Warren Buffett Hunts From Home
Warren Buffett is a very traditional investor. He likes a bell to ring when a customer walks through the door, and he likes to look you into the whites of your eyes as he shakes on a billion-dollar deal.
Neither of those things can happen during coronavirus, so the Oracle of Omaha is taking a blow to his net worth. Luckily, this is a market legend who has compounded value for longer than most of us have even lived, so when the Sage speaks, markets listen!
He’s kept quiet so far in the downturn, not giving any interviews or public statements. It’s hard to know what he’s up to. It could just be his reluctance to bother with modern technological wizardries like Zoom, it might that he’s busy snapping up bargains, or it might be that he doesn’t want to tell us what he really thinks of 2020… 2021, 2022, 2023…
In the Financial Crisis of 2008, Warren Buffett jumped on the phone to Fox Business. He said the Federal Reserve needed to drop interest rates, or the entire economy would collapse. Fed Chair Ben Bernanke did as he was told. This time, the stimulus is there, but thousands of businesses are still short on cash. Buffett’s probably the one with the missed calls.
His Superinvesting partner, Charlie Munger, has been more vocal. He told the Wall Street Journal that “some businesses that Berkshire was bag holding (okay, he didn’t say bag holding!), small ones, won’t reopen when this is over.” It’s a cold dose of reality, and it might explain why there have been some Berkshire defectors recently.
The public has lost faith in Buffett to deploy over 100-billion-dollars of cash into a new generation of stock picks. There haven’t been any elephant acquisitions of late, nor share repurchases. It’s just been hoarding and talk of safety nets. That’s why if Warren Buffett has finally been hunting from home, Berkshire Hathaway could be cheap by any metric!