Buffett’s Track Record
Berkshire Hathaway has delivered strong results under Buffett’s lead. From the 1960s to now, it posted an average yearly return of 19.9 percent. That figure nearly doubles the S&P 500’s long-term average of about 10 percent. These gains held up through tough times, like the 1973-74 bear market and the 2008 financial crisis. Volatility hit hard in those years, yet Buffett’s approach kept the company on track. This record shows his method works over decades.
Current Market Context
The U.S. economy faces fresh challenges. Tariffs on imports and exports stir up uncertainty. They raise costs for businesses and could slow growth. At the same time, stock prices for many American companies sit at all-time highs. Valuations, or how much investors pay per dollar of earnings, look stretched. The S&P 500’s price-to-earnings ratio recently topped 25, well above its historical average of 15 to 16. Such conditions often spark sharp drops. History backs this: similar setups led to the 2000 dot-com bust and the 2022 market dip. Renewed swings seem likely, and investors must prepare.
Buffett’s Core Advice
Buffett urges calm in chaos. He treats fear as a key ally. When markets plunge and panic spreads, prices fall below true worth. Smart buyers step in. This mindset turns turmoil into gain. Buffett often says fear helps spot bargains.
He also stresses picking solid businesses over hot stocks. Stocks are just shares in companies. Focus on what the business does, its products, and its edge in the market. Ignore daily price ups and downs. Fundamentals like revenue growth and profit margins matter more. This view keeps investors grounded. It avoids the trap of chasing trends or selling in fear.
The American Express Example
Buffett’s 1960s move into American Express highlights his strategy. Back then, a fraud case rocked the firm. A trader named Anthony De Angelis ran a scheme at Allied Crude Vegetable Oil. He faked oil stocks in warehouses. American Express insured those stocks through its subsidiary. When the scam broke in 1963, lawsuits piled up. The stock price tumbled 50 percent in weeks. Sellers dumped shares in a rush.
Buffett saw the real story. The fraud hurt the storage unit, but the core operations stayed strong. American Express ran traveler’s checks and charge cards. People still trusted those services. Demand held steady. Buffett bought shares cheap, at a steep discount to their real value. He bet on the company’s recovery.
That bet paid off big. American Express bounced back fast. It cleared legal hurdles and grew its card business. Today, in 2025, it stands as a $238 billion powerhouse. Berkshire still holds it as its second-biggest stake, worth tens of billions. This case proves a point: market storms hide gems. Patient eyes on business strength win out.
The core lesson rings true. Volatility shakes out the weak but rewards the steady. Investors who tune out noise and bet on quality reap the rewards over time.
As global markets face heightened uncertainty in late 2025, with US tariff impacts rippling across economies and valuations reaching historic highs, Warren Buffett’s time-tested investment principles offer crucial guidance for investors. This analysis examines Buffett’s approach to volatile markets and explores specific implications for Singapore investors navigating an increasingly complex financial landscape.
The Oracle’s Proven Track Record
Warren Buffett’s investment firm, Berkshire Hathaway, has delivered an average annualized return of 19.9% since the 1960s—essentially double the S&P 500’s performance over the same period. This remarkable achievement is particularly noteworthy because it was accomplished while weathering numerous market crises, including the 1973-74 recession, the 1987 crash, the dot-com bubble, the 2008 financial crisis, and the 2020 pandemic selloff.
The consistency of Buffett’s outperformance across multiple market cycles demonstrates that his approach isn’t dependent on favorable market conditions. Rather, his philosophy actually thrives during periods of volatility and uncertainty.
Core Principle #1: “Widespread Fear Is Your Friend”
The Contrarian Mindset
Buffett’s most famous advice about market volatility is elegantly simple: “Be fearful when others are greedy, and greedy when others are fearful.” This contrarian approach recognizes that market prices often disconnect from underlying business values during periods of extreme emotion.
When panic selling grips markets, quality businesses frequently become available at significant discounts to their intrinsic value. The challenge for most investors is psychological—having the courage and capital to buy when everything appears to be falling apart.
The American Express Case Study
The 1960s American Express scandal provides a masterclass in applying this principle. When Allied Crude Vegetable Oil’s fraud was exposed, American Express faced potential legal liabilities because its warehousing subsidiary had issued receipts certifying the fraudulent inventory. The stock plummeted approximately 50% as investors fled.
However, Buffett recognized several critical factors:
- Business Segregation: The traveler’s cheque and card business remained fundamentally sound and unaffected by the scandal
- Brand Resilience: American Express’s reputation with consumers hadn’t been materially damaged
- Pricing Opportunity: The market was pricing in catastrophic outcomes that seemed unlikely given the business fundamentals
- Long-term Potential: The payment processing and lending business had strong growth prospects
Buffett invested heavily during the panic, and American Express recovered to become one of Berkshire Hathaway’s most successful investments, now valued at $238 billion and still holding the position as Berkshire’s second-largest equity holding in 2025.
Singapore Context: Recent Market Volatility
Singapore investors have witnessed similar panic-driven opportunities in recent years. During the COVID-19 market crash in March 2020, the Straits Times Index plunged nearly 30% in weeks. Quality Singapore blue chips like DBS Group, Singapore Airlines, and CapitaLand traded at multi-year lows, presenting significant buying opportunities for those with liquidity and conviction.
The key lesson: volatility creates mispricing. For Singapore investors with a long-term horizon, market panics can be wealth-building opportunities rather than wealth-destroying events.
Core Principle #2: “Pick Businesses, Not Stocks”
The Business Owner Mentality
Perhaps Buffett’s most fundamental advice is to think like a business owner rather than a stock trader. When you buy a share, you’re purchasing a fractional ownership in an actual operating business. The stock price is merely the market’s current estimate of what that ownership stake is worth—and markets are frequently wrong in the short term.
This mindset shift has profound implications:
- Focus on Fundamentals: Analyze revenue, profits, competitive position, management quality, and growth prospects rather than chart patterns or momentum
- Ignore Daily Price Fluctuations: If you wouldn’t sell an entire business based on one month’s performance, why sell stocks based on daily price movements?
- Long-term Perspective: Great businesses compound value over decades, not quarters
- Quality Over Price Action: A wonderful business at a fair price beats a mediocre business at any price
American Express: The Business Analysis
When evaluating American Express during the scandal, Buffett focused on the business metrics that mattered:
- Market Position: Dominant position in traveler’s cheques and growing card membership
- Network Effects: The more merchants accepted American Express, the more valuable cards became to consumers, and vice versa
- Customer Loyalty: High-income customers demonstrated strong brand affinity
- Revenue Model: Fee-based income provided predictable cash flows
- Growth Runway: Credit card penetration was still in early stages in the 1960s
None of these fundamental business qualities had changed due to the scandal. The stock price crashed, but the business remained robust.
Singapore’s Quality Business Universe
Singapore offers investors access to numerous high-quality businesses with strong fundamentals:
Financial Sector: DBS Group, OCBC Bank, and UOB represent three of the strongest banking franchises in Southeast Asia, with excellent capital positions, diversified revenue streams, and exposure to the region’s economic growth. These banks have consistently demonstrated resilience through multiple crises.
Real Estate: CapitaLand Investment and City Developments possess substantial land banks, strong balance sheets, and diversified property portfolios across asset classes and geographies. The sector’s cyclicality can create attractive entry points during downturns.
Transportation & Infrastructure: Singapore Airlines, despite cyclical challenges, maintains one of the world’s strongest airline brands and a strategic position in global aviation. SATS operates essential airport services across multiple countries.
Telecommunications: Singtel provides essential connectivity services with stable cash flows, though facing technological disruption challenges that require careful analysis.
Healthcare: Raffles Medical Group offers exposure to Singapore’s aging population and premium healthcare demand.
For Singapore investors applying Buffett’s principles, the task is identifying which of these businesses possess sustainable competitive advantages, strong management, and attractive valuations—particularly during periods of market stress.
Current Market Environment and Implications
Global Uncertainty Factors (October 2025)
The article notes several concerning trends:
- US Tariff Impacts: Trade policy uncertainty affecting global supply chains and economic growth
- Record Valuations: American stocks reaching historically high price-to-earnings ratios
- Economic Uncertainty: Potential for significant market corrections
Singapore-Specific Considerations
Singapore’s economy faces unique challenges and opportunities in this environment:
Trade Dependencies: As a major trading hub, Singapore is particularly sensitive to global trade disruptions. US tariff policies could significantly impact trade volumes through Singapore’s port and affect multinational corporations based here.
Financial Hub Status: Singapore’s position as a regional financial center means market volatility can impact wealth management, banking, and professional services sectors—significant components of the economy.
Currency Dynamics: The Singapore dollar’s managed float policy means MAS (Monetary Authority of Singapore) may adjust the currency band in response to external shocks, affecting import/export dynamics and investment returns.
REIT Sector Vulnerability: Singapore’s substantial REIT sector (one of Asia’s largest) could face pressure if interest rates remain elevated or property values decline. However, this could also create buying opportunities in quality REITs with strong assets and conservative leverage.
Regional Exposure: Many SGX-listed companies have significant operations across Southeast Asia. Regional economic conditions, particularly in China, Malaysia, Indonesia, and Thailand, directly impact their performance.
Applying Buffett’s Wisdom: Practical Steps for Singapore Investors
1. Build a Cash Reserve
Buffett’s ability to capitalize on market panics stems partly from maintaining substantial cash reserves. Singapore investors should:
- Maintain 3-6 months of emergency expenses in liquid accounts
- Keep 10-20% of investment portfolio in cash or near-cash instruments
- Consider Singapore Savings Bonds or T-bills for capital preservation with modest returns
- Use CPF Special Account (4% guaranteed) for medium-term safe returns
2. Create a Watchlist of Quality Businesses
Identify businesses you’d want to own at the right price:
- Blue Chips: STI component stocks with long operating histories
- Growth Stories: Companies with strong competitive positions in growing markets
- Dividend Aristocrats: Firms with consistent dividend payment histories
- Regional Champions: Singapore-based companies with Pan-Asian operations
Research these companies thoroughly during calm periods so you can act decisively when prices become attractive.
3. Develop Valuation Frameworks
Understand what represents “good value” for your target companies:
- Price-to-Earnings Ratios: Compare current P/E to historical ranges and sector averages
- Price-to-Book Value: Particularly relevant for banks and property companies
- Dividend Yields: Singapore investors often focus on income; understand sustainable payout ratios
- Return on Equity: Measures management’s efficiency in deploying capital
- Free Cash Flow: The ultimate measure of business quality
4. Ignore Market Noise
Singapore investors face unique media challenges:
- Regional News Overload: Events in China, US, and Europe dominate headlines but may not affect your specific holdings
- Short-term Focus: Financial media emphasizes daily movements; focus on quarterly and annual results
- Peer Pressure: Coffee shop talk and social media can create FOMO; stick to your investment thesis
5. Think in Decades, Not Days
Singapore’s mandatory CPF system actually provides an advantage here—it forces long-term thinking for retirement savings. Apply the same mindset to your discretionary investments:
- 10-Year Horizon: Would you be happy owning this business for a decade?
- Compound Growth: Focus on businesses that can grow earnings steadily over time
- Tax Efficiency: Singapore’s lack of capital gains tax rewards patient investors who hold quality businesses long-term
Risk Management: What Buffett Gets Wrong (Sometimes)
While Buffett’s track record is extraordinary, Singapore investors should recognize his approach has limitations:
Concentration Risk
Buffett often takes large positions in few companies. Most individual investors lack the resources to thoroughly research businesses at his level and should maintain broader diversification.
Singapore Adaptation: The STI’s concentration in financial services means many Singapore investors are already overexposed to one sector. Consider balancing with international exposure through SGX-listed ETFs or global stocks.
Missing Technological Disruption
Buffett famously missed the early internet boom and has been cautious about technology investments. In Singapore’s context, this matters because:
- Fintech Disruption: Traditional banks face challenges from digital payment platforms and neobanks
- E-commerce Impact: Retail and logistics businesses are being transformed
- PropTech: Property technology could disrupt traditional real estate models
Singapore investors need to assess whether “old economy” businesses can adapt or whether they’re permanent value traps.
Survivorship Bias
We study Buffett because he succeeded. Many investors who bought during panics lost money because they bought poor businesses at cheap prices rather than good businesses at fair prices.
Singapore Consideration: Not every STI stock that falls 30% is a buying opportunity. Some businesses face permanent headwinds (e.g., print media, traditional retail). Distinguish between temporary setbacks and structural decline.
Sector-Specific Analysis: Singapore Opportunities in Volatile Markets
Banking Sector
Buffett’s Approach: Banks are classic Buffett investments when bought right. They benefit from economic growth, have relatively predictable business models, and generate consistent cash flows.
Singapore Application:
- DBS, OCBC, and UOB trade at reasonable valuations historically
- Strong capital ratios provide downside protection
- Regional growth exposure, particularly in China and Southeast Asia
- Interest rate sensitivity means performance varies with monetary policy
- Volatility Opportunity: Bank stocks often oversold during market panics despite strong fundamentals
REITs and Property
Buffett’s Approach: Buffett generally avoids REITs due to their structure and capital-intensive nature, preferring businesses that can reinvest earnings for growth.
Singapore Context:
- REITs dominate SGX and provide income focus
- Singapore’s REIT framework is well-regulated and transparent
- Caution Needed: High leverage and interest rate sensitivity make some REITs vulnerable during volatility
- Opportunity: Quality REITs with essential assets (logistics, healthcare, data centers) may offer value during selloffs
Singapore Airlines and Travel
Buffett’s Approach: Famously stated that airlines are terrible businesses with poor economics. However, he invested in several US airlines before the pandemic (and sold before the worst losses).
Singapore Application:
- SIA is arguably one of the world’s best-run airlines with strong brand equity
- Cyclical nature means extreme volatility during crises (COVID-19 demonstrated this)
- High Risk/Reward: Requires strong conviction and timing, not suitable for conservative investors
- Government backing provides implicit downside protection
Telecommunications
Buffett’s Approach: Likes businesses with pricing power and customer stickiness. Telecom can fit this profile but faces technological disruption.
Singapore Application:
- Singtel faces challenges from competition and technological change
- Regional investments (particularly in India via Bharti Airtel) add complexity
- Dividend yield attractive but sustainability questions exist
- Careful Analysis Required: Ensure dividends are sustainable from cash flow, not balance sheet engineering
Practical Portfolio Construction for Singapore Investors
The Core-Satellite Approach
Core Holdings (60-70% of portfolio):
- STI ETF or blue-chip Singapore stocks (DBS, OCBC, CapitaLand, etc.)
- Singapore Savings Bonds or T-bills (for stability)
- CPF Special/Medisave (for guaranteed returns)
Satellite Holdings (20-30%):
- Higher-growth Singapore mid-caps
- Regional exposure (Malaysia, Thailand, Indonesia)
- Global equity ETFs (S&P 500, developed markets)
- Sector-specific opportunities
Opportunistic Cash (10-20%):
- Dry powder for market dislocations
- Deploy during significant market downturns (15%+ corrections)
- Use to average into positions during volatility
Rebalancing During Volatility
Buffett’s approach suggests being more aggressive during panics, which might mean:
- Reduce Cash Allocation: Deploy reserves when quality businesses become cheap
- Increase Equity Exposure: Shift from bonds/cash to stocks during major selloffs
- Add to Existing Winners: If great businesses get cheaper, buy more
- Tax-Loss Harvesting: In Singapore, no capital gains tax, but still useful for recognizing losses and repositioning
Common Mistakes Singapore Investors Make During Volatility
1. Catching Falling Knives
Mistake: Buying stocks simply because they’ve fallen significantly Buffett’s Lesson: Buy great businesses at fair prices, not mediocre businesses at cheap prices Singapore Example: Some retail and hospitality stocks may never recover to pre-pandemic levels due to structural changes
2. Panic Selling Quality Holdings
Mistake: Selling strong businesses during temporary market weakness Buffett’s Lesson: If the business fundamentals remain intact, hold or buy more Singapore Example: DBS during COVID-19 saw significant share price declines but business model remained robust; patient investors were rewarded
3. Timing the Market
Mistake: Waiting for the “bottom” before investing Buffett’s Lesson: Time in the market beats timing the market; dollar-cost averaging into quality businesses works Singapore Application: Use RSP (Regular Savings Plan) to systematically invest monthly regardless of market conditions
4. Following Hot Tips
Mistake: Buying based on recommendations without understanding the business Buffett’s Lesson: Only invest in businesses you understand Singapore Context: Avoid speculation in penny stocks or companies with opaque operations, regardless of promised returns
5. Ignoring Currency Risk
Mistake: Not considering SGD strength/weakness when investing overseas Buffett’s Lesson: Understand all dimensions of risk Singapore Application: US investments expose you to USD/SGD fluctuations; consider hedged ETFs or maintain currency diversification
Looking Ahead: Preparing for Future Volatility
Build Knowledge During Calm Periods
- Read annual reports of companies you’re interested in
- Understand business models, competitive advantages, and risks
- Follow management commentary and strategy
- Calculate reasonable valuation ranges
Emotional Preparation
Buffett’s success partly comes from emotional discipline. Singapore investors should:
- Accept Volatility: Understand 30-50% drawdowns are normal in equities over decades
- Detach from Daily Prices: Check portfolios monthly or quarterly, not daily
- Have Conviction: Only invest in businesses you’ve researched and believe in
- Stay Patient: Wealth compounds over decades, not months
Continuous Learning
- Study past market cycles and how they resolved
- Learn from mistakes (both yours and others’)
- Understand macroeconomic indicators relevant to Singapore (PMI, retail sales, property prices)
- Follow quality investment commentary (but maintain independent thinking)
Conclusion: The Buffett Blueprint for Singapore Investors
Warren Buffett’s investment philosophy, forged over six decades of extraordinary returns, offers timeless wisdom for Singapore investors navigating volatile markets in 2025 and beyond. His core principles—embracing fear as an opportunity, focusing on business quality over stock prices, maintaining long-term perspective, and exercising emotional discipline—are universally applicable regardless of geography.
For Singapore investors specifically, several factors make Buffett’s approach particularly relevant:
- No Capital Gains Tax: Singapore’s tax structure rewards patient, long-term investing—exactly Buffett’s style
- Quality Blue Chips Available: SGX offers access to well-managed, financially strong businesses across multiple sectors
- Regional Growth Exposure: Many Singapore companies provide exposure to Southeast Asian economic development
- Strong Regulatory Environment: Singapore’s robust financial regulations protect investors and ensure transparency
- Volatile External Environment: As a small, trade-dependent economy, Singapore faces external shocks that create periodic buying opportunities
The current environment—with US tariff uncertainties, elevated valuations, and potential volatility—makes Buffett’s wisdom more relevant than ever. Rather than fearing market turbulence, prepared Singapore investors can view it as the inevitable price of admission for superior long-term returns.
The American Express example from the 1960s remains instructive today: when fear creates indiscriminate selling, those who can analyze businesses rather than stock prices, and who have the courage and capital to act, can build extraordinary wealth over time.
As Buffett has said, “The stock market is a device for transferring money from the impatient to the patient.” For Singapore investors willing to embrace this philosophy, volatile markets represent not a threat, but an opportunity.
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