It was always a mystery that was released on President Donald Trump’s “Liberation Day”, but one thing is now clear: billions of dollars instead of corridor throughout the country have been released. The president’s announcement of a blanket at 10% tariff In all imports and highest taxes on most major commercial partners gave investors.
After stocks were reduced to regular negotiation on Wednesday, the announcement caused a shock after hours. From 19:15 ET, future had not yet begun to negotiate, but some important names fell abruptly. PurchaseThe e -commerce software leader had lost 9%. Tesla and Apple Each 7%had fallen. Nvidia It had fallen by 5%. The rest of the “magnificent seven” stocks that had led the Bull Market of 2023 and in 2024 had also been affected, and the Wipeout may be preceding the history of the modern market, at least for negotiation after the hours.
Much of this sale seems to be a visceral reaction to the news and the economic experiment that leads to it: the Trump administration has called on Americans to suffer some economic pain in order to reinforce (according to their reasoning) the American economy in the long term. He says that the rates will resist companies again, will reduce the commercial deficit and the dependence on foreign imports and will rebuild the country’s manufacturing base.
Given the red sea after Wednesday’s hours, it is not uncommon for investors to panic, especially since the stocks were maximum at all times a few weeks ago.
At times like these, it is worth remembering the Sage Tips of Warren Buffett, the Berkshire Hathaway(NYSE: Brk.a)(NYSE: Brk.b) The CEO and 94 is generally considered to be the largest investor of all time. At this point two aphorisms stand out.
Image Source: The Motley Fool.
There is no shortage of buffett’s wisdom in value investment, but right now an appointment is released. Discussing his opposite approach to investment, Buffett once said, “If they buy a stock and think that if it increases it is wonderful, and if it is bad, we think that the opposite. When it goes down, we love it, because we will buy more.”
What Buffet says may seem counterinuous, but it makes sense. For clean stock buyers, it is good that the prices of the shares fall, because it allows them to buy more shares for the same amount of money.
Ultimately, invest in a company. And if the long -term prospects and health of this business have not been damaged by the sale in question, you will get a better agreement by buying shares at a lower price.
Elon Musk, CEO of Tesla, echoed this feeling a few weeks ago when he involved Tesla’s employees who did not sell their stock: “Thus, Tesla Stock increases and drops. But in fact, it is still the same company.” He said that “it is only the perception of the people about the future” that changes.
In the case of rates, they are likely to have a short-term impact on many more important stocks and much of the American economy. But no one really knows the impact from the age of five, and it is definitely not ten years from now on. We don’t even know if the rates are here to stay.
If you are a long -term investor, continue to focus on the horizon of time. (You’re not a day -to -day merchant seeking to do –
Buffett has been a defender not only for capitalism and investment, but also specifically to buy North -American shares. In 2008, shortly after Lehman Brothers failed, he urged companions investors into a New York Times Op-Ed to “buy American. I am”.
More recently, he told the investors in his annual shareholder letter that “I have depended on the success of North -American companies and I will continue to do it”, adding that Berkshire would always be invested in “mostly North -American actions.”
Although diversification in international actions is not a bad idea at this time, U.S. actions have surpassed their world companions over time and the United States have long been a dynamo of growth and innovation. Buffett has been insisting on betting on America and is unlikely to change his tune.
Strilling disadvantages and even accidents can be emotionally painful, but they have opportunities to achieve quality actions at a good price, and it is advisable to take advantage of them. U.S. stocks have bounced off much larger crisis and have continued to be established.
Don’t take it out of it. Take it from Buffett, which has been invested through crises, such as oil seizure, stagflation, black Monday, dot-com bust, 11/11, the great financial crisis and Covid-19 pandemic, and continues to gain the same simple strategy.
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Jeremy Bowman It has positions in Nvidia and Shopify. The Motley Fool has positions and recommends Apple, Berkshire Hathaway, Nvidia, Shopify, Tesla and The New York Times Co. The Motley Fool has a Outreach policy.
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