As Warren Buffett answered a series of questions at Berkshire Hathaway's annual meeting on Saturday, billionaire Warren Buffett cautioned people not to believe investing is a simple way to make a fortune. Long-term champions, according to Buffett, can be difficult to identify. He pointed out that there were over 2,000 automobile companies in 1903, and almost all of them collapsed, despite the fact that automobiles have changed the world since then. "There's a lot more to choosing stocks than predicting what will be an incredible industry in the future," Buffett, who is recognized for his incredibly good investment record, said. "What I want to say is that it's not as easy as it seems."
Buffett has stated that most investors would do well, if they invest in an S& P 500 index fund rather than individual stocks. Many of the new entrants who have recently leapt into the market and driven up the value of video game store GameStop are, he claims, simply gambling. Stock trading sites like Robinhood, which encourage users to buy and sell stocks for free, according to Buffett, are just promoting this kind of gambling.
Buffett, along with vice chairmen Charlie Munger, Greg Abel, and Ajit Jain, spent several hours answering questions at an online edition of Berkshire's annual meeting on Saturday afternoon. According to Buffett, the Federal Reserve's programmes and the spending packages approved by Congress have done a fantastic job of bolstering the economy and keeping interest rates stable. He said the government obviously learnt from the Great Recession in 2009, and responded swiftly to the pandemic, but it's difficult to forecast the long-term effects of such policies.
Buffett said he doesn't regret selling Berkshire's $6 billion interest in all major airlines last year, despite the fact that the stocks have appreciated dramatically since he sold them in the spring. Buffett still believes that if the airlines had had "a very wealthy large shareholder like us," they would not have been able to secure as much federal assistance as they did after the pandemic.
Berkshire Hathaway, headquartered in Omaha, Nebraska, has $145.4 billion in cash and short-term deposits due to Buffett's inability to find large acquisitions for the firm for many years. Cole Smead, an investor, said he'd like to see the firm becoming more active the next time the price falls. "We have no doubts about Buffett and Munger's patience. That is self-evident. The concern is whether or not they are aggressive. That isn't clear, is it? "Smead said.
Buffett has said that he wishes to spend some of Berkshire's assets, but that the current competition from private equity and other investment funds has made finding fairly priced acquisitions challenging. And, according to the 90-year-old, it was difficult to foresee how the economy would respond to the pandemic and all of the government stimulus a year ago.
Because of the coronavirus pandemic, the annual conference was held online for the second year in a row. For the first time, the celebration was held outside of Omaha, in Los Angeles, to be closer to the 97-year-old Munger's home. 40,000 people normally attend the convention, which fills an 18,300-seat arena and every surrounding overflow space. There is no other business that can compete with such crowds. The conference isn't just for shareholders to enjoy. Jim Weber, the CEO of Berkshire's Brooks Running, said he longs for the opportunity to exchange notes with other Berkshire executives at the lone annual gathering of the fragmented conglomerate's thousands of subsidiaries. "The chance to interact with our colleagues is definitely missed," Weber said.