Stock market in autumn 2023: Good nerves are required - What investors can learn from Warren Buffett

Stock market in autumn 2023: Good nerves are required - What investors can learn from Warren Buffett

Good nerves are required on the stock market because the mood on stock exchanges worldwide is currently tense. More than just a correction is taking place, especially in the second row of stock markets. A countercyclical trading approach like Warren Buffett's could be helpful now. Investors should be fearful when others are greedy and greedy when others are fearful. Investors who entered the DAX in 2007 have only achieved a meager return of just under five percent per year since then. Courageous investors who invested in the DAX in spring 2009, on the other hand, have been able to achieve returns of around ten percent per year since then.

The negative news is increasing and safe havens such as gold and Bitcoin are in demand. In the foreign exchange markets, investors are fleeing into the dollar and the Swiss franc. The reporting season failed to dispel fear. In the penultimate week of October, the seven largest technology stocks in the US lost more than $500 billion in market capitalization. The prospects don't look any better in Germany either. Volkswagen's profit warning and Siemens-Energy's negotiations with the federal government about state aid illustrate the difficulties. Rising loan interest rates are increasingly putting pressure on the economy. Green technologies are becoming less attractive as the price becomes the focus.

As an investor you should be vigilant now. Not every stock that has fallen sharply is automatically a bargain. With the reporting season comes a reality check, especially with regard to the annual targets set. Fundamental valuations need to be reviewed. While the big US heavyweights like Apple still have sporty valuations, the European markets are attractive on paper. The Dax is now trading at a P/E discount of around 45 percent compared to the S&P 500, which is a record. The price level in the DAX already shows that weaker business development in the coming months has been priced in. The correction can be seen particularly clearly in the SDax and MDax. The Lufthansa share is an example of this. Despite positive business development, the price has fallen sharply.

The current situation on the stock market requires calm and careful analysis of the situation. A countercyclical trading approach can prove beneficial and it is important to have realistic expectations for the coming months.