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Warren Buffett’s advice is timeless. It’s practical and keeps investors grounded in common sense.
In his 2016 letter to Berkshire Hathaway shareholders, Buffett shared one of his most useful reminders: “Every decade or so, dark clouds will fill the economic skies, and they will briefly rain gold. When downpours of that sort occur, it’s imperative that we rush outdoors carrying washtubs, not teaspoons.”
Seems obvious, right? If gold is pouring from the sky, you grab the biggest bucket you can find and sprint outside.
But Buffett left one thing out: You better be wearing a helmet, too.
Because when it’s raining gold, it’s not gently drifting down from the clouds. It’s coming in fast and hits hard. If you’re not prepared, the very thing you’re chasing could knock you out cold.
Most people don’t even make it out the door. They’re too gripped with fear. Staring out the window, worrying about the storm and overcome with anxiety about the damage. Meanwhile, Buffett and a few investors who’ve learned to spot these moments are out there, arms wrapped around washtubs, grinning ear to ear.
It’s easy to say you’ll be bold when the time comes. But in the moment, fear tends to win. That’s why it’s worth asking right now:
Are the skies starting to darken? Are we approaching another one of those rare downpours?
Because if you’re ready, with your helmet on and your bucket in hand, there are a few places where gold might be falling already.
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Buffett doesn’t make many short-term bets, but when he does, they’re usually backed by very old money and very old oil.
His company, Berkshire Hathaway, holds tens of billions in energy companies like Chevron Corp and Occidental Petroleum Corp. Oil and gas stocks are known for paying an attractive dividend, but they’re also a play on long-term demand and the reality that global energy shocks can still trigger massive upside for oil-heavy portfolios.
Recent escalations in the Middle East, particularly between Iran and Israel, are a reminder of how quickly the global oil supply can tighten. If conflict disrupts exports or infrastructure, crude could spike, and energy stocks with it.
You don’t need to pick individual stocks to get exposure. The Energy Select Sector SPDR Fund (NYSE:XLE) holds major names across the oil and gas industry and provides a simple way to position for a surge in energy prices.
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