Shares as a weapon against the bearmarket? The legendary Warren Buffet always chooses this one

Warren Buffett's advice is never spared. But given his track record, it makes sense. It's just that his specific stock purchases are quite often not disclosed and explained until long after the opportunity or situation is gone. But what if I told you that there's one stock that Buffett buys every time he goes to the market? And how could you benefit from that?

Warren Buffett always buys this one stock

What's the first thing that comes to mind when you combine the name Warren Buffett + stock against the bearmarket? It's probably something like $AAPL+0.2% $KO+1.5% or oil producers $OXY+0.0% $CVX+0.2%. Those are good guesses. But it's not something Buffett would buy regularly at every bearmarket.

Normally bear markets are a terrible time to hold oil company stocks because of fears of reduced demand for oil and gas. But now is an extraordinary time, and Warren Buffett probably expects energy commodity prices to remain high for several years. In addition, the Russian invasion of Ukraine is hampering the global energy supply chain, particularly in Europe.

The Omaha soothsayer also bought the aforementioned Apple and also $HPQ+0.2%. HP appears to be an interesting value pick at less than seven times projected earnings for the coming year. Although demand for PCs is weakening somewhat as employees return to the workplace, HP's operating cash flow tends to be very predictable. Along with that, so is the 3.5% yield.

So your picks wouldn't be completely off, all of these typically "Buffett" titles were bought by the Oracle in the bearmarket. However, they are not names he would have bought in any of the recent bear markets. In fact, there's only one such - and I'm not going to lie, it was a bit of a trap.

It is, in fact, itself Berkshire Hathaway $BRK-A+1.1% $BRK-B+1.0%

In the form of buybacks, of course.

Prior to July 17, 2018, Berkshire Hathaway's board of directors granted Warren Buffett and his right-hand man Charlie Munger the option to buy back shares if they were trading at or below 120% of book value (i.e., no more than 20% above the company's book value). In the more than half-decade leading up to July 17, 2018, Berkshire's stock price never reached a level where buybacks could be made.

https://www.youtube.com/watch?v=YalcD69EAsQ

But after the board of directors approved the changes, Buffett and Munger were given more freedom to deploy their capital to buy back Berkshire Hathaway's Class A and Class B shares.

As long as the company has at least $30 billion in cash, cash equivalents and U.S. Treasuries on its balance sheet, and Buffett and Munger believe Berkshire Hathaway's stock price is inherently cheap, the buybacks can be made without any restrictions.

Berkshire's price may indeed be quite reasonable

What Warren Buffett missed out on, managing a $62.1 billion buyback of Berkshire Hathaway stock over four years.

The fact that Warren Buffett has continued to buy back shares of his company during each of the last several bear markets also shows that he is willing to bet on himself and the vast network of companies that Berkshire Hathaway owns and has invested in. Many of Berkshire Hathaway's investments are in cyclical businesses that benefit from the disproportionate amount of time the U.S. and global economies spend expanding compared to when they are contracting.

By the way, I discuss some of the statistics - including average growth time and bearmarket - in this article:

A 100 year old statistic with a 100% success rate guarantees that the bearmarket will pass. It will also tell you when it will end

Buybacks, or redemptions, are explained here:

https://www.youtube.com/watch?v=rVTHRvNpsFs

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Disclaimer: This is in no way an investment recommendation. This is purely my summary and analysis based on data from the internet and a few other analyses. Investing in the financial markets is risky and everyone should invest based on their own decisions. I am just an amateur sharing my opinions.

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Good information

how could you benefit from that?

Warren Buffett is not considered the best investor of all time for nothing. He has shown his qualities over the long term, repeatedly and consistently. And he has done it again now. His favorite company excelled while the rest of the market bled.

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