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Warren Buffett once said, “A climate of fear is theirs [investors] best friend. Those who invest only when commentators are optimistic end up paying a heavy price for meaningless reassurance. ”The point is that those who invest when markets are bad and stocks are down are generally the ones who do better in the long run. The reality is that there aren’t many options for building wealth these days other than through stocks.
Nowhere but the stock market
Interest rates are at an all-time low, making bonds and savings accounts a very poor place build wealth. With everything that has happened in 2020, the stock market may seem like a less than ideal place to create wealth. Warren Buffett rightly stated earlier: “Charlie and I believe it is a terrible mistake to try to dance in and out. [the market] based on the turn of the tarot cards, the predictions of “experts” or the ebb and flow of commercial activity. The risks of being out of the game are enormous compared to those of being there. “
Stay with the market like Warren Buffett
If you want to become a millionaire in the manner of Warren Buffett, you just have to learn to stick with the market. In fact, an investor’s best friend is really time itself. Find the best companies in the worst markets, then plan to keep them in highs and lows and everything in between. Fortunately, stock markets rise a lot more than they fall. By staying invested in stocks throughout your life, you actually stack the odds of success significantly in your favor.
So, do you want to be a millionaire? Here are two TSX titles that are perfect winners in the manner of Warren Buffett.
Enbridge is not loved, but now is the time to own it
The first stock is Enbridge (TSX: ENB) (NYSE: ENB). As the “blast” of this week’s cyclical recovery has been shown, the closer we are to a cure, the better stocks like Enbridge will be. While there is nothing exceptionally exciting about pipelines and natural gas infrastructure, they are a perfect investment by Warren Buffett.
In fact, earlier this year, Warren Buffett bought a $ 10 billion pipeline in the eastern United States. Pipeline stocks like Enbridge are attractive right now. First, they are cheap. Enbridge is trading at a forward price for 14x earnings, which is a three-year low. Likewise, it trades with a north dividend yield of 8%, nearly 3.5% higher than the five-year average. Its dividend is well covered by a stable, contracted / regulated cash flow.
On Thursday, Enbridge announced that it has received another round of approvals and permits for its Line 3 project. All of this bodes well for a potential completion of the project in 2021. As the world recovers, investors could expect a significant increase. energy activity and investor sentiment could improve rapidly. Buy it now, get a big dividend and wait for the world to recover.
Warren Buffett would love this TSX title
Another great title from Warren Buffett is Brookfield Business Partners (TSX: BBU.UN) (NYSE: BBU). Like it Berkshire Hathaway, owns and operates a mixed variety of businesses, including private hospitals in Australia, mortgage insurance in Canada, international nuclear services, and water / wastewater management in Brazil. It acquires companies in crisis situations, recapitalizes them, and then applies sound management practices to turn them into cash flow machines.
It focuses on compound returns for investors and aims for average annual returns of 15% or higher. Put it together for a lifetime and you will soon be well on your way to becoming a millionaire. Stocks and companies have faced the challenges of the pandemic. Yet it has a solid balance sheet ($ 2.2 billion in cash) and a global management team with experience in transforming businesses.
If you like Warren Buffett’s long-term value, but don’t worry about short-term volatility, this title is the perfect pandemic recovery title to own.
Insane contributor Robin Brown owns shares in Berkshire Hathaway (B shares), Brookfield Business Partners LP Limited Partnership Units and ENBRIDGE INC. The Motley Fool owns shares and recommends Berkshire Hathaway (B shares) and Enbridge and recommends the following options: Long January Call 2021 $ 200 on Berkshire Hathaway (B shares), Short January 2021 $ 200 put on Berkshire Hathaway (B shares) and short December 2020 $ 210 call on Berkshire Hathaway (B shares).
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