Buffett shrugged off an interviewer’s compliments about how well he tuned in to the stock market. Buffett said he never knows what stocks or the economy will do in the short term.
“We haven’t timed anything at all,” Buffett said, adding that the success of the company’s long-term “buy and hold” investment strategy is “simple.”
Charlie Munger, vice chairman of Buffett and Berkshire, lamented how speculators seem to have taken control of Wall Street. Munger described the casino-like atmosphere and Buffett described the market as a “gambling hall.”
Concerns about inflation but praise for Powell
Buffett did not elaborate on this year’s market volatility during the meeting. But he said inflation is a big problem, one that “fools almost everyone”.
He has given Federal Reserve Chairman Jerome Powell much plaudits for his actions to fight the economic crisis caused by Covid-19, although some argue that low Fed rates have helped fuel inflation pressures.
Buffett said Powell was a “hero” for being aggressive and cutting rates quickly at the start of the pandemic rather than sitting aside and “thumb sucking.”
Buffett also hinted that Berkshire could benefit from the selloff, saying the company is “dependent” on market behavior creating mispricing opportunities for the company.
Activision’s share price is lower than the proposed acquisition price. Buffett said he made the decision to buy more shares as an “arbitrage” bet that the deal would eventually go through.
The moves come just a few weeks after Buffett wrote in his annual letter to shareholders that he was having trouble finding shares to buy at attractive prices. But after the frenzy of buying Berkshire, its cash on hand fell from about $147 billion at the end of 2021 to about $106 billion at the end of the first quarter.
Why does the heart change? Munger, in his egregious manner, said that he and Buffett “found some things we’d rather have than Treasuries.”