After a lapse of two years, the annual shareholders meeting of Berkshire Hathaway, led by Buffett, was held offline again.
Buffett, who will turn 92 this year, and 98-year-old Buffett, who will turn 92 this year, will be joined in a five-and-a-half-hour Q&A session starting Saturday, April 30, 2022 at 9:15 a.m. CST (10:15 p.m. GMT). The Munger will partner again, responding to many issues of concern from the outside world. The main points of the general meeting of shareholders summarized by Wall Street are as follows:
Buffett: Inflation “deceives almost everyone”, not just stock market investors; no one knows what inflation will look like in ten or twenty years’ time; the best defense against inflation is to invest in your own skills.
Buffett: Never buy stocks based on guesswork. There is no perfect timing. March 2020 completely missed the timing; what we are good at is figuring out when we have enough money for ourselves.
Buffett: Wall Street is turning the stock market into a “casino”, preferring a monkey who throws darts but doesn’t charge management fees, rather than a financial advisor; Munger: Today’s stock market is “almost a speculative frenzy”, Robinhood engages in short-term gambling, Canada The practice of extra commissions is despicable, and they are about to “disintegrate”.
Buffett: Buybacks increase Berkshire’s stake in American Express from about 11% to 20%; buybacks should be bought at attractive prices, implying high Berkshire prices; emphasis on cash in case of 2020 crisis repeat.
Buffett: Before buying Alleghany, he received an email recommendation and has been following the company for 60 years; Berkshire holds a 9.5% stake in Activision Blizzard. After seeing the Microsoft acquisition offer this year, he decided to significantly increase his holdings.
What would Berkshire’s future be without Buffett? Buffett: As long as Berkshire retains a corporate culture that puts shareholders first, it will exist for a hundred years.
On the call for “impeaching” Buffett’s chairman, Munger: I don’t think it’s overwhelmed to be chairman and CEO concurrently. Some people have never run a business company and don’t know anything.
Buffett: Fed Chairman Powell is a hero, he did what he had to do, and it would have been worse without stimulus in 2020.
Buffett: Bitcoin is not productive, I would rather buy a $25 billion apartment or 1% stake in a farm than $25 in Bitcoin; Munger: Bitcoin is stupid, evil, and makes me look worse than everyone else.
Before the shareholders meeting, Berkshire announced a quarterly report for this year that was not as good as the market expected:
Berkshire Hathaway’s first-quarter net profit fell 53% from a year earlier, hurt by investment losses and weakness in its insurance underwriting business. EPS for the quarter was $3,702, down sharply from $7,638 a year ago and the consensus estimate of $4,490.
At the end of the first quarter, Berkshire’s cash pile stood at $106.3 billion, the lowest level since the third quarter of 2018. Compared with the book cash of US$144 billion at the end of the fourth quarter of last year, a decrease of 26% is related to the recent frequent investment .
The following is a live update of the Q&A session at Buffett’s shareholders meeting
15:25 About Independent Directors
Buffett: What you think of as independent directors is actually not that independent.
Shareholders asked whether future Berkshire CEO Abel could make tens of billions of dollars in acquisition decisions as quickly as in the Buffett era without the approval of the board.
Buffett acknowledged that his successor’s board may need to impose more discipline on the CEO than he did during his tenure. He then went on to discuss at length what people see as “independent directors” who cannot be considered true independent directors if their income depends entirely on the income of the company’s board of directors. The media mentioned that some shareholders want to replace Buffett’s chairmanship with an “independent chairman of the board.”
After answering this question, a five-and-a-half-hour question-and-answer session, divided into morning and afternoon sessions, ended. Berkshire’s truly shareholder-only annual meeting is about to begin, where shareholders will vote on whether to remove Buffett as Berkshire’s chairman and become CEO only. The shareholder motion is currently opposed by Berkshire’s board.
15:15 Share repurchase
Buffett discussed share buybacks again, saying that if they could choose between buying a business they like or buying back shares, Berkshire would choose the former. The important thing is to improve the situation for shareholders, he said. Buffett said we wouldn’t buy our own stock if we let it trade on Monday.
Buffett emphasized the value of stock buybacks, joking that if enough people sold, he would buy all of Berkshire’s stock. He stressed that shares should only be repurchased when the price is attractive.
15:10 Oil storage and production
Should the U.S. change its approach to oil storage and production, and what if there is no change in the next decade.
Munger believes a change should be made. He said, I hope to have a lot of oil reserves, I prefer to buy oil from the Middle East, and to retain the resources in the United States. In the next two hundred years, oil will be a very precious resource. He admits that’s not what most people think, adding, “I don’t care, I just think they’re all wrong.”
Buffett: The question is elastic. Different ethnic groups have different ideas, which is not a bad thing. The US federal government now has billions in storage. Now everyone thinks that it is a good thing that this country has so many oil reserves, but when you think about it, it is actually not enough. These reserves will be gone in three to five years, and you don’t know what will happen in three or five years.
15:05 Buffett’s advice to young people
Question: You knew early on that you wanted to be an investor. If you didn’t know what you wanted to do, do you have any advice?
Buffett: I want to be an investor, and that’s exactly what my dad does and loves it. I have enough books at home for me to read. It’s a coincidence. But I do think that finding what you really want to do and doing it for life, finding out what the world you want to live in, working for people you really respect, that’s what I did after graduation. I want the world of (“father of modern security analysis”) Benjamin Graham. Then he did hire me, and then I worked for myself, I just wanted to work for myself.
Munger: My advice is, find what you’re really not good at and avoid them. Even if you’re smart, you can’t do things well that you’re not interested in.
14:50 Bitcoin bashing again
The audience asked Buffett and Munger if they had changed their minds about Bitcoin and virtual currencies, you said it was a fraud in the past, but if it still has some use.
Buffett said, I will not buy bitcoin. For example, if he were to sell a 1 percent stake in all U.S. farms with a hypothetical $25 billion in assets, or a 1 percent stake in all U.S. condos, he would do it. And if he was going to sell all the bitcoins at $25, he wouldn’t buy it. Farms and apartments are productive, they have output, they have rent, but Bitcoin has nothing. Bitcoin is not a productive asset, its value depends on how much the next buyer is willing to pay the seller. Now there are many people participating in this gambling game, but these funds change hands between different people, but the owners are different, some of them win and some lose.
Buffett also said, why buy bitcoin, Berkshire can also produce its own currency. At the end of the day, there is no reason for the U.S. government to let another currency replace the dollar we now prefer.
“Throughout my life, I’ve tried to avoid something that’s stupid, evil, and makes me look worse than everyone else, and I think bitcoin has all three.” Call it stupid because its value will go to zero , say it is evil because it weakens the sound U.S. financial system. Also, countries like the US look stupid compared to countries that have already banned Bitcoin.
14:25 Acquired property and casualty reinsurance company Alleghany
Asked how he came up with the odd price of $848.02 per share when he decided to buy property and casualty reinsurance Alleghany Corp in late March, Buffett boasted that Alleghany paid Goldman Sachs consulting fees on its own. The previous purchase price per share was $850.
He then recalled how, in the late 1970s, two investment banks were persuaded to seek a “fairness opinion” on the pricing of a takeover deal by paying each investment bank as little as $60,000. He said that was also Munger’s advice to contact 10 investment banks and offer a low, possibly insultingly low price. Make the same offer to all 10 banks, and if there is no agreement to provide a fair opinion, go back to the first bank and make a slightly more offer.
The analysis pointed out that Buffett has said a lot about showing off how he avoided the high consulting fees of investment banks. He likes to use super low prices to “shop around” to get a fair opinion from investment banks on acquisition pricing, which just shows that he has been pursuing “cheap bargains and discounts”, even if it’s just acquisition-related consulting fees.
Asked what he thought of GAAP accounting standards, Buffett said that GAAP does not represent the actual value of a business, and it is difficult to develop accounting standards that apply to every company. GAAP as a practice is more like protecting auditors who would otherwise be sued.
14:10 The impact of inflation on Berkshire’s business. Comment on current inflation and 1980.
Buffett said people’s attitudes determine activity. The inflation we’ve seen this time around is extraordinary. Massive stimulus is a key reason why prices are rising now. “The government has sent people a lot of money, and at some point, that money can’t be worth as much as it used to be.” Given the amount of money pouring into the U.S. economy, Buffett said: “We’ve experienced a lot of inflation, and it’s almost impossible to have no currency. swell.”
He noted, however, that everyone would be worse off if the Fed didn’t stimulate the economy in the spring of 2020. He did not criticize the Fed’s actions to increase the money supply and stabilize markets during the coronavirus crisis.
Buffett said Fed Chairman Jerome Powell was a hero to him, it was simple, he did what he had to do. Munger said:
“It happened on a scale we’ve never seen before. They flooded the country with money for a while.”
Buffett noted that predictions about the demise of cash are premature, as the number of dollars in circulation has soared to more than $2 trillion in recent years, which equates to $7,000 per American.
13:55 Buffett on float
Regarding the float fund issue, Buffett said that our float fund is very appropriate, and our judgment is still OK at present, and it is doing better than other companies. Our favorite is float. When we invested in auto insurance company GEICO in the 1980s, we didn’t expect GEICO to do so well. This is a business opportunity. At the time, the place was right and no one on the board said it was bad. Berkshire’s lack of bureaucracy makes the company richer, and I’ve always enjoyed it. “When the opportunity comes, you can act.”
Buffett also said: “I see Berkshire as a painting. It has an infinite size, and it has an ever-expanding canvas on which I can paint as much as I want.” He admits that he does not understand art very well, but He also said that people see some things when they look at paintings now, and they will see more things in the future.
13:40 Buffett on Berkshire Energy’s ownership structure
Warren Buffett said of Berkshire Energy’s ownership structure that regulators in various U.S. local governments want private utilities to operate by borrowing heavily, rather than owning too much equity for fear of overcharging consumers. If Berkshire holds a 100% stake in energy subsidiaries in the future, it will still comply with government regulations on utility companies.
Buffett has long praised Berkshire Energy (BHE), calling it and railroad company Burlington Northern Santa Fe (BNSF) the “two bellwethers” in Berkshire’s sprawling non-insurance business. Shares in BHE are not publicly traded and are 91% owned by Berkshire.
Buffett’s friend Walter Scott, who died in September last year, once held an 8% stake in BHE, and his estate committee may sell more shares for cash or for Berkshire shares. Abel, the current Berkshire vice chairman and the first successor to the future CEO, also holds a 1% stake in BHE, worth about $500 million, and he may also exchange BHE shares for Berkshire shares. BHE said its 5.2 million U.S. customers are currently paying below-average electricity bills.
13:25 How to see the impact of passive index funds on corporate management
Question: Index funds have become a major trading tool in the market. Regarding the management and control of trading tools, how do you see the impact of passive index funds on corporate management?
Munger said the situation is now out of control, which is not good for the country. It’s not a good thing to have three people who manage the fund tell all the American businesses how to organize them. It won’t work if the impact of the indexation gets bigger. Buffett said that public opinion may not always solve a problem.
Buffett made it clear that he’s not the only stock picker at Berkshire. “I see some headlines from time to time saying that Buffett bought something, but it’s not me who bought this or that, it’s Berkshire who is buying it,” he said. Investors who asked the question said other Berkshire professionals may have picked stocks that Buffett had never heard of. But if the headlines say that Buffett bought this instead of Berkshire bought this, it will attract more readers, we don’t know if that will work, the headlines are meant to attract people to the news, Buffett said.
13:20 Buffett on investing in Activision Blizzard
Buffett wants to correct previous misinformation in the media because investing in Activision Blizzard was a personal decision he made months ago. He said that Berkshire’s current position in Activision Blizzard is about 9.5% of the latter’s outstanding shares, a large part of which he personally invested after seeing the news of Microsoft’s acquisition, because Microsoft announced in mid-January. The acquisition price of $95 per share is too far from Activision Blizzard’s stock price of more than $60 before the announcement, so it is worth investing in.
If more than 10% of the holdings red line needs to be reported to the SEC, they may hold more than this red line. Activision Blizzard closed Friday at $75.60, below the $95-a-share offer Microsoft announced in mid-January. Buffett pointed out that after Microsoft announced its acquisition of Activision Blizzard, the stock price rose from more than $60 to more than $80, and he also knew Microsoft had enough money to complete the acquisition. If the deal goes through, Berkshire will make a fortune.
SEC regulatory filings show that Berkshire spent about $1 billion on Activision Blizzard shares in the fourth quarter of last year, just before Microsoft announced plans to buy it. As of the end of 2021, Berkshire held 14.66 million shares of Activision Blizzard.
Buffett criticized the company’s fondness for issuing future earnings guidance. The problem with future earnings forecasts, he said, is that it incentivizes companies to play with GAAP rules to meet those specific numbers, and once you start lying, it’s hard to stop. If corporate cultures are accustomed to lying about these business metrics, they will only choose a successor CEO who is willing to cooperate.
Buffett stressed that this is not the case with Berkshire: “We make a lot of stupid decisions, but we never tell anyone the specific performance numbers we need to achieve, or completely change the entire decision-making process and lose coherence. Corporate culture trumps fixed processes.” Munger also said that Berkshire’s culture will last long after the two legendary investors have left, and it is very different from the culture of other American companies.
13:15 The best defense against inflation is to invest in your skills
Buffett: The tool to fight inflation is your own profitability. No one knows what inflation will look like in 10 or 20 years. But everyone is discussing.
Buffett called inflation “deceiving almost everyone.” Asked about his previous comments about inflation “deceiving” stock investors, Buffett said the damage from higher prices goes far beyond that.
“Inflation also fools bond investors. It fools people who hide cash under mattresses. It fools pretty much everyone.”
Inflation also increases the amount of capital a company needs to have, Buffett noted, and it’s not as simple as raising prices to maintain inflation-adjusted profits. Buffett cautioned against listening to those who claim to be able to predict the path of inflation.
“Everyone is talking about inflation. The question is how much … the answer is no one knows. No one knows what inflation will be in ten, twenty years.”
Buffett reiterated that the best protection against inflation is to invest in your skills.
13:00 How to balance the political orientation of the company CEO and the interests of shareholders
When asked how the political leanings of the company’s CEO balance the interests of shareholders, both Buffett and Munger said they would not say anything that would hurt the company’s image.
Buffett said that what I said and did should not override Berkshire, or I should resign. If I feel that my citizenship is more important than the impact of my words on Berkshire and its employees, I should resign.
11:40 What happens to Berkshire’s future after Buffett leaves?
Buffett insists that there is no reason to worry about where the company will go after he leaves, because Berkshire will forever retain a culture of putting shareholders first. He emphasized the importance of corporate culture, saying that you must understand that corporate culture accounts for 99% of the company. “If we had the same culture, we would still exist a hundred years from now.”
Buffett said it is unlikely that anyone will buy Berkshire for a long time to come. Even if I am gone, the corporate culture will not change much, nor will the shareholder relationship. Berkshire will not end. Berkshire’s path was taken step by step, not grandly planned from the start. We hope that everyone agrees, and we hope that everyone’s thinking is in sync. The shareholders are all Berkshire partners. If we want to revise the corporate culture, we must put compliance with the law first.
Buffett said, I hope everyone trusts me. Don’t ask about long and short positions and performance against the broader market. People give me money to help them invest because they trust me. We will obey the law, but not exactly like any other company.
Buffett recalls being inspired by a visit to the New York Stock Exchange when he was 9 years old. Started investing at the age of 11. He used to be interested in technical analysis and stock charts, invested a lot of time in them, and tried shorting to buy stocks to save money. Later, after reading a book, when he was 19 to 20 years old, his approach to investing changed completely. The book – widely believed to be The Intelligent Investor by Benjamin Graham. Buffett said: “I saw a passage in the book that told me that what I was doing was wrong. My whole way was wrong.”
Munger criticized Robinhood’s trading app, saying a good idea could easily be abused. Take a look at Robinhood’s journey from peak to trough. Obviously, isn’t that an instance? He said Robinhood had done nothing more than “short-term gambling, big commissions and hidden rebates” that were “despicable” and that they were now “disintegrating.”
After Munger criticized Robinhood, Buffett asked Munger: Is it totally unwise to criticize others? Munger replied, probably unwise, but I couldn’t help it.
11:25 Choose only one stock to fight high inflation, what would you choose?
The audience asked Buffett, if you were to pick just one stock to fight high inflation, what would you choose? Why?
Buffett said that the best thing you can do is to be exceptionally good at something. Financially or not, people will give you something they produce in exchange for something/skills you can provide, and one of the best investments is to invest in yourself. Do what you are good at and become a useful person to society, so you don’t have to worry about the devaluation of money due to high inflation. When you have your own retirement account and your financial manager tells you to put all your money in bitcoin, say “no,” Munger said.
11:10 What will happen to insurance companies’ business if there is a nuclear attack? Energy Business Responding to Cyber Attacks?
Buffett said the probability of a nuclear issue is very, very low. But also admit that there will be more accidents related to the atomic bomb – we have come close many times. There is nothing we can do about it, he said. Any sort of nuclear attack could hit Berkshire’s insurance business. While Berkshire does not cover risks associated with a possible nuclear war, such an attack could make it more expensive for Berkshire to underwrite other types of insurance. “For certain things, we’re not going to sell that kind of insurance because we can’t do those things well anyway. And everyone knows we can’t. So there’s this risk. There’s no way Berkshire can protect you.”
Ajit Jain, the company’s vice chairman in charge of the insurance business, said the impact of the nuclear crisis on the company could not be estimated. When it comes to nuclear issues, I kind of capitulate. It’s hard to estimate how bad this will be. Many different lines of business will be affected by it. Although the company now has many contracts that rule out nuclear issues, for example, if a nuclear war breaks out, how can the impact of the fire be ruled out? If something like that happens, I’m pretty sure the regulators and the courts will work against us. We will be asked to pay.
Greg Abel, vice-chairman of non-insurance operations, said working with the government on cyberattacks was going well and had done a lot. There are billions of attacks against Berkshire every day, especially against railroads and energy. It is a “critical priority” across the business.
10:50 Buffett responds to market timing questions
Question: Every time Berkshire makes a decision, it has seized the opportunity, and it has seized it well. How did you seize it so well?
Buffett said he never figured out how to time the market. He insisted that he would never speculate on the market’s timing and that “we don’t have the slightest idea of what’s going to happen in the stock market.”
“We don’t have the slightest idea of what the stock market will do when it opens on Monday. We never buy (stocks) based on how the stock market will go. We never have a deep economic view. We can’t pick without error. market timing.”
“I don’t think we ever decide, who of us is going to say where, or think we should buy or sell based on where the market is going, or where the economy is going. We don’t know.”
Buffett admitted that he missed the opportunity to buy stocks in March 2020, saying “I completely missed the market in March 2020.”
Buffett adheres to the strategy of value investing, and advises everyone not to spend time answering questions like how to outperform the S&P 500 this year.
“We’re not good at timing. What we’re good at is figuring out when to get enough money for us. We don’t know when to buy what, but we’ve been hoping that there’s going to be a period of downside (the market) so we might Buy more…I mean, it’s something you probably learned in fourth grade.”
Buffett mentioned how American baseball star Ted Williams’ gloves only make $20 to $25, saying that capitalism is special, special, and will deceive us in return. “If wealth has shown you something good, the second half of your life should be better than the first.”
Munger: Wealth management is ridiculous. Many wealth advisors are just people who claim to be actively investing but actually track stock indexes, and they are afraid of losing the management fees their clients pay.
Commenting on financial advisors trying to time the market, Buffett said, “If I had to choose between monkeys and Wall Streeters who play darts to pick stocks but don’t charge management fees, I’d always pick the monkey.
10:45 Munger slams calls to separate Berkshire’s chairman and CEO roles
Munger slammed calls to separate Berkshire’s chairman and CEO roles, saying, “It’s the most ridiculous criticism I’ve ever heard. It’s like when Odysseus came back from winning Troy, someone said I don’t like the way you win a battle with a spear. There are people who have never run any business and know nothing, and I don’t think being chairman and CEO is overwhelming.”
In April, CalPERS, the nation’s largest state public pension fund, disclosed that it intends to vote for a Berkshire Hathaway shareholder proposal to remove Buffett from the chairmanship but remain the company’s CEO.
10:40 Greg Abel responds to business challenges facing BNSF Rail and Geico Insurance
Greg Abel, vice chairman of non-insurance business, considered by the industry as Buffett’s “potential successor”, responded to the business challenges facing BNSF’s rail business. BNSF has a very good business and franchise branches, we do compete with other rail operators and know how they operate, but we ourselves started to focus on our customers, how to serve them better, we want to do it in an efficient way To serve customers and give back to shareholders. We will operate the railway company based on customer needs. There is still a lot to be done and improved on the basis of operation and customers. Since the management and employees of BNSF are very good, we will have long-term improvement. Even if the competitors are good, I will Will not jump ship.
Buffett: There’s no magic wand to revolutionize how the railroad business operates, but it gets better every day.
Ajit Jain, the vice chairman of the company in charge of the insurance business, answered how to deal with the competition in the insurance industry Ajit: There is no doubt that the insurance and reinsurance business is a very competitive market, and our Geigo and General Re are very competitive, of course Each has advantages and disadvantages. It’s true that Progressive has had better margins and growth rates than Geico lately, but Geico has also started using Telematics. Hopefully Geico will catch up with Progressive in telematics in the next year or two, and then in margins and growth rates to catch up with this strong competitor.
10:20 Berkshire’s previous purchases of companies outside the U.S.
Q: Berkshire has bought companies outside the U.S. before, and some of them may be fully acquired, such as companies that have invested in Germany. Do you wait for them to contact you, call you, or contact you?
Buffett said that we have taken the initiative to find companies before, and we did it 20 or 30 years ago. At that time, we bought three German securities, put together, we were willing to buy, but they felt that we were not moving fast enough. It’s hard for this to happen outside the US, because the circumstances are different. Relatively easy, at least stateside, not that we’re biased. In the US, some companies can be bought in ten minutes, as long as someone does the business. But in other countries, the situation is much more complicated, and some rules must be followed.
We want to spark your interest. I don’t need someone to email me to suggest that we buy, like the insurance company Alleghany, which I’ve been following for sixty years. Many years ago we invested in a German company that was well run and run with integrity. I really like this kind of company I bought in Germany. But it’s hard to find this. Such a company must be of sufficient size. We may be more inclined to take the company’s initiative to embrace it. If we receive a call tomorrow, we will see the situation and we may make a deal. It may be a company in Germany, France, or Japan. It is possible to spend 10 billion or tens of billions. We have invested in the stocks of the top five publicly listed companies in Japan, but we have said that we will not buy too many shares in them, and now hold a total of 5.85% of their positions.
Buffett pointed out that many of the criticisms of stock buybacks are misleading, and that buybacks are actually a good thing for investors in a company. He gave the example of American Express. Berkshire has owned American Express for more than two decades, and its stake has grown from about 11% to 20% because of the American Express buyback. In 1998, we had about 150 million shares of American Express, we owned 11.2% of the company in 1998, they gave us quarterly dividends, and now we own 22%. They repurchased stock, and in doing so brought our ownership to 20%. Buybacks are great for investors. As long as the price is right, the company’s buybacks and self-investment are good things.
Buffett said that our interest in Apple is also due to the continuous growth of buybacks. Apple earns hundreds of billions of dollars every year. As long as our dividend increases by 0.01%, it will also have great benefits. For example, in the first quarter of this year, our holdings in Apple also grew. We also want to have more equity and we are interested in them.
9:55 Buffett explains property and casualty reinsurance Alleghany and Occidental investments
Berkshire Hathaway will buy property and casualty reinsurer Alleghany Corp for $11.6 billion on March 21. Buffett explains what happened: On February 25, I got a short email from a friend who worked for Berkshire many years ago, saying he became CEO of Alleghany Corp. I’ve been following this company for 60 years, and I said I’d come to New York on March 7th, let’s meet, and we made a deal. I didn’t call the investment bank, I knew I would buy this company at the price I proposed, but I wouldn’t buy it without this email.
Buffett said that he also thought that Occidental Petroleum’s annual report was very good, so he decided to invest in it. When talking about the huge investment in Occidental Petroleum in early March, Buffett said that in the first two weeks of March, he acquired 14% of the latter’s outstanding shares, worth more than $7 billion. Originally, only 60% of Occidental’s shares were tradable. . He said short-term volatility in the market due to a “gambling mentality” since late February has allowed him to find good long-term opportunities. Munger also said that he has finally found an investment that is more worthwhile than U.S. Treasuries.
Munger commented that the current stock market is “almost a speculative frenzy”, and he mentioned high-frequency algorithmic trading and the increasing openness to new investors during the epidemic: “The computers that use algorithmic trading are fighting each other. This is an extraordinarily crazy period. There are traders who know nothing about the stock market and get advice from brokers who don’t know more about stocks, and it’s strange that there’s this system in which the stock market has this casino nature, and that’s not what any country wants.”
9:50 Buffett mentions the economic crisis
Buffett said that if a similar crisis recurs, Berkshire, which holds a lot of cash, can be like the Fed that rescued the market. In the 1980s, then-Fed Chairman Volcker told me that the Fed can do whatever we need to do. It was like this in 2008 and 2020, and it will repeat itself in the future, when you want Berkshire to be there to operate like the Fed, which can happen forever if the economy doesn’t work.
9:30 Buffett talks about the first quarter earnings report, emphasizing the importance of holding cash
Buffett said that at the shareholders meeting two years ago, we didn’t know what was going to happen to the epidemic, we didn’t know what was going to happen to the economy. By 2022, Berkshire Hathaway has $7 billion in operating income.
Buffett said, a lot of things will change, but one thing remains the same, we will always have a lot of cash, not commercial paper, we don’t have money market funds, we believe we should have a lot of cash.
Buffett warns shareholders of “new forms of money” when recalling the 2008 financial crisis. The analysis said that although Buffett did not directly criticize Bitcoin or cryptocurrencies, he had previously said that Bitcoin was rat poison and had no unique value, and Munger also dismissed such cryptocurrencies.
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