The 2020 stock market crash hasn’t shaken my faith in the wisdom of share investing. Sharp market corrections because of social, economic and geopolitical earthquakes are temporary. The possibilities for UK share investors to make huge returns over the long run is eternal. It’s why stock markets have been around for centuries.
Thinking like Buffett
It’s human nature to be shaken when you see the value of your UK shares fall through the floor. So it’s worth seeking the advice of experts when stock markets crash. Listening to billionaire investor Warren Buffett, for example, is a particularly good idea.
Signifying the endurance of stock markets, the so-called ‘Oracle of Omaha’ once said: “In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.”
This is why Buffett believes strongly in buying equities after stock market crashes. This strategy allows UK share investors to buy top-quality companies which have been oversold during the panic. These can then be sold at a later time at a much higher price.
2 top UK shares on my radar
There are plenty of five-star UK shares I’m thinking of buying after falling in value following the Covid-19 crisis. Here are a couple near the top of my list:
- As I explained in a recent article, buying UK shares that are exposed to the e-commerce sector is a brilliant idea. Online shopping volumes have rocketed over the past decade, as we all know. But the boost e-commerce has received following mass Covid-19 lockdowns has been explosive. The long-term profits outlook of JD Sports Fashion has received a significant boost in 2020 and it plans to rapidly expand its existing e-commerce operations as a result. I’d also buy this FTSE 100 stock given its market-leading position in the fast-growing athleisure market.
- Tharisa has recovered a lot of ground following the stock market crash of late February and early March. But it still remains lower from these prior levels and consequently it trades on a forward P/E ratio of 8 times today. And I think this makes it a steal. This UK share pulls platinum group metals (PGMs) out of the ground in South Africa. And it can expect demand for its product to rise in the years ahead. Firstly, investor off-take should grow as inflationary concerns bolster demand for the PGMs as safe-haven assets. And secondly, sales to the auto sector should bounce back strongly as car production recovers and green legislation requires greater loadings of the metal, used in car exhaust systems to help clean emissions.
