How does Billionaire Warren Buffett Invest During Recession?

According to the investment principles of the billionaire Warren Buffett, in difficult times, investors need to rely on fundamental analysis to stick to the market.

The stock's galloping momentum is largely based on technical analysis, rather than an assessment of whether the company is performing well over the long term.

Technical analysis is useful for short-term trading, but fundamental analysis is needed for long-term investments, which are less affected by temporary changes in the economy.

According to analysts, fundamental analysis will not predict what is coming, but in difficult times, investors need to use this method to stay on the market.

1- Understand clearly about investments

For many amateur investors, they can entrust the investment to professionals and pay only a small fee.  But according to the principle of the billionaire Buffett, investors need to invest on their own and never pour money into an sector that they do not understand well.

"Many people pay huge sums of money in exchange for some advice they don't need” - said Buffett during a 2020 shareholder meeting.

According to Mr. Steven Check, founder of financial consulting firm Check Capital, investors should start with researching about a potential company: Who is running the company, What the company's products are and How it works.
Investors also need to research about the company's product and assess its future position.

Furthermore, investors need to understand about the financial statements, evaluate the balance sheet, profit and loss statement, cash flow statement, operating expenses, revenue and cost.

Investors also need to evaluate the company's debt situation and earnings growth year over year.

2- Long-term investment

According to Warren Buffett, when we invest, we do not buy stocks, but buy ownership of a company and enjoy what that company brings in the future.  If we choose the right company with good and high profit, we will own "money printers" with this amount growing.  To enjoy this great result, first and foremost, the money invested according to this strategy must be long-term investments.

There are some investors who, at first, also considered long-term investments, but when they saw a sharp increase in the stock price compared to the purchase price, they sold it to make a profit and were attracted to short-term investment strategies. It is time for investors to divide their capitals to invest in 2-3 different strategies and be consistent with each chosen strategy.  If too flexible, we will never have a long-term value investing portfolio.

How does Billionaire Warren Buffett Invest During Recession?

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