VMD - Warren Buffett: 3 Stocks to Buy and Sell Before the New Year

The COVID-19 pandemic has cast a shadow over the 2020 holiday season. Gone will be the traditional celebrations that typically close out and open the year. Investors have looked for guidance from legends like Warren Buffett in 2020. Today, I want to look at three stocks to buy and sell as we look at what the Oracle of Omaha is doing right now. Let’s jump in.

Get away from gold right now

Historically, Warren Buffett has not been a fan of gold. He has consistently advocated for top stocks on the S&P 500 over betting on the yellow metal. Investors were surprised when Berkshire Hathaway added a $500 million stake in Barrick Gold in the summer. At the time, gold was on a record run that would see the spot price rise above $2,000/ounce.

In the third quarter, Berkshire Hathaway dumped over 40% of its Barrick Gold stake, indicating a quick move away from gold for Warren Buffett. Indeed, gold has retreated into the fall and winter while digital currencies like bitcoin have exploded. Investors should stray away from top gold producers like Yamana Gold in this environment.

Shares of Yamana have climbed 40% in 2020 as of close on December 22. While the increased gold price will boost its profitability in the near term, gold stocks have likely hit their ceiling in the near term.

The Oracle of Omaha: Cash is king

Earlier this month, I’d discussed some troubling signals from one of Warren Buffett’s favourite economic indicators. The Buffett indicator shows that domestic and global stocks are overheated right now. That does not necessarily precipitate a market crash, but it should get investors thinking about a potential pullback. Investors who want to emulate Warren Buffett should not shy away from stashing more cash in the near term.

That may mean taking profits in some of the high-performing stocks during the fall rally. A new string of restrictions and lockdowns are bound to generate uncertainty as we enter 2021. Vaccines are rolling out, but the economic devastation wrought by the pandemic will linger for years to come. In this environment, investors with liquidity can take huge advantage.

Warren Buffett is buying these stocks right now

What’s Warren Buffett looking to take advantage of right now? Berkshire Hathaway made a move for top healthcare firms in Q3 2020. These included companies in the vaccine race like Pfizer and Merck . Pfizer was the first company to announce a breakthrough, and its vaccine is already making its way to Canadians this month. Millions more doses are expected in the months ahead.

Canadians should look south for exposure to companies with vaccine interests, but that does not mean their options are exhausted in the healthcare space. VieMed Healthcare (TSX:VMD) (NASDAQ:VMD) and WELL Health (TSX:WELL) are two exciting TSX stocks in the healthcare sector that have surged during the pandemic.

VieMed provides durable in-home healthcare to its client base, and it has seen its profit increase during the COVID-19 pandemic. One of the reasons for this is its experience in supplying ventilators. It has played a key role in aiding the public and private sector as they battle this highly contagious respiratory illness. Shares of VieMed have increased 26% in 2020 as of close on December 22.

WELL Health stock has erupted on the back of the proliferation of telehealth. Telehealth is the use of digital information and communication technologies to provide health care services remotely. WELL Health has reported record use of its telehealth services in recent quarters.

Its shares have climbed 420% so far this year. Warren Buffett is buying healthcare stocks right now, and Canadians should follow suit.

The post Warren Buffett: 3 Stocks to Buy and Sell Before the New Year appeared first on The Motley Fool Canada .

Fool contributor Ambrose O'Callaghan has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Viemed Healthcare Inc.

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