Warren Buffett was fairly cautious with his bets last year after the 2020 stock market crash. And while we can only speculate at this point, there is reason to believe that he will continue to remain cautiously optimistic over the course of the market. new Year. He didn’t save the truck on stocks when they plunged in February and March. If I had to guess, there is no rush to put Berkshire Hathaway a massive mountain of cash to work on anytime soon, as many other investors with the FOMO (fear of missing out) mentality have been in recent months.

Does the man think another stock market crash will be in the cards over the next year? Will it be caused by negative surprises related to the COVID-19 pandemic? Or does Buffett think the potential returns will be dampened over the next decade?

While we might be in another market crash this year, I don’t think Warren Buffett is looking to play another vicious, liquidity-digging market meltdown. Why? The US Federal Reserve is likely to step in before things get out of hand, as they did almost a year ago.

Warren Buffett is also not a raging bull in this stock market. He seems more than willing to wait until the end until he sees more opportunities to grab stocks at massive discounts relative to their intrinsic value ranges. In the meantime, I expect him to maintain his cautiously bullish stance by picking up defensive stocks from wonderful companies that most other investors may be sleeping on.

Play defense while others play offense

In previous articles, I went into detail about recent Buffett moves (healthcare companies, Barrick Gold (TSX: ABX) (NYSE: GOLD), grocers and Japanese trading companies sogo shosha), underscoring the defensive nature of these bets.

With an expensive stock market and many uncertainties still awaiting us, I would expect Buffett to continue investing as if he believes we are in the latter stages of the market cycle, rather than dealing with the stock market crash. of the coronavirus as the end of the old cycle and the start of a new.

What are some Canadian stocks to buy if you want to play with cautious optimism like Warren Buffett?

Barrick Gold is an obvious first choice. Although Berkshire reduced its stake late last year, I wouldn’t be at all surprised to hear of a re-accumulation of shares, given the recent drop in Barrick shares.

Warren Buffett was never a big fan of gold, often remarking its “unproductive” nature of time. Having said that, we are in a strange market environment that requires unevenly unusual movements. Bonds are the most thankless in recent memory, making the opportunity costs of holding gold the lowest they have been in recent memory. With deep uncertainty, inflation risks, and bubbles floating around the stock market, I think we’ve reached a point where even past gold critics would rather keep the shiny yellow metal than bonds at these rates.

Barrick Gold: A golden opportunity to invest alongside Warren Buffett?

For those looking to mirror Warren Buffett’s defensive moves, Barrick Gold is a solid bet. The well-managed producer can exploit an “unproductive” asset. Still, it is undeniable that he is overflowing with money. Additionally, the company has been increasing its dividend lately like nobody’s business, a trend that I suspect will continue as gold continues to appreciate over the next 18 months.

Barrick sports a 1.55% yield and is an inexpensive way to profit deeply if you think Bank of America is correct in predicting that the price of gold will reach US $ 3,000 by 2022.

Like Buffett, I may not be a big fan of long-term gold holding. Having said that, I am a fan of the risk / reward profile in this current market environment. Whether you are looking to preserve your wealth, increase your wealth, or better manage inflation risks, I would seek to gain at least some (2-4% of the total portfolio) exposure to precious metals through miners like Barrick or bullion ETFs like SPDR Gold Trust if you haven’t already.

Silly contributor Joey frenette owns shares of Berkshire Hathaway (B shares) and SPDR Gold Trust. The Motley Fool owns shares and recommends Berkshire Hathaway (B shares) and recommends the following options: $ 200 short put options in January 2021 on Berkshire Hathaway (B shares) and $ 200 long calls in January 2021 on Berkshire Hathaway (B shares).