Warren Buffet is renowned as one of the greatest investors of all time. Since he took the helm at Berkshire Hathaway in 1965, his investments have generated an average annual return of 20% – double that of the S&P 500.
While not all the Oracle of Omaha’s stock picks have delivered blockbuster returns, there’s certainly plenty of valuable advice he has offered along the way. Here are two pieces I’m using when buying stocks today.
Seize opportunities
It’s no secret that global markets have taken a beating this year. Inflation has spiked globally. And with it reaching near 10% in the UK and US, investor confidence has been knocked.
However, I don’t think Buffett would be concerned about this. As he once said: “Be greedy when others are fearful.” And, as such, I think the large fall we’ve seen in some good companies presents an opportunity to get in cheap.
Long-term vision
As with all stocks I invest in, I like to think long term.
As the man says himself: “If you don’t feel comfortable owning a stock for 10 years, you shouldn’t own it for 10 minutes.”
It’s more than likely that investments may hit a bump in the road at some point. But a long-term outlook nullifies any near-term headwinds.
With market volatility running rife at the moment, this is a great reminder that picking stocks for fundamental long-term growth is key.
What I’d buy
So, what stocks are out there for me right now that fit these criteria?
Well, I like the look of Unilever.
The stock is down nearly 10% over the past 12 months, showing investor confidence may have taken a hit as wider pressures continue to mount. And as a long-term investor, I think it would be a solid addition to my portfolio.
I like Unilever because of its strong brand name. The business owns over 400 household brands, including companies such as Sure and Dove. And with a third of the world using its products daily, this shows its strength.
I think because of this, it may fare well against rising inflation. Although rising rates will see consumers cut back on spending, it’s unlikely to be on the everyday essential items Unilever brands sell. Its strong market position also gives it, to some degree, more pricing power — which the firm proved in Q1.
The business is also building strong foundations for the long run as it commences a €3bn buyback scheme. It bought €750m worth of its shares back in March. And this should see the stock’s price rise in times ahead. Its 3.67% dividend yield is a further bonus.
One concern I have with Unilever is its large debt. And with interest rates potentially being hiked further, this only magnifies this issue for the firm.
However, I’d still follow Buffett’s advice when buying the stock. At a cheap price, I see Unilever as a strong long-term hold.