Buffett denied compliments from a questioner about how well he judged the stock market. Buffett says he never really knows what stocks or the economy will do in the short term.
“We’ve never timed anything,” said Buffett, adding that the success of a company’s long-term “buy and hold” investment strategy has been “simple.”
Both Buffett and Berkshire Vice Chairman Charlie Munger lament how speculators seem to have taken over Wall Street. Munger describes the atmosphere as casino-like, and Buffett calls the market a “gambling parlor.”
Worried about inflation but praises Powell
Buffett didn’t say much at the meeting about this year’s market volatility. But he did say that inflation is a big deal, one that “deludes most people.”
And he has heaped praise on Federal Reserve Chairman Jerome Powell for his actions to combat the economic crisis caused by Covid-19, despite what some say is low interest rates. The Fed has helped fuel inflationary pressures.
Buffett said Powell was a “hero” for being aggressive and quickly cutting rates at the start of the pandemic instead of sitting still and “thumb sucking”.
Buffett also hinted that Berkshire could take advantage of the sell-off, saying the company “depends” on market behavior that creates mispriced opportunities for the company.
Activision’s stock price is below the proposed takeover 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 weeks after Buffett wrote in his annual shareholder letter that he was having trouble finding shares at attractive prices. But after buying Berkshire, their cash flow fell from about $147 billion at the end of 2021 to about $106 billion at the end of the first quarter.
Why change of heart? Munger, with his often blunt style, said that he and Buffett “found some things we’d rather own than Treasury bills.”
