Warren Buffett: Buy Stocks At Wartime via /r/wallstreetbets #stocks #wallstreetbets #investing


Warren Buffett: Buy Stocks At Wartime

Stocks around the world rose on Friday as investors welcomed talk of renewed diplomacy after Russia’s invasion of Ukraine, and as coordinated Western sanctions left Russia’s energy sector largely untouched. The U.S. dollar fell and oil prices dipped as investors bet that the sanctions wouldn’t have a significant impact on the global economy.

For U.S. companies, the Russian and Ukrainian operations are small potatoes. Businesses in both countries account for just 1 percent of total S&P 500 sales, according to FactSet, a research firm. But American manufacturing companies and catering companies have been entering the Russian market one after another since the 1990s–until the Crimea crisis in 2014 when many firms reduced their Russian operations.

GM and Ford Motor exited the Russian passenger car market in 2019, after years of struggling to compete against local producers. Exxon Mobil dismantled an exploration-research business partnership with Russia’s state-owned oil company Rosneft following the Crimea crisis.

U.S. chemical and agricultural companies are still doing business in Russia, albeit on a smaller scale than before the sanctions were imposed. Dow, which manufactures resin products and industrial tape outside Moscow, closed down 2 percent yesterday. Shares in Caterpillar, which has factories such as excavators outside St Petersburg, also fell 1 percent.

Warren Buffett has warned investors not to buy gold in times of war, as stock prices have a tendency to rise during such periods. The famed investor made the comments in an interview with American media, citing the Cuban crisis and 9/11 terrorist attacks as examples. Buffett’s first stock investment was in 1942, when he was just 11 years old. At that time, stocks were depressed due to the intensifying Second World War, but Buffett later recalled that they would have been worth much less if they had been exchanged for gold instead. In spite of falling oil prices in 2015, stocks only declined modestly compared to the 70% plunge seen in oil prices over 18 months.

On February 24, the price of WTI crude oil surged above $100 a barrel, approaching the record high of $107 set in June 2014. The rise in prices reflects investors’ willingness to challenge the ongoing crisis. While ordinary investors may not be as daring as Buffett, understanding the dynamics of the stock market during this crisis will provide a reference for future investments.

source: https://www.riskbrew.com/news/621a2c6c0204e20edcf75c18

Submitted February 26, 2022 at 03:32PM by eddieweng
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