3 Stocks That Pass the Warren Buffett "Tides" Test
In his 1992 letter to Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) shareholders, Warren Buffett coined the phrase, "It's only when the tide goes out that you learn who's been swimming naked." The initial quote was a reference to the insurance industry, which had been hit hard by claims relating to Hurricane Andrew that year. As Berkshire Hathaway is a large insurer itself, he sought to contrast its conservative underwriting posture with the business styles of its competitors.
Yet Buffett takes the "swimming naked" ethos beyond his company's insurance operations to its stock investments too, which is why he tends to select wide-moat companies, often with stellar balance sheets, and trading at low-to-reasonable valuations. You'll find several "well-clothed" businesses that survived and even thrived during the pandemic in Berkshire's current portfolio.
Amid today's market volatility, those in or near retirement -- or really, anyone looking for safe-haven stocks -- would benefit by adding these three to their portfolios.
Source Fool.com
