Warren Buffett is well known as one of the best, if not the best, investors of all time. In addition, he’s also renowned for all the incredible advice he’s offered retail investors on how to pick stocks and buy for the long haul.
And while we have gained tonnes of valuable lessons from Buffett over the years, and there are several thoughtful quotes he’s offered on the subject of investing, there’s one quote that should always stick out in investors’ minds.
Especially in this market environment, with rapidly rising interest rates, inflation at 40-year highs, uncertainty in eastern Europe, and a pandemic that continues to produce new variants, there is sure to be more volatility on the horizon.
So, while I would encourage investors to learn a lot of the lessons Warren Buffett has taught us, and review some of his most famous quotes, here’s one of the most important, which you should always keep in the back of your mind.
“Be fearful when others are greedy and greedy when others are fearful”
It’s natural that the stock market is going to cycle. Ever since the first companies became publicly traded, and the first stock markets were created, market cycles occur often and happen naturally. Throughout Buffett’s long career of investing, he has seen numerous market corrections.
This has allowed Buffett to understand that predicting the long-term potential of stocks and the economy is much easier than trying to predict the short term. And because market pullbacks are always bound to happen again and are the best times to buy stocks, Warren Buffett uses this knowledge to his advantage.
In addition, what Buffett is better at than almost any other investor is being patient and having discipline, which is what his advice requires. So, as markets are reaching all-time highs and valuations become stretched, and the whole market looks greedy, Buffett will typically hold off buying and overpaying for stocks.
Yet when the market is selling off rapidly, and there is a tonne of fear in markets, that’s when Buffett will look to get greedy and buy stocks as cheap as possible.
This is why it’s one of his most important quotes and one to always keep in mind, especially today.
There’s no telling how the market will perform over the coming months, and there’s a strong possibility it could continue to sell off in the short term. But those investors who are disciplined and can keep a long-term mindset can use the opportunity to buy some of the best Canadian stocks while they’re cheap.
Be like Warren Buffett and buy high-quality stocks while they’re cheap
The key to Warren Buffett’s success and strategy is, of course, the fact that he eliminates his emotions and is highly disciplined and patient. However, it’s also paramount that investors are able to identify the best businesses to buy that can continue to grow their operations over the long haul.
That’s why one of the best Canadian stocks to keep your eye on today is Cineplex (TSX:CGX). Cineplex has a dominant business in Canada, and in recent years prior to the pandemic, it was working to diversify its operations, which it’s done well.
So, with the stock finally able to recover fully this year, as indoor capacity restrictions are being dropped, now may be the last chance to buy this high-quality company while it’s still ultra-cheap.
There may still be some fear from the market about whether another wave of the pandemic hits or fear about the potential recovery of the film sector after the pandemic. However, while this fear persists, as Warren Buffett would say, it’s time to consider being greedy.
So, if you believe Cineplex can recover and its share price can rally meaningfully, then, while the stock is still cheap, it’s certainly one of the best to buy now.
