I’ve enjoyed the investing wisdom of Warren Buffett over decades. But who will future generations of shareholders look to for sensible, down-to-earth advice? Might Elon Musk take on that mantle?
If we listen to what some observers have been suggesting in response to his latest tweets, it might just be a possibility.
As CEO of Tesla and Spacex, and with his agreed offer for Twitter awaiting approval from regulators and shareholders, Elon Musk is certainly something of a high tech pioneer.
Warren Buffett, on the other hand, has been at the helm of Berkshire Hathaway since 1965. His focus has been far from the technology that excites Musk, sticking to boring stuff that he knows really well, like insurance.
Musk’s investing advice
But what of Musk’s recent tweets?
Elon Musk offered the advice: “Buy stock in several companies that make products & services that *you* believe in. Only sell if you think their products & services are trending worse. Don’t panic when the market does. This will serve you well in the long-term.”
There’s much there that strikes me as Buffett-like, and certainly in line with our approach to investing in shares here at The Motley Fool.
Right now, stock markets around the world have been behaving erratically. It’s mainly in response to the war in Ukraine, and to potential food shortages and soaring inflation. So what should we do? For one thing, I reckon it’s a good time to re-examine the best way to make long-term profits from investing in shares.
Sounds like Buffett
So, spread out investment money across companies that we really, personally, believe in? That sounds like obviously good advice to me. But many people often fail to follow it.
How many of us can honestly say we have never bought shares in companies we don’t much care about, but just because we saw them as cheap at the time? I’m guilty, though it is something I strive to avoid.
So yes, Musk’s approach fits in nicely with Buffett’s “Never invest in a business you cannot understand.”
Don’t panic
The bit about not panicking when the market does could have come straight from the Warren Buffett playbook too.
When otherwise rational folk are behaving fearfully and selling their shares too cheaply, it’s time to be greedy and buy. We only need to look back over the past couple of pandemic years to see that.
Those who sold when the market crashed potentially lost a lot of money. But those who were buying when shares were super cheap could now be sitting on nicely boosted portfolios.
Which is better?
So back to my opening question, is Elon Musk the new Warren Buffett? Despite his investing wisdom, I think the answer is actually a clear no. I admire both, but they’re very different investors. For me, stocks like Tesla and Twitter, or any tech shares on super high valuations, just don’t fit my profile.
Instead, I’m drawn to Buffett-style proven companies generating reliable cash flow and paying me sustainable dividends. Boring, yes. But with investing, I don’t like excitement.
I do still like to listen and learn, though. And Elon Musk’s latest advice hits the Foolish investing target for me.