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3 Warren Buffett stocks to buy in a bear market

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According to Warren Buffett, it’s a good thing when stock prices go down. Lower prices, according to Buffett, mean better opportunities to buy more shares in companies.

High inflation, rising interest rates and an uncertain political climate are driving down stock prices across the board and fueling a bear market. With that in mind, here are three stocks that I believe fit Warren Buffett’s parameters. I buy them as stock prices fall.

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Amazon

First on my list is the e-commerce giant Amazon (NASDAQ: AMZN). Amazon’s stock price is down more than 30% since the start of the year and I am using this decline to increase my investment in the company.

Amazon’s share price decline isn’t just the result of general market movements. The company’s latest earnings report was disappointing – the company reported a loss of $7.56 per share and its stock plummeted in response.

While I agree that Amazon’s performance over the past quarter has been disappointing, I think the market’s reaction is an overreaction to the company’s announcement that it was writing down the value of its investment in Rivian Automotive. As a result, I see this as a really good opportunity to add Amazon stocks to my portfolio.

StoneCo

I also bought shares in StoneCo (NASDAQ:STNE) recently. The Brazilian fintech’s stock has also struggled recently and its shares are now trading below $10. Considering Berkshire Hathaway was buying shares at around $31 when the company went public, I think the current stock price is quite attractive.

Like Amazon, StoneCo’s stock decline isn’t just due to factors affecting the market as a whole. Higher inflation in Brazil, an overambitious investment in Banco Inter and complications with the company’s lending business sent the stock down more than 85% last year.

I think a lot of StoneCo’s struggles will subside over time, though. The company’s balance sheet looks strong to me and while I see the risks associated with the stock, I’m happy to buy the stock at a very depressed price.

Verizon

The last stock I’m buying right now is Verizon Communications (NYSE:VZ). The stock is currently trading on a low price/earnings (P/E) ratio of around 9, but I don’t think that tells the whole story.

As a company, Verizon has approximately $147 billion in debt, which presents a risk to consider from an investment perspective. This must be paid before returns to shareholders.

Despite this, I think the company’s price is attractive. Even taking into account corporate debt, I think as a Verizon shareholder I can reasonably expect a return of around 8.56%.

As a 5G infrastructure company, I expect demand for Verizon’s services to remain fairly steady for the foreseeable future. Given this, I am very happy to buy shares at the current price of $48.

Summary

Amazon and StoneCo are two companies that expect substantial growth over time. Verizon is more of a solid and stable operation. In the current bear market, I’m happy to buy all three.