The Most Bearish Buffett Can Be
The Berkshire Hathaway meetings are pretty dull these days. Warren faces the same questions – where’s the economy going, why isn’t he investing more, and he offers the same answers – don’t speculate, think long-term. This one was different!
The markets tuned into a virtual press conference from Omaha, Nebraska, to hang on his every word. These are unprecedented times, and everyone wants to know the Oracle’s take. He’s participated in every trading session since 1941, and his record speaks for itself.
He started by explaining why he wasn’t investing at these lows. “The Federal Reserve acted quickly and aggressively, fleeting any opportunity” to get a deal done. He also can’t predict the future. He admitted he didn’t know what businesses will look like coming out of this lockdown, and therefore he isn’t buying. Actually, he was a net seller!
He sold his entire airline stock, emblematic of how he has dipped in and out of the industry for decades with varied success. He joked a few years ago that if he ever thought of purchasing an airline stock, he’d call an ‘aeroholics’ hotline and have the people on the other side talk him down!
It was an unsettling meeting, leaving the bulls wanting. He reinforced his optimistic belief in America to fill an awkward silence at the end, but reading between the lines, this wasn’t the short-term gee-up markets need for Monday’s session.
The Berkshire meetings are best when they’re boring. Buffett invests such large sums of money that his deals are cut off-market, so while he concerns himself with only the most giant conglomerates that will move his needle, he’s reluctant to give broader market views because he doesn’t believe in speculation.
He also knows his words carry weight, but he didn’t mince ‘em this time. If you could ask the Oracle one thing, what would it be?