# Warren Buffett's 7 Words for Market Downturns

> Buffett's 7 words help investors buy cheap during market crashes.
- Title: Warren Buffett's 7 Words for Market Downturns · Yahoo Finance
- Summary: Buffett's 7 words help investors buy cheap during market crashes. Buffett's 'bad news is an investor's best friend' shows downturns create discounts for…
- Keywords: warren buffett, market downturn, investor strategy, s&p 500, stock prices, bad news, long-term investing, business, finance, Warren, Buffett's, Words
- Source: Yahoo Finance — https://finance.yahoo.com/markets/stocks/articles/7-words-warren-buffett-could-133500900.html
- Published: 2026-09-17T13:35:00+00:00
- Read time: 1 min
- Topics: warren buffett, market downturn, investor strategy, s&p 500, stock prices, bad news, long-term investing, business, finance
## Buffett's 7 words for market downturns
Warren Buffett wrote seven words during the 2008 financial crisis that help investors see market downturns as buying opportunities.

> Bad news is an investor's best friend
## Why bad news helps investors
Bad news creates fear that pushes stock prices below fair value, allowing investors to buy at discounts.
## Historical market corrections
Since 1980, the S&P 500 has had average yearly declines of 14% but annual returns of 13.3% including dividends.
## Post-correction returns
After a 10-19% market drop, the S&P 500 typically gains 30% in the next year; after a 20% drop, it gains 37%.
## Buffett's key insight
Stocks feel safest when prices are high but that's when they're most expensive; they feel most dangerous when prices are low but that's when long-term returns are best.
## When to buy during downturns
Investors with long time horizons should use market downturns to add to investments, not avoid them completely.
## Key takeaway

Buffett's 'bad news is an investor's best friend' shows downturns create discounts for long-term investors.