Warren Buffett touted a past European crisis as a buying opportunity — and argued trouble on the continent is no reason to avoid stocks
- Warren Buffett has framed past turmoil in Europe as a chance to buy cheap stocks.
- The Berkshire Hathaway CEO said the European debt crisis could result in bargains.
Warren Buffett famously strives to be "greedy when others are fearful." The billionaire stock-picker and Berkshire Hathaway CEO endorsed that approach during the European debt crisis, recommending investors view the turmoil as a chance to scoop up bargains.
"The fact that there are troubles in Europe — and there are plenty of troubles in Europe, and they're not gonna go away fast — does not mean you don't buy stocks," Buffett told CNBC in 2013.
The Berkshire chief noted his company deployed $15.5 billion in three weeks during the fall of 2008, when the US was in dire straits as the financial crisis took hold.
"It wasn't because the news was good, it was because the prices were good," Buffett explained. "If you believe that Europe is going to be around, which it certainly is, and it's going to have huge amounts of purchasing power ... then you actually look at troubles as possibly offering you an opportunity to buy."
The veteran investor recalled buying his first stock a few months after Pearl Harbor, when the US was losing ground in World War II.
"I didn't buy it because I thought losing the war was a great idea," he told CNBC. "I bought it because I thought stocks were cheap and that eventually we'd win the war, and same way in Europe."
Buffett emphasized that he cares far more about the quality and valuation of a business than where it's headquartered.
"If Coca-Cola were based in Amsterdam instead of Atlanta, we'd love to buy it," he said. "We like good companies at cheap prices."
Buffett declared he was open to investing in southern Europe, but a Greek, Italian, or Spanish company would have to clear a higher hurdle to win his backing.
"If I understand the business well, and I trust and admire the management, and the price is right, we'll buy there," he said.
Buffett struck a similar chord during Berkshire's annual shareholder meeting in 2013, when he was asked whether the sovereign-debt crisis would stop him investing in the eurozone.
"It may create opportunities for us to buy businesses," he said. "We would be delighted, tomorrow, to buy a big business in Europe that we liked, and we'd pay cash for it."
The Berkshire boss adopted a similar stance in 2014, telling investors they should hold stocks during a war, not cash, gold, or bitcoin.