I’m following Warren Buffett’s advice and buying ASX shares

I view Warren Buffett as one of the world’s greatest investors, leading Berkshire Hathaway to be one of the world’s largest businesses through numerous good investment decisions. While he hasn’t invested in many ASX shares, I’m using his advice to put money to work in the Australian stock market.

The legendary investor from Omaha delivered an average return of around 20% per year for decades by focusing on long-term investing in businesses that had strong compounding potential and were good value.

It’s during periods of uncertainty when the most attractive prices appear. Warren Buffett has provided timeless advice for investors who are uncertain about what to do.

Warren Buffett’s advice

One of the shortest quotes from Warren Buffett may be the most applicable to the current situation.

He said:

Be fearful when others are greedy and greedy when others are fearful.

It’s hard to get that mentality (and timing) right all of the time, but I think it’s a good idea to buy when prices have dropped and be more cautious when the share market is booming.

There’s another quote that I really like which Warren Buffett said it regards to buying hamburgers at the supermarket. Don’t let a good discount go to waste.

To refer to a personal taste of mine, I’m going to buy hamburgers the rest of my life. When hamburgers go down in price, we sing the ‘Hallelujah Chorus’ in the Buffett household. When hamburgers go up in price, we weep. For most people, it’s the same with everything in life they will be buying — except stocks. When stocks go down and you can get more for your money, people don’t like them anymore.

I get excited when share prices go lower, which is why I’ve put my money into certain ASX share investments in the last few weeks.

I’m buying ASX shares

Motley Fool’s trading rules mean I can’t disclose what I’ve bought this week. But, last week I did purchase some Guzman Y Gomez Ltd (ASX: GYG) shares as a non-tech growth investment.

I’ve also shared some ideas of names that I’d be excited to buy right now (but haven’t yet) such as Temple & Webster Group Ltd (ASX: TPW), Tuas Ltd (ASX: TUA) and Global X S&P World Ex Australia GARP ETF (ASX: GARP).

Ultimately, I’m looking for names that I’m expecting earnings to grow significantly in five and ten years from now because that’s what will drive the share price higher, regardless of what happens in March (or even 2026). When you buy a growing business, it doesn’t matter as much if we don’t manage to invest at the lowest valuation level. Its underlying value will increase at a pleasing pace over time.

I don’t know whether Warren Buffett has made any investment decisions in March, but I’d like to think he’d be supportive of being brave during this period. There are plenty of opportunities out there right now.

The post I’m following Warren Buffett’s advice and buying ASX shares appeared first on The Motley Fool Australia.

More reading

• Buy, hold, sell: Guzman Y Gomez, Worley, and Suncorp shares
• Why I just invested in these 2 exciting ASX shares
• 3 ASX 200 shares at 52-week lows I’d buy before they recover
• 3 shares I’m buying if this ASX sell-off gets worse
• Buy, hold, sell: Guzman Y Gomez, Lovisa, and Newmont shares

Motley Fool contributor Tristan Harrison has positions in Guzman Y Gomez, Temple & Webster Group, and Tuas. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Berkshire Hathaway and Temple & Webster Group. The Motley Fool Australia has recommended Berkshire Hathaway and Temple & Webster Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.