Is Now Time to Buy?

The stock market is in turmoil. The S&P 500 has reportedly shed over $5 trillion in value in just two days, triggered by President Donald Trump’s unveiling of near-universal tariffs and retaliatory threats from foreign nations. Major indices like the Dow and Nasdaq are reeling, with some of Buffett’s favorite holdings—Apple, American Express, Bank of America, and Occidental Petroleum—down more than 15% in the same period. For the average investor, this might feel like a catastrophe, a signal to sell everything and hide. But for Warren Buffett and other value investors, this crash could be something entirely different: an opportunity.

Warren Buffett, the "Oracle of Omaha," has built his legendary career on a simple yet profound principle: buy quality businesses at a discount and hold them for the long term. His approach, rooted in the teachings of Benjamin Graham, thrives on market downturns. Buffett has famously said, “Be fearful when others are greedy, and greedy when others are fearful.” This isn’t just a catchy phrase—it’s the backbone of his strategy, proven through decades of navigating crashes like the 1987 Black Monday, the dot-com bust, and the 2008 financial crisis. As Berkshire Hathaway sits on a staggering $321 billion cash pile—up from $110 billion in September 2022—Buffett appears poised to act, but his next move isn’t guaranteed to be immediate.

Value investors like Buffett don’t react to market chaos with emotion. They analyze. They look beyond the headlines to the fundamentals of businesses—earnings, cash flow, competitive advantages—and ask whether the price drop reflects a temporary panic or a permanent impairment. Take Apple, for instance. A 15% drop in two days is steep, but does it change the fact that millions will still buy iPhones next year? Or American Express—does a tariff-induced sell-off alter its loyal customer base or its ability to generate profits? For Buffett, the answer is likely no. He’s not swayed by short-term volatility; he’s focused on intrinsic value, the long-term worth of a company independent of its current stock price.

This crash, driven by tariff uncertainty and fears of economic slowdown, fits the profile of what Buffett calls an “extraordinary opportunity.” In his 2017 shareholder letter, he referenced Rudyard Kipling’s poem “If,” urging investors to “keep your head when all about you are losing theirs.” He’s done this before. In 2008, when the financial system teetered, Buffett invested $5 billion in Goldman Sachs at a time when others fled. In 1973, he scooped up Washington Post shares at a quarter of their intrinsic value during a market slump, turning a $10.6 million investment into $200 million by 1985. These moves weren’t luck—they were calculated bets on quality at bargain prices.

Other value investors—think Seth Klarman, Howard Marks, or even Bill Smead—share this mindset. They see crashes as a chance to buy what Klarman calls “the proverbial dollar for fifty cents.” Marks, in his memos, often emphasizes the cyclical nature of markets: fear drives prices below intrinsic value, creating openings for the patient. Smead, a Berkshire shareholder, has suggested Buffett is waiting for a bigger plunge to deploy his cash hoard, a view echoed by some analysts who note Buffett’s recent restraint despite the market rout.

So, is now a good time to buy, or should investors wait for more information? For Buffett, the decision hinges on price versus value. Berkshire’s cash pile, now larger than Coca-Cola’s market cap, gives him flexibility, but he’s notoriously disciplined. Steven Check, a Buffett follower who manages $2 billion at Check Capital Management, told Business Insider that Buffett might “require a much larger drop to do significant buying.” Why? Valuations, even after this crash, may not yet be low enough for his taste. The Buffett Indicator—the ratio of U.S. stock market capitalization to GDP—recently hit 200%, a level Buffett once called “playing with fire.” Despite the sell-off, it’s likely still elevated, suggesting stocks aren’t yet dirt-cheap.

Moreover, the tariff situation introduces uncertainty. John Hanke, an economic historian, posits that Buffett might be mindful of the Smoot-Hawley tariffs of 1930, which deepened the Great Depression. If Trump’s policies spark a prolonged trade war or recession, the damage could outweigh the discounts. Buffett’s not a market timer—he’s said short-term forecasts are “poison”—but he’s also not reckless. He might wait for clarity on the economic fallout, as he did in 2008, holding off until the panic peaked.

For the average investor, this suggests a hybrid approach: don’t rush in blindly, but don’t sit on the sidelines forever. Buffett’s own words from 1996 ring true: waiting for a crash to buy is like “a mortician waiting for an epidemic.” Perfect timing is a myth—Peter Lynch once showed that investing at market peaks versus troughs only cost 1.1% annually over decades. The key is finding quality companies at reasonable prices now, while keeping some cash to pounce if the slide deepens.

How can people benefit from this crash? First, by adopting Buffett’s long-term lens. A 30% drop in a stock doesn’t mean ruin—it means a sale, if the business is sound. Coca-Cola, a Buffett staple since 1988, is up 11% in 2025 despite the broader market’s woes, a testament to its resilience. Investors can hunt for similar “dividend kings” or firms with strong moats—think consumer staples, utilities, or healthcare—that weather storms better than speculative tech.

Second, crashes reset expectations. The past few years saw inflated valuations—Buffett sold $158 billion in stocks net since 2023, signaling overpricing. Now, with prices falling, value investors can scoop up shares of companies they’ve long admired but couldn’t afford. BYD, the Chinese EV maker Buffett backed in 2008, is up 47% this year—proof that growth and value can coexist at the right price.

Third, there’s a psychological edge. Buffett thrives on others’ fear, buying when panic peaks. Individuals can do the same by dollar-cost averaging into solid stocks over the next few months, smoothing out volatility. If the market drops further—say, another 10-20%—those who acted early still win, while those who waited too long miss the bottom.

Finally, this crash could benefit the broader economy if it forces a reckoning. High valuations and speculative bubbles (think AI stocks) might deflate, redirecting capital to productive firms. Buffett’s $321 billion war chest could fund deals that stabilize markets, as it did in 2008, benefiting society beyond just his shareholders.

In conclusion, Buffett and value investors likely see this crash as a hunting ground, not a graveyard. It’s a good time to buy if you’ve got cash and a list of quality targets—stocks like Coca-Cola, VeriSign, or even Berkshire itself—but waiting for more clarity on tariffs and economic damage isn’t foolish either. The benefits are clear: cheaper stocks, a chance to build wealth over decades, and a lesson in patience. As Buffett once said, “The stock market is designed to transfer money from the active to the patient.” This crash is his playground—and it could be yours too.