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Warren Buffett Just Signaled a Big Stock Market Rally in 2021

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The Canadian stock market has started February on a solid note. In the first four days of the month, the S&P/TSX Composite Index has risen by 4.1% after ending January with minor 0.6% losses. The overall better-than-expected corporate earnings, improving employment, and private payroll data in the United States point towards a strengthening economy. At the same time, the recent positive trends in the Canadian property market look encouraging.

Warren Buffett remains optimistic

Berkshire Hathaway’s chairman and CEO Warren Buffett continues to be optimistic about the economy. During the company’s annual shareholders meeting, he said, “nothing can basically stop America,” despite the COVID-19-related setbacks. Notably, Berkshire Hathaway decided to exit the airline industry. However, Buffett’s investment firm is continuing to hold many fundamentally good, rallying stocks like Apple (NASDAQ:AAPL) and Amazon.com.

While a handful of industries — including airlines and travel — could continue to face difficulties this year due to prolonged COVID-19-related restrictions, other industries like tech and energy have already started showing signs of faster-than-expected recovery.

This explains why Buffett decided to dump airline stocks last year. But at the same time, he appears to be confident of a continued strong rally in the shares of companies that did well (like Apple and Amazon) last year.

Which stocks to buy

The 90-year-old investing legend always makes investments from a long-term perspective. This strategy largely keeps his overall investment portfolio safe from the negative impacts of economic cycles. So, if you wish to make money out of the market with minimal risks consistently, try to invest for the long term like Buffett.

In the last few years, Buffett has changed his opinion about the tech industry. That’s the reason why Apple is Berkshire Hathaway’s largest single holding today.

Apart from its extraordinary profitable tech lineup, Apple is now focusing on entering the fast-growing electric and autonomous car market. According to a recent CNBC report, Apple could soon finalize a deal with the South Korean automaker Hyundai-Kia to produce Apple Car.

With this, Apple — which recently reported over US$100 billion quarterly revenue — seemingly wants to benefit from the surging demand for electric cars and smart mobility.

Here’s a Canadian company raising its stake in the electric vehicle and mobility segments like Apple. Buying its stock for the long term will allow you to benefit from the auto industry trend that Apple is running after.

BlackBerry stock

BlackBerry (TSX:BB)(NYSE:BB) is a Canadian enterprise software developer that has become a key player in the automotive segment in the last few years. The company’s QNX real-time operating system is used by most large carmakers worldwide. These top car companies include General Motors, Ford, BMW, Maserati, Porsche, Mercedes-Benz, and Toyota, among others.

Now, BlackBerry is readying to expand its automotive segment offerings significantly. It recently started developing an integrated vehicle data platform to help automakers access vehicle sensor data in real time. Such platforms would play a key role in enhancing the functionalities of electric and autonomous cars.

Also, BB’s management is eyeing the world’s largest car market. The company in January expanded its partnership with the Chinese tech giant Baidu. Under this partnership, BlackBerry’s operating system with Baidu’s high-definition maps will be used in mass-produced electric cars in China.

Foolish takeaway

While you might have already missed a rally in most Buffett stocks, you still have a chance to invest your hard-earned money where he’s investing. I believe the electric and autonomous car market’s outstanding future growth prospects are really attractive. You may want to include BlackBerry stock in your portfolio before it’s too late.

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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.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. David Gardner owns shares of Amazon, Apple, and Baidu. Tom Gardner owns shares of Baidu. The Motley Fool owns shares of and recommends Amazon, Apple, and Baidu. The Motley Fool recommends BlackBerry and BlackBerry and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. Fool contributor Jitendra Parashar has no position in any of the stocks mentioned.

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