off Continues

A market crash and sell-off carve out new opportunities for long-term investors. Buying BCE Inc. stock could be one such opportunity during the current sell-off.

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The long bullish streak of the stock market has finally ended with the crash happened last week. Many seasoned and big-time investors, including Warren Buffett, had seen it coming. He foretold the crash in his yearly letter to the shareholders of its business conglomerate Berkshire Hathaway in February. He predicted the drop of “perhaps of 50% magnitude or greater.”

The market crash has set off the sell-off run, making it difficult for companies to maintain stock prices. So, what will Warren Buffett try to do amid this selling off trend?

One of Buffett’s quotes hint at the strategy that one should opt for when a huge sell-off has been going on. He said, “Be fearful when the markets are greedy and greedy when the markets are fearful.” In other words, consider this sell-off as a buying opportunity and look for some great long-term investment avenues.

With the ongoing sell-off and bearish market trends, some stocks look like great buying opportunities. I am going to discuss one such stock here.

BCE

BCE (TSX:BCE)(NYSE:BCE), formally known as Bell Canada Enterprise, is the largest telecommunication company in the country. BCE is not just a regular telecommunication enterprise that solely takes care of mobile telephony operations. The company is also covering fixed-line operations, internet services, radio, TV broadcasting, and print media with its 17 subsidiaries.

This pervasive and robust market footing across the entire country, with around 22 million recurrent customers, suggests that its stock will come out stronger from the current market depression. As Warren says, any buyer who is not using borrowed money and making a long-term investment can make the most of a sell-off wave.

BCE is also a good long-term option to consider in current sell-off for its diversified nature of operations in terms of technology. Like the majority of telecommunication companies, BCE doesn’t just rely on wire-based services to generate revenue. As of today, nearly 37% of BCE’s yearly revenue is coming from wireless operations.

The tradition of maintaining a good balance sheet is another reason BCE could be the right choice for long-term holding. The telecom giant has the market capitalization of over $50 billion and is expected to maintain its revenue at $18.5 billion in the current fiscal year.

The stock performance also suggests that the stock can come out from the current turmoil stronger. BCE stock has grown by over 40% since 2015. The dividend yield currently stands at 5.07%. If you had invested $10,000 in BCE stock five years ago, you would have brought home over $14,000 without re-investing the dividend payouts.

In short, BCE stock is a great buying opportunity in the ongoing sell-off. By unearthing such sound investment options during the bearish phase of the market, you can build a robust investment portfolio in the long run.

Conclusion

A market crash followed by a sell-off is not always bad news. In fact, it sometimes creates excellent stock-buying opportunities. Warren Buffett has established this practice in his long-celebrated investing career. You can also follow in his footsteps to make the most of the current sell-off spree.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Jason Hoang has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Berkshire Hathaway (B shares) and recommends the following options: long January 2021 $200 calls on Berkshire Hathaway (B shares), short January 2021 $200 puts on Berkshire Hathaway (B shares), and short March 2020 $225 calls on Berkshire Hathaway (B shares).

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