0

Do great stocks go on sale during a down market?

PUBLISHED Sep 2, 2022, 12:55:41 PM        SHARE

img
imgSimply Investing Blog

Do great stocks go on sale during a down market?

Do great stocks go on sale during a down market? The short answer is: yes! Warren Buffett has the patience, and discipline to invest in great stocks when they are priced low. In this article I'll provide you with examples of Buffett's investments, and give you 3 examples of great stocks that are undervalued today.

Is the stock market down?

It would seem like the stock market crash has already begun, here are some news headlines from this morning (September 1, 2022):

  • S&P/TSX composite down more than 300 points as stocks tumble (The Canadian Press)
  • Stocks extend losses ahead of jobs report (Yahoo Finance)
  • Stocks extend losses in downbeat start to September (Yahoo Finance)
  • Stocks fall again, wiping out more of the summer's gains (The Canadian Press)
  • Dow drops 268 points on losses in shares of Boeing, American Express (MarketWatch)
  • 'Big Short' investor Michael Burry warned the biggest market bubble in history would end with the 'mother of all crashes.' He just hinted the collapse is now underway. (Business Insider)

Stocks on sale?

We follow the 12 Rules of Simply Investing to buy quality companies when they are priced low (on sale). A down market presents great opportunities to invest in quality companies. Below are two examples taken from one of my favorite books "The New Buffettology" by Mary Buffett:

Buffett's thoughts on brand-name food companies

*Mary Buffett writes: "This is the world of companies like Kellogg's (cereal), Campbell's (soup), Hershey Foods (chocolate), Wm. Wrigley Jr. Company (chewing gum), Pepsi-Cola Company (maker of Doritos), Sara Lee (cheesecake and hot dogs), Kraft/General Foods (you name it, they make it), and ConAgra (the nation's second-largest food processor). Warren made big money investing in Pillsbury (bought out by Grand Met) and General Foods (bought out Philip Morris). All these companies produce multiple brand name products, and many have been making the same products for more than fifty years. Their durable competitive advantage is that they manufacture products that own a piece of the consumer's mind. When we think of chocolate, we think of Hershey's; when we think of gum, we think of Wrigley's; and when we think of soup, we think of Campbell's. These companies have been making money for a long, long time. For a buying opportunity, look for bear [down] markets, corrections, or panic selling during a bull [up] market. These are also the kinds of stocks that get hit in a bifurcated market. They offer long-term growth but not the quick buck. If they get oversold, they can be fantastic buys."

Buffett's thoughts on brand-name beverage companies

*Mary Buffett writes: "Cocal-Cola (Coke), Pepsico (Pepsi), and Anheuser-Bush (beer) are companies that Warren owns, has owned, and is interested in owning. All have proven durable competitive advantages that produce strong earnings and high returns on total capital and shareholder's equity. All have served up the exact same product for more than seventy years. Talk about durable! Coca-Cola alone produces 30% of the liquids consumed by Americans on any given day. That is one mean feat if you think about it. Anheuser-Busch is the world's largest brewer. Warren used a bull-market panic sell-off to make his first investments in Coke. Bear markets and bull-markets corrections and panic sell-offs offer your best opportunities to buy these companies."

Any good stocks to consider today?

As of this writing (September 1, 2022), here are 3 quality stocks that pass the 12 Rules of Simply Investing and are also priced low (undervalued):

3 Quality Stocks

The above list is taken from the Simply Investing Platform.

I'm here to help

I can help you to start investing today and focus on selecting the right dividend stocks when they are priced low (undervalued), why re-invent the wheel when you can learn from my 20-years of being in the stock market. I've witnessed first hand the ups and downs of the market, and I know what it's like to start investing your hard earned money. Follow my approach to investing to help you get started right away, so you don't have to wait on the sidelines any longer. I also built the ultimate tool (that I wish I had when I started investing in1999) to help dividend investors focus on quality stocks for long-term growth. The sooner you start investing the sooner you will be on your path to financial freedom.

Did you enjoy reading this article? If so, I encourage you to sign up for my free newsletter and have these articles delivered via email once a month … for free!

Learn how you can avoid the most common (and costly) investing mistakes, download my free guide today: "Are you making these top 5 investing mistakes?"

*"The New Buffettology" by Mary Buffett, pages 96, 97

Originally Posted on simplyinvesting.com

BEN, Buy

Franklin Resourc...
Return: 1.83%

BEN, Buy

Return: 1.83%


Sound investments
don't happen alone

Find your crew, build teams, compete in VS MODE, and identify investment trends in our evergrowing investment ecosystem. You aren't on an island anymore, and our community is here to help you make informed decisions in a complex world.

More Reads
How to Double Your Returns by Actually Using Simple Strategies
Image

They say the internet changed everything. Well, finally, that change has come to basic investing. It is now easy to double your returns from just a decade ago.

Dividend Stock Watch List: Lanny’s September 2022 Edition
Image

Welcome back to another dividend stock watch list article! The stock market took a nose dive on August 26th, shedding over 3% in some instances on the overall valuation of the stock market.

3 Beaten-Down Dividend Growers for Income Investors
Image

The bear market in 2022 has provided opportunities to buy solid companies at a discount. Fears about a recession and rising interest rates have punished equities.

Kilroy Realty (KRC): Undervalued REIT and 4.2% Yield
Image

The markets had a wild ride down on Friday (8/26/2022). The SPDR S&P 500 ETF (SPY) saw a 14-point drop, about a 3.4% decline in a single trading day.

NextEra Energy Stock Dividend and Forecast
Image

NextEra Energy Stock remained stable during the June lows and the growth in dividend is expected to grow annually by 10% through 2024.

The Layman’s Guide to Understanding Crypto PFP.
Image

Find out what crypto pfps are, how they work, and why they are important for the future of digital identity.

The 3 Highest Yielding Dividend Aristocrats
Image

Investors that want reliable income and ongoing dividend increases to offset inflation may be very interested in the Dividend Aristocrats.

Recent Stock Purchase II August 2022
Image

With August ending and the markets giving us better buying opportunities, I decided to add to some of my existing positions.

Stability. Complacency. Mistake. Repeat.
Image

We take it for granted that nature is harsh and that animals in the wild will continue to fall victim to predators or to their environment as they always have.

Hackers have stolen $1.4 billion via Crypto Bridges in 2022 alone.
Image

Crypto bridge hacks totalled $1.4 billion this year. Find out more details in this article.

How to Interpret Price to Earnings (P/E) ratio
Image

The Price to Earnings ratio tells the investor how many years it will take for a company’s earnings to equal the current stock price.

Turn Around Tuesday Began Yesterday, Likely Ends before Wednesday
Image

Corrective pressures were evident yesterday and they extended today in Asia and Europe but seem to be running their course now.

2022 Tobacco Stocks List | The 6 Best Now, Ranked In Order
Image

As a business owner, selling products that have high profit margins along with strong brand awareness and an exceptionally loyal customer base is strongly desirable.

Market Musing 8-30-2022, Fed Strikes Fear Into Global Markets
Image

SPX dropped 150 points on Friday almost two times the expected move. Going forward, Bad Economic news is just bad news for the markets.

Meta Stock: An Attractive Valuation
Image

According to the long-term forecasts, the worth of Meta's stock will be $272 at the end of 2022 and $360 in 2023.

NFT Utility: Types, Importance, and Ideas
Image

What is NFT utility? Why is it important? And what are some ideas for how it could be used? This article explores all of that and more.

Five Little Words
Image

Market Commentary

Growth Investing in American Express Stock
Image

American Express Company is a payment card services provider with world-class products and services. The company has thrived over the years by providing excellent access to products, insights and experiences for their customers.

Will Student Debt Forgiveness Affect the Economy?
Image

College Grads Have More Cash, but Will it Spike Inflation?

What Will Microsoft Stock Be Worth in 10 Years?
Image

Microsoft stock has rewarded its shareholders with more than 700% return over the past ten years. It will continue to grow over the next decade as well.