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Buy Low, Sell High. And by the looks of it, the market is going lower – and getting cheaper. But who is buying?

Not the famed value investors from Omaha, Warren Buffet & Charlie Munger. The legendary investors behind the success of Berkshire Hathaway are not investing their piles of cash after the coronavirus inspired stock market crash - and have recently stated that they have no plans as the markets swoon, rally, swoon again because they believe markets could be going even lower.

Like many traditional investors, investing folks have since 1987 bought the big dips, but with this most recent market bloodbath, there seems to be a skittish, even confused look for ‘cheap’ stocks’ to add to portfolios for the long term. As for the legendary duo, Munger and Buffet, whose Berkshire Hathaway currently sits on over a US$128 Billion of net cash, they are not touching the market – and would rather stay prudent during this unpredictable coronavirus episode.

For now, Munger’s strategy is just to “sit on your ass” and do nothing. Berkshire sold US$300 million worth of stocks during the stock market crash – they haven’t bought anything.

Here’s why:

Munger confided in a recent interview that with the current pandemic that has slammed the brakes on world economies, bringing them to a screeching full stop, he would rather go through this crisis with liquidity intact, as this situation is the worst they have ever seen.

As for this crisis, no one was or is prepared for it, and nobody knows what the future brings. When everything else is doubtful, best to take no action, with Munger citing that no one knows when or how long the recession will last and how much damage it will cause the economy. Even first world countries like Italy, the US and Singapore are taking a significant hit, which is now dragging the world towards a dark economic outlook – with no promise of a cure or vaccine immediately in sight.

It is going to get worse before it can get better, and we are maybe looking for more room on the downside with this market. This coming earnings season will paint the markets red as companies report to shareholders what the pandemic has done to their bottom line.

Munger also warned of more troubles ahead, and that the “wretched excesses” of corporate America will be exposed by the current situation. Some of these excesses will be questioned when Corporate America faces its investors and explain where the money went. A high-profile case in point is Boeing, having spent $100 billion on share buybacks in the last ten years but is now effectively being supported by American taxpayers to continue in business.

Value investors of all stripes and colors heed and look forward to Munger’s & Buffet’s annual address in May as a source of wisdom and direction. This year's event will be more than eagerly awaited. For the first time it will be conducted without a live audience but through technology streaming. Ironic given that Berkshire Hathaway has traditionally eschewed high technology investments. With their caliber raised in the pantheon of legendary fund managers, Charlie Munger ran an investment partnership that saw an average return of 20% per year from 1962 to 1975 at a time when the S&P gave only 5% returns. As for his stint in Berkshire Hathaway, the rest, as we all know, is history.

With these troubling and uncertain times ahead, we go back to the masters of investing and check what they are doing. And the best lesson yet from them, “when in doubt – do nothing, having said that, we are closely watching some healthcare, biotech and technology companies that show promise.