The Motley Fool

What Warren Buffett thinks about the coronavirus share market crunch

The coronavirus continues to cause havoc on the share market with a fall of more than 2% expected on the ASX when the market opens.

Unsurprisingly, a lot of investors are getting very nervous about what this means. Particularly because it now seems to be spreading in three global regions outside of China; South Korea (the rest of Asia), Iran (the Middle East) and Italy (Europe).

Except for the cases in Iran, I wouldn’t be surprised that the coronavirus is a bit more widespread than what officials are seeing because only South Korea and Italy are actively looking for it.

What does it mean for shares?

Well, a number of shares have already announced there has been or will be some disruption. Apple has been the biggest business to admit there will be a material negative hit.

A range of Australian shares have announced coronavirus effects like Cochlear Limited (ASX: COH), Altium Limited (ASX: ALU), Webjet Limited (ASX: WEB), WiseTech Global Ltd (ASX: WTC) and Qube Holdings Ltd (ASX: QUB).

Those specific shares suffered sell-offs, but the rest of the market is also experiencing some painful days now.

What’s Warren Buffett’s thoughts on it?

Warren Buffett is one of the world’s best investors and one of the wisest too. He invests for the long-term in businesses, he isn’t looking to buy or sell based on the headlines of today.

However, in a very recent interview with MSNBC he said that wasn’t going to be selling shares because of this. He isn’t going to change what he does with stocks. However, he thinks the coronavirus is scary because of the human side of things, particularly for an old person like him!

He said that the value of a business, when you look out to five years or ten years, isn’t changed by what’s happening now or in the next few weeks. He doesn’t buy or sell based on today’s headlines – he buys when he sees an opportunity!

Warren Buffett famously said that he was going to buy shares, and other people should too, whilst the GFC was going on. When you look at what happened since then, he was definitely right!

I agree with him now. The coronavirus could be bad for the elderly’s health, it’s causing disruption to supply chains, there is no sign of it slowing yet, it’s causing fear in the market and it’s giving us the best prices for shares that we’ve seen in some time.

Buying shares when they’re expensive and selling when they’re cheaper doesn’t seem like a good strategy to me. I’m looking to buy shares right now and will keep buying through the volatility in the coming weeks. It’s times like this where I’m glad I’m only invested in businesses I’d be happy to hold if prices were to fall and there were to be an economic dip.

NEW. The Motley Fool AU Releases Five Cheap and Good Stocks to Buy for 2020 and beyond!….

Our experts here at The Motley Fool Australia have just released a fantastic report, detailing 5 dirt cheap shares that you can buy in 2020.

One stock is an Australian internet darling with a rock solid reputation and an exciting new business line that promises years (or even decades) of growth… while trading at an ultra-low price…

Another is a diversified conglomerate trading over 40% off its high, all while offering a fully franked dividend yield over 3%...

Plus 3 more cheap bets that could position you to profit over the next 12 months!

See for yourself now. Simply click here or the link below to scoop up your FREE copy and discover all 5 shares. But you will want to hurry – this free report is available for a brief time only.


Tristan Harrison owns shares of Altium. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Cochlear Ltd. The Motley Fool Australia owns shares of Altium and WiseTech Global. The Motley Fool Australia has recommended Cochlear Ltd. and Webjet Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.