What would Warren Buffett do with ASX shares during a market selloff?

Market selloffs can rattle even the most seasoned investors. Red screens, falling prices, and gloomy headlines can make it feel like the best move is to run for cover.

But if there’s one voice of reason that long-term investors turn to in moments like these, it is Warren Buffett.

So, what would the world’s most famous investor do with ASX shares during a market dip?

What would Warren Buffett do with ASX shares in a selloff?

While Buffett doesn’t invest directly in the Australian market, his principles are universal — and surprisingly simple.

The Oracle of Omaha once said:

Be fearful when others are greedy, and greedy when others are fearful.

This is perhaps Buffett’s most quoted piece of wisdom — and for good reason. When the market is panicking, valuations often detach from reality. Quality ASX shares get sold off alongside struggling ones, and emotion starts driving prices more than fundamentals.

Don’t panic

For Warren Buffett, a selloff is not a time to panic — it is a time to look for opportunity. A market pullback, in his view, is a sale. The key is knowing what you’re buying and whether you’d be happy to hold it for the next 10 years. He once stated:

If you aren’t willing to own a stock for ten years, don’t even think about owning it for ten minutes.

The Berkshire Hathaway (NYSE: BRK.B) leader doesn’t try to time the market. He looks for great businesses with strong economics, reliable earnings, and competent management — then holds them. If those qualities haven’t changed during a market selloff, he’s not selling. In fact, he might be buying more.

For ASX share investors, this could mean focusing on companies with durable competitive advantages, strong balance sheets, and long-term tailwinds.

Think leading names in infrastructure, healthcare, and tech with global reach — not speculative punts. This could mean companies like Goodman Group (ASX: GMG), CSL Ltd (ASX: CSL), or Xero Ltd (ASX: XRO).

Take advantage of fear

Buffett has made some of his best investments during moments of widespread fear. During the Global Financial Crisis, he stepped in to back major US institutions. Not because he had a crystal ball — but because he trusted the long-term recovery of quality businesses.

For Aussie investors, that might mean using selloffs to gradually add to high conviction positions, or buying into broad-based ASX ETFs when prices are lower. It is not about loading up all at once — it is about being ready when others are retreating.

Reassess

Warren Buffett famously quipped:

Only when the tide goes out do you discover who’s been swimming naked.

A sharp market correction doesn’t just reveal bargain ASX shares — it reveals the risks you might have missed. Overleveraged companies, unsustainable business models, or speculative plays without profits often get exposed when the music stops.

Buffett uses market selloffs not just to buy — but to reassess what he owns. Is the business resilient? Is the management team trustworthy? Is the competitive edge still intact? If the answer is yes, he holds. If not, he is likely to move on.

Foolish takeaway

Warren Buffett doesn’t try to predict the next move in the market. He stays calm, focuses on what he understands, and uses volatility to his advantage. And if he were looking at ASX shares during the current selloff, odds are he’d be sharpening his pencil, not sitting on his hands.

Because as Buffett said:

Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble.