Buffett brushed aside compliments from one questioner about how he timed the stock market so well. Buffett said he never really knows what stocks or the economy will do in the short term.
“We never timed anything,” Buffett said, adding that the success of the company’s long-term “buy and hold” investment strategy is “easy.”
Both Buffett and Berkshire vice chairman Charlie Munger lamented how speculators have seemingly taken over Wall Street. Munger described the casino-like atmosphere and Buffett called the market a “gambling parlor.”
Inflation worries but praise for Powell
Buffett did not discuss this year’s market volatility at length during the meeting. But he did say that inflation is a big problem, one that “almost everyone lights up.”
And he praised Federal Reserve chairman Jerome Powell for his actions to combat the Covid-19-induced economic crisis, although some argue that the Fed’s low interest rates have fueled inflationary pressures.
Buffett said Powell was a “hero” because he was aggressive and quickly cut rates at the start of the pandemic instead of watching and “thumb sucking”.
Buffett also hinted that Berkshire could benefit from sell-offs, saying the company “depends” on market behavior that creates mispriced opportunities for the company.
Activision’s share price is below the proposed purchase price. Buffett said he made the decision to buy more of the stock as an “arbitrage” bet that the deal will eventually come through.
These moves come just weeks after Buffett wrote in his annual shareholder letter that he was struggling to find stocks to buy at attractive prices. But following Berkshire’s shopping spree, available cash has fallen from about $147 billion at the end of 2021 to about $106 billion at the end of the first quarter.
Why the change of heart? Munger said in his typically blunt manner that he and Buffett “found some things we liked more than Treasury bills.”