Warren Buffett is without doubt one of the most revered traders on this planet, with shares in his firm Berkshire Hathaway reaching eye-watering highs.

However the highway to this success was not a straightforward one. Over time, Buffett’s managed to navigate the risky waters of worldwide markets, escaping a number of the worst tragedies of the previous century. So when the person supplies recommendation, it pays to pay attention!

Whereas some really feel his fashion’s outdated and imperfect for at the moment’s world, sure recommendation by no means ages. With worry and uncertainty gripping markets worldwide, I’m taking solace in his ageless knowledge.

Keep disciplined

Each investor ought to have a method they keep on with, irrespective of the market. This helps keep away from making rash choices.

I’ve sometimes overpaid for shares however the worst mistake I’ve made is promoting too quickly. Now I at all times deal with the basics and do cautious analysis earlier than shopping for OR promoting.

Keep away from market timing

This ties in with the above level. Attempting to catch excessive and low costs seldom works. Many crashing shares preserve falling, whereas some at document highs preserve climbing.

In the long term, investing in high-quality companies and holding via highs and lows often pays off. To paraphrase Rudyard Kipling, preserve your head when all about you’re dropping theirs.

If there’s one bit of recommendation that profitable traders share, it’s to stay rational whereas others panic.

Be contrarian

Arguably, Buffett’s most well-known quote is: “Be fearful when others are greedy and greedy when others are fearful.”

In line with the worry and greed index, worry at present drives the market. That’s a step down from a month in the past when it was greed, and an enormous change from this time final yr, when it was excessive greed.

That means now could also be a superb time for contrarian traders to greedily hunt for undervalued shares.

A possible instance?

One inventory that would match that standards is Occidental Petroleum (NYSE:OXY). Berkshire Hathaway lately purchased 8.9m extra shares within the firm after offloading inventory in Apple.

Regardless of having fun with sturdy development post-Covid, the inventory’s tumbled 20% this yr. The price is now solely 12.6 instances earnings per share (EPS), properly under the US market common of 18.3.

This means it’s undervalued however that alone doesn’t imply the price will recuperate. Oil is a risky trade, with provide points inflicting large dips and ramping up prices. Any interruption to the provision chain might ship the share price tumbling.

A rising trade

To precisely worth oil and gasoline shares, it’s necessary to contemplate the place the trade’s headed. Regardless of an increase in inexperienced power, oil demand’s anticipated to proceed rising. The US Vitality Info Administration (EIA) expects international oil manufacturing to develop by 1.6m barrels a day in 2025.

The place does Occidental slot in? In line with its Q3 outcomes, Occidental averages 1.4m barrels of oil equal a day (Mboed), up from round 1.2m final yr. It additionally introduced a $4bn debt discount and pre-tax revenue of $304m, exceeding steerage.

All issues thought-about, it seems to be an undervalued inventory that’s performing properly in a high-demand trade. I’m not shocked Buffett likes it!

Sadly, I don’t have the spare capital to put money into Occidental at the moment. Nevertheless, I feel it’s price contemplating for traders seeking to diversify into power.