Everyone is feeling very anxious except him


Everyone is feeling very anxious except him
Everyone is feeling very anxious except him

Everyone is feeling very anxious except him

What is Warren Buffett's advice during a market downturn?

The S&P 500 and the Dow Jones Industrial Average have both gone down for three weeks in a row. This has caused more volatility in the market, leading to an increase in demand for put options as people look to protect their investments from potential losses. 

Last year, the economy was doing well, but inflation is rising quickly and it looks like the Federal Reserve will have to take steps to lower it. This could be bad for stocks, similar to how the economy suffered in 2022.

Even though Berkshire Hathaway reported an operating loss in the fourth quarter and its book value decreased last year for only the fourth time in its 58-year history, legendary investor Warren Buffett remains unconcerned.

An extremely positive outlook.

In his letter to shareholders, Buffett expressed his optimism about the stock market for the long term. He encouraged everyone to "bet on stocks" despite their tendency to be overly self-critical.

John Maynard Keynes famously said that the long run is a misleading guide to current affairs, noting that "In the long run we shall all be dead" in 1923. This is in stark contrast to what he said.

Warren Buffett remains the best mentor here, recognizing that while stocks may go down occasionally, they usually go up.

Since 1965, the combined annual return of the S&P 500 has been 9.9%, while Berkshire Hathaway stock has seen a 19.8% return over the same period. This is outlined in Warren Buffett's letter on the first page.

It's better to look at the long term.

In his annual letter to shareholders on Saturday, Warren Buffett, CEO of Berkshire Hathaway, showed optimism despite the decline in stock and bond prices. He expressed confidence in the US economy and said, "I still see this as a good time to bet on America for the long term.

Stock buyback

In his annual letter, Warren Buffett, a billionaire, argued that buying back shares of Berkshire Hathaway is beneficial to all shareholders.

Buffett, 92, said on Saturday that when people are told that buybacks are harmful to shareholders or the country, or particularly beneficial to CEOs, they should be aware that either an economically illiterate person or a silver-tongued demagogue is likely exaggerating risks in order to spread fear and create a divide between the public and wealthy elite.

Berkshire began buying back its own shares in 2011 and the activity has accelerated in recent years, with a record $27 billion spent on buybacks in 2021. This is due to Buffett's lack of interest in foreign acquisitions, as stock prices have risen substantially.

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