Buffett began the meeting by discussing prior times of hardship he’s lived through, such as the Cuban missile crisis and the Cold War, the 9/11 terrorist attacks and the Great Recession of 2008. Every time it seemed that times were bleak, he said, America eventually recovered.
The Oracle of Omaha conceded that the coronavirus outbreak is a vastly different challenge than those other national emergencies. But Buffett remains upbeat.
“This country, in 231 years, has exceeded anybody’s dreams.” Buffett said.
Buffett, who backed Hillary Clinton in the 2016 presidential election, also said he would not talk about politics at the meeting.
But he praised Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, for his handling of the Covid-19 outbreak.
Bullish but cautious
Buffett did not share any thoughts on when he thinks the US will recover from the worst of the pandemic. But he is convinced that better days lie ahead, and he urged investors to be cautious.
“You can bet on America but you’re going to have to be careful about how you bet,” he said. “Markets can do anything.”
He also stressed that investors need to stay in stocks over a long period of time since they will continue to be better bets than bonds.
“America’s tailwind is not exhausted,” Buffett said.
Buffett conceded that these moves could eventually lead to problems down the road because of the swelling of the size of the Fed’s balance sheet. But the Fed had no alternative, he said.
“We do know the consequences of doing nothing,” Buffett said, adding that Powell’s actions are the equivalent of “whatever it takes, squared.”
That’s a reference to a 2012 quote by former European Central Bank chief Mario Draghi, about the ECB’s moves to do everything it could to prop up the eurozone during the that year’s sovereign debt crisis.
An empty arena
Tens of thousands of people typically descend on the Nebraska city for the Berkshire shareholder meeting in order to listen to Buffett and vice chairman Charlie Munger discuss the market and economy.
But Munger, who is 96, was not at the meeting Saturday. Buffett was joined on stage by another Berkshire vice chairman, Greg Abel.
Abel, who runs Berkshire’s non-energy businesses, is one of two executives viewed as likely successors to Buffett, who turns 90 in August, as CEO. The other is Ajit Jain, the vice chairman who runs the insurance operations.
But many of its consumer businesses, which include Dairy Queen, Fruit of the Loom, Duracell and Benjamin Moore paints, have been hit hard by the Covid-19 outbreak.
Buffett has also talked frequently over the past few years about his desire to make another big acquisition, and he certainly has the money to do so. As of the end of the first quarter Berkshire Hathaway had $137.3 billion in cash on its balance sheet. His last major purchase was the 2015 deal for aerospace equipment company Precision Castparts.
Buffett had been concerned that prices were too high for many takeover targets.