Back to top

Image: Shutterstock

300th Episode: Buffett's 2008 Lessons

Read MoreHide Full Article

  • (1:45) - Can We Learn From Warren Buffett's Advice From 2008?
  • (11:40) - Tracey’s Top Stock Picks: What Should You Be Buying Right Now?
  • (19:20) - Episode Roundup: XOM, CVX, PFE, UNP, CSCO, PNC


Welcome to Episode #300 of the Value Investor Podcast.

Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.

This is a special episode. The Value Investor Podcast first launched in July 2016. It’s been over 6 years of episodes and we’ve finally reached the magical 300th episode. Thanks to everyone for listing through the ups and downs of the last few years.

And thanks to the new listeners who have found the Value Investor Podcast in 2022 because value stocks are back in vogue.

It’s a good time to be a value investor.

Buffett’s Investing Advice in 2008

However, 2022 has been rough for investors, whether in value or growth stocks. That’s why it always pays to consult with the Oracle of Omaha, Warren Buffett, for advice on what to do during a big stock market sell-off.

And what was a bigger sell-off than the stock market in 2008 during the financial crisis?

Buffett took pen to paper on Oct 16, 2008 and published an op-ed in the New York Times called: Buy American. I am. You can read it here.

He said about 2008, “Be fearful when others are greedy, and be greedy when others are fearful.”

Buffett also warned that earnings could take a hit as businesses suffered through tough economic times but that he believed most companies would be setting new profit records 5, 10 or 20 years down the line.

Sound familiar?

Stay the Course

Buffett also advised that there will be dark times and that’s when investors should be buying. He said that in the early 1980s, the time to buy stocks was while inflation raged and the economy was in the tank.

The stock market has a habit of rebounding well before a recession ends. Wall Street tends to “price in” all the bad news months ahead of time.

That’s why it’s so difficult to try and time the bottom. Buffett said in 2008 he wasn’t going to try and time it for the short-term, as he had a long-term investing horizon.

That’s good advice.

5 Cheap Stocks That Pay Dividends

1.       ExxonMobil (XOM - Free Report)

You don’t have to reinvent the wheel. Buffett’s Berkshire Hathaway has been buying Chevron this year but ExxonMobil is also cheap.

Shares of ExxonMobil are up big in 2022 thanks to rising oil and natural gas prices. It’s jumped 62% year-to-date.

But ExxonMobil has a forward P/E of just 7.4 and a PEG ratio of just 0.3. A PEG ratio under 1.0 usually indicates a company has both growth and value.

Should ExxonMobil be on your short list?

2.       Pfizer (PFE - Free Report)

Tracey keeps turning back to Pfizer on the podcast because it remains dirt cheap.

Shares of Pfizer have fallen 25% year-to-date, creating a buying opportunity. It now trades with a forward P/E of just 6.8.

Pfizer also pays a juicy dividend, yielding 3.6%.

Are you waiting to see if Pfizer will get even cheaper?

3.       Union Pacific (UNP - Free Report)

Union Pacific has been around since the 1860s. This railroad has made it through wars, the Great Depression, assassinations, the Great Recession and it is still growing its business.

Shares of Union Pacific have fallen 20% year-to-date. It’s not as cheap as some of the other stocks, however, with a forward P/E of 17.7.

It’s still paying a dividend, currently yielding 2.5%.

Should the rails be on your short list?

4.       Cisco (CSCO - Free Report)

Cisco was one of the tech titans of the 1990s, returning over 10,000% in that decade. But it has never repeated that performance after the dot-com bust.

Cisco shares are down 33.7% year-to-date and are now cheap. It trades with a forward P/E of just 11.8.

In the 1990s, Cisco didn’t pay a dividend, but it does now, and it’s yielding a juicy 3.6%.

Should Cisco be the tech company on your short list?

5.       PNC Financial (PNC - Free Report)

PNC Financial is a large regional bank headquartered in Pittsburgh. Bank earnings should benefit from the Fed raising interest rates.

But shares of PNC Financial have also fallen this year, losing 20.5% year-to-date. They’re cheap, with a forward P/E of just 11.1 and a P/B ratio of 1.38.

PNC Financial also pays a juicy dividend, currently yielding 3.7%.

Is this a buying opportunity in PNC Financial?

What Else Should You Know About Lessons from the 2008 Sell-Off?    

Tune into this week’s podcast to find out.


Published in