Mondelez International Inc (MDLZ), General Motors Company (GM): Buffett Doesn’t Worry About the Market Crashing, and Neither Should You

Moreover, Suncor Energy Inc. (USA) (NYSE:SU) has a wide moat, as it is one of the industry leaders in oil-sands production and has international offshore oil-production facilities to boost cash flow. The company has achieved a three-year return on capital employed of 5.2%, or closer to 10% on an operating-income basis. It has returned 10% of the stock price to investors since 2011, and management is investing for the long term. They are only spending cash from operations on capital expenditures, with the rest being returned to investors — signs of fiscal prudence and a strong management team. The company also recently unveiled an additional $2 billion buyback funded by operating cash flow.

What’s more, even if the company does not spend to expand existing operations, there is no reason why shareholder returns cannot continue at the rate of 10% every two years based on current operating cash flows. This formula indicates a compounded total return of 100% within 7.2 years without any share price appreciation.

Buffett is not afraid of a market crash. The Oracle of Omaha is still putting cash to work, finding deals in the market and not panicking. You should be doing the same.