Highly Uncertain Over The Next 6-12 Months: Warren Buffett Shares Latest Views On The Markets

[Sergey Golubev]

Warren Buffett Shares Latest Views On The Markets At Shareholder Meeting

At Berkshire Hathaway BRK.B ’s annual shareholder meeting, Warren Buffett shared his views on the markets. Despite recent events, his overall message was broadly consistent with past years. He emphasized disciplined, long-term investing over decades rather than any short-term market for the next day, month or year.

Buffett continued to stress his belief in betting on America for the long term. However, he pulled back from making any short-time market call. He remains very bullish on the U.S. on a 20-year view. He believes the range of outcomes for the pandemic were extraordinarily broad. Now the range of outcomes has narrowed somewhat, but remain highly uncertain over the next 6-12 months with the possibility for follow-on impacts or the virus returning after the summer months. Still, he didn’t want to make an explicit call on the virus itself, joking that he did ok in accounting but was a disaster in biology.

As such Buffett stressed that over the long-term America can be expected to prevail. That said over the over the short-term he wanted to make it clear that the markets can do anything. He gave examples of times during history when the the stock exchange temporarily closed, and in 1987 when the markets fell over 22% in a day. He also reminded people that those who invested in the U.S. in 1929, around the time he was born, had to wait until the 1950s to get back to even.

He also stressed his belief that most people will do fine with low-cost index funds, rather than more sophisticated strategies. He also believes that investing with borrowed money or on margin is potentially dangerous. These themes are consistent with past years, though it is also very clear Buffett is trying to avoid any short-term bullish pronouncements.

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