Investing

The S&P (VOO) Is Melting Down, And Warren Buffet's Advice Couldn't Be More Sage

Austin Smith

Published: March 15, 2025 9:59 am

24/7 Wall St. Key Points:

• Investors should differentiate between a company’s long-term value and its short-term stock movements, as seen with Palantir (NYSE: PLTR), which remains fundamentally strong despite recent declines.
• Warren Buffett’s strategy—such as his continued accumulation of Occidental Petroleum (NYSE: OXY)—emphasizes buying quality businesses at lower prices rather than reacting emotionally to market sell-offs.
• Berkshire Hathaway (NYSE: BRK.A, BRK.B) remains a stable investment, with its massive cash reserves allowing Buffett to capitalize on downturns, reinforcing the importance of patience and strategic buying.
• Your future is too important to leave to chance. See if you’re on track for retirement by taking this simple quiz and matching with a fiduciary financial advisor serving your area. It only takes a moment, and is totally free. Click here to begin. (sponsor)

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Transcript:

[00:00:04] Doug McIntyre: One of the things that people have to remember and this is sort of a Warren Buffett thing If you have a big stock market sell off, the temptation is to take stocks that have gone up a lot and, you know, sell them.

[00:00:16] Doug McIntyre: There’s a temptation to sell, you know, 20 percent of your whole portfolio. I think it’s very good advice to people to ask themselves, do I like this company? Separate it for a moment from the stock. If you like a company and you think it’s going to be successful over the next decade, You’ve really got to consider hanging on to it.

[00:00:40] Doug McIntyre: And then in some cases, depending on how intrepid people are, if you love a company and it’s down 30%, if you love it, the business, not the stock, it’s important to separate those things. I love the business or do I love the stock? I’ll give you a good example. I love Palantir. I love Palantir. They’ve got a captive customer base in the government defense area.

[00:01:04] Doug McIntyre: They’ve also been able to branch out. They have a lot of corporate customers. It’s basically an AI driven business model. Now the stock has gotten, you know, last year, I think was up more than any other stock in the S&P 500 (VOO) or right at the very top. Yeah, absolutely. This year it’s getting killed.

[00:01:21] Doug McIntyre: The stocks note folks, the stock is no different. The company is no different today than it was six months ago. So it’s probably better today actually maybe better today, my advice to people is we may say see the market sell down more. Don’t panic to the extent that you take something that is a really really good business and junk the stock because you got nervous.

[00:01:46] Lee Jackson: Well, that’s extremely good advice and again when I was When I was on the cell side, I’d have people, this is a, this kind of day was the day when the phones start ringing. That’s a good thing. And Buffett’s a good example. I mean, he loves Occidental. He absolutely loves it.

[00:02:03] Lee Jackson: And he has bought, he has been buying nothing, but he continues to add Occidental at lower levels because he’s willing to stay for the long term. ’cause that’s what he likes in the name. And so that, that’s why it’s really, really good by, Hey, you can’t always afford to buy more, but, at least hold on. If you do like the company.

[00:02:23] Doug McIntyre: Well, a good example of that is Buffett’s company, Berkshire Hathaway, uh, great company, been a great company for decades the market’s selling off Berkshire’s flat. People look at that. It’s not a classic safe haven stock, but you can use Buffett’s own rule to own his company. It’s like, be patient.

[00:02:45] Doug McIntyre: If you love a company, don’t go crazy. If you own Berkshire Hathaway. People aren’t going crazy to on Berkshire Hathaway today. The stock is just sitting there floating along, not getting dragged under.

[00:02:58] Lee Jackson: As we’ve discussed so many times, it’s the perfect investment. Number one. He’s very concentrated.

[00:03:05] Lee Jackson: You know, he is got 75% of his portfolio in six or seven stocks, you know, and nobody does that. Nobody, there is no money manager on Wall Street that’s that concentrated. But when you balance that against all the private companies in there, it’s the perfect hedge.

[00:03:22] Lee Jackson: Now he may be looking at the market now because he’s sitting on a pile of cash. We’ve you know said ad nauseam. It’s somewhere between 320 and 335 billion dollars And he’s probably starting to look at something and that’s exactly what you do He may buy more Oxy, but if you like something, yeah

[00:03:41] Doug McIntyre: But that’s the advice from this. Buy or sell the company, don’t buy or sell the stock. Buying or selling the stock makes no sense. It’s usually a sign of panic. This is the kind of day when you want to look at your portfolio and say, Do I still love the companies in there? Right. The answer is you’ve got one or two that you bought because, you know, it was speculative or you thought the stock was a momentum stock.

[00:04:07] Doug McIntyre: Those are the things you want to think about, you know, not having, but if you really have small positions in, if you really like the company’s business, hang on, it’s not going to go down forever.

[00:04:20] Lee Jackson: No, it won’t. And that’s good advice because this sell off we have now, this could have some legs.