In the early months of the COVID-19 market crash, Warren Buffett laid low. Making few public appearances, he played his cards close to his chest. When he eventually did make a statement at his annual meeting, he revealed that he had been a net seller of stocks in the first quarter. It was an unusually bearish stance for Buffett to take. Investors were used to Buffett being the first to jump in and “buy the dip” during market crashes. So, his first-quarter moves were dismaying to say the least.
Now, however, Buffett seems to have reversed course. Having survived the “economic typhoon” of COVID-19, he’s back to buying stocks. In the second quarter, Buffett made waves by buying back Berkshire Hathaway stock and betting big on Bank of America. His Berkshire share repurchase was worth over $5 billion — some say as much as $7 billion — and he’s so far put $1.7 billion into BoA. Basically, Buffett thinks that NOW is the time to invest and get rich.
Why Buffett is finally investing now
Shortly after the COVID-19 market crash began, Warren Buffett’s business partner Charlie Munger gave an interview. In it, he described the COVID-19 market crash as a “typhoon” and said that he and Buffett were trying to survive it with a lot of liquidity intact. It made sense.
At the time, financial markets were being rocked by non-financial factors. Nobody could have known how the pandemic would ultimately impact the business world. Now, the situation is becoming much clearer, and stocks are rocketing forth to new highs.
A Canadian stock Buffett likes
If you think — like Buffett seems to — that now is the time to invest and get rich, you could always buy Berkshire Hathaway stock. The entire company is built on Buffett’s investing philosophy, after all, making it the perfect way to emulate his strategy.
Formed by the merger of Tim Hortons and Burger King, it is a true fast-food giant. Since it was formed, QSR has gone on to acquire the fried chicken chain Popeyes, which has become its biggest growth driver.
In fact, Popeyes proved to be QSR’s ace in the hole in the second quarter. While Burger King’s and Tim Hortons’s sales both declined in the quarter, Popeyes saw revenue growth of 24% year over year. This helped prevent the company from seeing catastrophic results during a period where COVID-19 lockdowns were rampant.
In the second quarter, QSR’s revenue declined only 25%, which is pretty good for a fast-food company during Q2. Earnings were down more, but the company didn’t lose money. These results weren’t great but QSR seems set to bounce back when the pandemic is over. So, now could be a good time to buy, while the stock price is still historically low.
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Fool contributor Andrew Button has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Berkshire Hathaway (B shares). The Motley Fool recommends RESTAURANT BRANDS INTERNATIONAL INC 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 September 2020 $200 calls on Berkshire Hathaway (B shares).