What do value investors do if stock markets go down?

As you know, in response to the possibility of a crisis I’ve bought assets that rise in value as the US stock market falls (if I falls a lot).

But not everyone can buy puts on the Dow, so the second element might be more relevant:  I will be in no hurry to invest money I have coming in from a property sale into shares.  If there is a sharp downturn in the stock market, I’ll be delighted – I’ll invest in some old favourites at bargain prices and I’ll find more. I’ll be Buffett’s “oversexed guy in a harem”.

This is not to say that Warren or I are trying to “time the market” – neither of us have sold-down current shareholdings.  But note that the money Warren has flowing in from operating businesses and from dividends etc., has now accumulated to over $130bn – he hasn’t been able to find shares at the right price.

For perspective on the chart below: Market Cap of Ford is $39bn and M&S £4.6m.  Look at how Buffett built up cash pre-2000, pre-2008 and then invested it afterwards.

Here is the stance to take when a shock does eventually arrive:

“During…scary periods, you should never forget two things:

First, widespread fear

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