It has finally happened — coronavirus fears have taken over and panic has set in.
Global stocks are plunging on Monday after the number of virus cases outside China surged over the weekend, particularly in Italy, South Korea and Iran.
The Dow Jones Industrial Average was set to open 740 points lower as futures sank before the open. European stocks plummeted in early trading, with Italy’s FTSE MIB I945, -5.85% leading the descent.
However, in our call of the day, Warren Buffett told investors not to buy or sell stocks, which he referred to as businesses, based on the day’s headlines.
“The real question is: ‘Has the 10-year or 20-year outlook for American businesses changed in the last 24 or 48 hours?’” the billionaire investor said on CNBC.
“You’ll notice many of the businesses we partially own, American Express, Coca-Cola — those are businesses and you don’t buy or sell your business based on today’s headlines. If it gives you a chance to buy something you like and you can buy it even cheaper then it’s your good luck,” he added.
In his annual investor letter over the weekend, Buffett said equities would outperform bonds for years to come due to low tax rates.
“If something close to current rates should prevail over the coming decades and if corporate tax rates also remain near the low level businesses now enjoy, it is almost certain that equities will over time perform far better than long-term, fixed-rate debt instruments,” he said.
This article originally appeared on MarketWatch.
