Is this a ‘Warren Buffett moment’ in the markets?

Billionaire investor Warren Buffett has said a lot of memorable things in his decades as a stock market investor and sage.

One of the best known is his suggestion that investors should be fearful when others are greedy and greedy when others are fearful.

Is the recent stock market volatility the start of a Warren Buffett moment, when this advice comes into its own?

I think so – and reckon it could be a great opportunity for a long-term investor even with nowhere like as much to invest as the Sage of Omaha has at his disposal.

Buffett has been looking somewhat fearful

Over the past year or so, Warren Buffett has been buying some shares. But, more notably, he has been selling shares – on a large scale.

At the end of last year, his company Berkshire Hathaway was sitting on a record cash pile of $334bn. It has significantly reduced the size of its largest shareholding, in Apple (though it retains a sizeable stake).

Why? We do not know for sure. Buffett has hinted at various explanations, including tax considerations.

But remember that Buffett was doing this when the US market was racing ahead, with firms like Nvidia and Meta putting in very strong performances. That made a lot of investors greedy. Warren Buffett, by contrast, has looked to me as if he is increasingly fearful.

It’s possible that Buffett cast more light on this at the annual Berkshire shareholders’ meeting yesterday (3 May), but I’m writing this before the meeting, on 2 May.

The large share sales and record cash position suggest to me that, to some extent, seasoned market operator Buffett has been fearful about some US share valuations.

Could now be the moment to turn greedy?

Over the past couple of months, though, the wider market feeling on both sides of the pond has turned from one of greed to one that feels increasingly like fearfulness. Erratic and potentially costly US policy-making has seen huge amounts of value wiped off many shares.

I see that as a potential buying opportunity.

For example, one share I think value-hunting investors should consider is JD Sports (LSE: JD).

The retailer’s share price has tumbled 29% over the past year even after a 26% recovery from a low last month. I think that sort of volatility is a sign of the fearfulness currently seen in market.

Yet the company is firmly in expansion mode. Its huge new store in Glasgow’s primary shopping thoroughfare, set to open shortly, is not an isolated example. Rather, it is representative of JD Sport’s aggressive store opening programme of recent years, both in its home UK market and overseas.

The global market is key for JD Sports, which has operations spanning from North America to Australia. It has a proven retail formula based on a strong brand, deep customer understanding, and select unique products.

A key risk is weakening consumer confidence hurting sales. So far, though, the company seems unperturbed. It expects like-for-like sales to fall this year, but thanks to that store opening programme and acquisitions, it expects strong revenue growth overall.

The business remains solidly profitable and is forecasting profit before tax and adjusting items for this year of around £920m. To me, its current market capitalisation of £4.1bn therefore looks like a potential bargain.

The post Is this a ‘Warren Buffett moment’ in the markets? appeared first on The Motley Fool UK.

But this isn’t the only opportunity that’s caught my attention this week. Here are:

5 Shares for the Future of Energy

Investors who don’t own energy shares need to see this now.

Because Mark Rogers — The Motley Fool UK’s Director of Investing — sees 2 key reasons why energy is set to soar.

While sanctions slam Russian supplies, nations are also racing to achieve net zero emissions, he says. Mark believes 5 companies in particular are poised for spectacular profits.

Open this new report — 5 Shares for the Future of Energy — and discover:

Britain’s Energy Fort Knox, now controlling 30% of UK energy storage
How to potentially get paid by the weather
Electric Vehicles’ secret backdoor opportunity
One dead simple stock for the new nuclear boom

Click the button below to find out how you can get your hands on the full report now, and as a thank you for your interest, we’ll send you one of the five picks — absolutely free!

Grab your FREE Energy recommendation now

More reading

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. C Ruane has positions in JD Sports Fashion. The Motley Fool UK has recommended Apple, Meta Platforms, and Nvidia. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.