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Warren Buffett doesn't make money by predicting 'what's going to go on next week or next month'

Warren Buffett
Gerry Miller | CNBC

If you ask legendary investor Warren Buffett how today's news will impact the stock market — whether it's the coronavirus outbreak or the tariff situation — he's probably not worried.

That's because Buffett doesn't let headlines affect his investment choices. Instead, he's looking long term: "The real question is where are these businesses going to be five and 10 and 20 years from now?" he told Becky Quick on CNBC's "Squawk Box" on Monday. "Some of them will do sensationally, some will disappear."

With that in mind, Buffett doesn't even try to guess how current events will play out in the market. "I don't think I can make money by predicting what's going to go on next week or next month," he said. "I do think I can make money by predicting what will go on in the next 10 years."

When Buffett invests in a company, he doesn't plan to sell it anytime soon. He purchased See's Candies with longtime business partner Charlie Munger in 1972 and spent more than $1 billion on Coca-Cola stock in 1988 — both of which turned out to be good long-term bets and both of which he still owns today.

While Buffett admits that the stock market is "a little softer than it was six months ago" and that a number of his companies are affected by events like coronavirus and Trump's trade war, he added that "business is down but it's down from a very good level."

Even when the market tanks, don't panic and sell, Buffett has said. Stay the course and trust your original plan. If you have a long-term investment strategy, you have plenty of time for your portfolio to recover from any dips. "The money is made in investments by investing and by owning good companies for long periods of time," Buffett told CNBC in 2016.

He also frequently recommends choosing low-cost index funds over picking individual stocks. "The trick is not to pick the right company," he told CNBC's "On The Money" in 2017. "The trick is to essentially buy all the big companies through the S&P 500 and to do it consistently."

In the long run, "I think America will do very well," he told Quick. "It has since 1776."

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