Buffett’s Warning as Stocks Plunge: ‘The Light Can at Any Time Go From Green to Red’

The S&P 500 descends into correction territory following President Trump‘s tariff declarations.

What Happened: Stock prices plummeted in response to President Trump’s sweeping 10% tariffs on all U.S. trading partners announced the day before.

This move has sparked concerns over a potential trade war and heightened inflation, both of which could steer the U.S. towards an economic slowdown. Consequently, the S&P 500 has now dipped over 11% from its February peak, indicating its entry into correction territory.

Renowned investor Warren Buffett, in his 2017 letter to shareholders, recommended a 19th-century poem as a tool to maintain composure during stock market downturns.

“There is simply no telling how far stocks can fall in a short period.” But should a major decline occur, he continued, “heed these lines” from Rudyard Kipling’s classic poem “If,” Buffett wrote.

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Buffett drew from Rudyard Kipling’s 1895 poem, “If you can keep your head when all about you are losing theirs. If you can wait and not be tired by waiting. If you can think and not make thoughts your aim. If you can trust yourself when all men doubt you. Yours is the Earth and everything that’s in it.”

“No one can tell you when these will happen. The light can at any time go from green to red without pausing at yellow,” Buffett wrote in 2017.

Why It Matters: Buffett perceives downturns as “extraordinary opportunities” and encourages investors to adhere to their long-term plans and continue investing, irrespective of whether a decline is temporary or extended.

He underscores that downturns are frequently succeeded by the market resuming its upward trend, and advises investors to seize these opportunities.