Nomad Posted May 3, 2020 Share Posted May 3, 2020 I just finished watching the Berkshire AGM livestream. My overall takeaway is that Buffett is very cautious, if not outright bearish, on the near-term prospects of the stock market. Some highlights below (mistakes and omissions are my own): WEB sees the US currently at "DEFCON 5" on the health impact of the coronavirus but only at "DEFCON 1" on the economic and market impact - seemed surprised by the disconnect Range of possible outcomes on the economic side is still "extraordinarily wide" Pointed out that the Dow fell from 381.17 on 1929-09-03 to 198.69 on 1929-11-13, but rose to 240.42 by 1930-08-29 - it was "not apparent" by the summer of 1930 that the US would enter the Great Depression Mentioned the lasting psychological impact of the Great Depression - two lost decades in stocks before the market went back to even in nominal terms WEB: "You can bet on America, but you have to be careful in how you bet." You will do fine if you buy an index and hold for "20 to 30 years" $6b in Berkshire net equity sales in April, all airline positions liquidated On overcapacity in airline industry - there are "too many planes" Unlike 2008, Berkshire has not acted as a lender of last resort because WEB "hasn't seen anything attractive" WEB: Companies were able to get money from the Fed in 2020 "on terms we wouldn't have given them" Sees possible permanent impairment in commercial real estate due to work from home programs Believes there could be "extreme consequences" from abnormally low or negative interest rates Did not buy back Berkshire stock because he did not see BRK at a discount to intrinsic value Overall, some very interesting comments by Buffett and Greg Abel about the challenges currently facing the country and Berkshire's operating businesses as the pandemic persists. Link to comment Share on other sites More sharing options...
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