Investors looking for inspiration during the current market crash should look no further than Warren Buffett.
Warren Buffett, CEO of US conglomerate Berkshire Hathaway, is arguably the most successful investor the world has ever seen. Since the age of 21, he has turned roughly US$10,000 into a US$72.7 billion fortune, according to Forbes, making him the world's third richest person.
How did he do it? I hear you ask.
While Buffett is considered the world's savviest investor, much of his success is attributed to his ability to master his emotions.
Indeed, that is one of the key elements to becoming a successful investor, and is often what separates those who make a fortune in the sharemarket from those who endure horrendous losses.
Buffett's attitude during the 2008-09 Global Financial Crisis was a perfect example of this. While others were frantically selling into the wide-scale panic, desperate to limit their losses, Buffett kept his eye on underlying businesses which he considered to be high quality by nature and bought them.
Some of these deals included Mars, Goldman Sachs, General Electric, Dow Chemical and Bank of America. According to an article from The Sydney Morning Herald back in October 2013, Buffett had reaped an incredible US$10 billion from his US$26 billion worth of investments during the early stages of the crisis.
Fast forward two years, and Buffett is once again licking his lips at the opportunities on offer.
The Australian Financial Review quoted Buffett, dubbed the Oracle of Omaha, as saying "Down days I like because we buy them cheaper."
In fact, his company even increased its stake in IBM in August, while it also made a strategic investment in Insurance Australia Group Ltd (ASX: IAG) in June, marking its entry into the Australian share market.
Like anybody else in the market, Buffett has no idea what the market will do in the short term. But as always, he is confident it will rise in the long term, making now an excellent time to stock up on high-quality corporations.
The AFR quoted him as saying: "I've never been any good at (predicting short-term movements)… If we're thinking about where they're going to be in five or ten years, I'm confident they will be considerably higher."
That's the same attitude that long-term, 'Foolish' investors are taking right now.
Instead of selling into the panic, they're either holding on for the ride or buying great companies at down-and-out prices.
In my opinion, companies such as SEEK Limited (ASX: SEK) and Veda Group Ltd (ASX: VED) have looked particularly compelling in recent times, as has Collection House Limited (ASX: CLH) – the latter I already own.
Just as Warren Buffett has vowed to do, it is always wise to keep some cash on hand in case things do get worse. Or if you need to fix your car or pay an over-sized bill. Or even if it's to take advantage of share prices should they fall even further over the coming months.
But now could be an exceptional time to begin buying. Your future self will likely thank you for it.
