Despite the recent market volatility and worries over the economy, Berkshire Hathaway CEO Warren Buffett on Saturday provided a calm and steady voice as he fielded questions from shareholders.
That’s not to say that Buffett doesn’t see some turbulence ahead. He said commercial real estate could struggle with higher borrowing rates and banks could face more pressure but noted that deposits were safe. As for the economy, Buffett noted that his businesses will see lower year-over-year earnings as economic activity slows down.
The Oracle of Omaha also said Berkshire Hathaway wouldn’t take over Occidental Petroleum. “There’s speculation about us buying control, we’re not going to buy control. … We wouldn’t know what to do with it,” he said.
The legendary investor sounded more optimistic about the prospects of value investing, however.
“In the 58 years we’ve been running Berkshire, I would say there’s been a great increase in the number people doing dumb things, and they do big dumb things,” he said, meaning that there will be more opportunities to make money down the road.
Buffett also doesn’t expect the U.S. dollar to be dethroned as the world’s reserve currency anytime soon. “We are the reserve currency, I see no option for any other currency to be the reserve currency,” he said.
The 99-year-old Charlie Munger, Buffett’s right-hand man, also commented on artificial intelligence. He said that, while “going to see a lot more robotics in the world,” he remains “skeptical of some of the hype in AI.”
People behave very differently when inflation genie gets out of the bottle
“Nobody knows how far you can go with a paper currency before it gets out of control, particularly if you’re the world’s reserve currency. And you don’t want to try and pick out the point where it does become a problem because then it’s all over,” Buffett said. “I think we should be very careful,” When the inflation genie “gets out of the bottle,” he added.
Warren Buffett speaks on commercial real estate market
Commercial real estate market value mainly depends on how much you can borrow non-recourse, and it’s starting to see the consequences of that. “It all has consequences,” “We are starting to see the consequences of people who could borrow at 2.5% and find out it doesn’t work at current rates, and they hand it back to somebody that gave them all the money they needed to build it.” he added.
“I don’t think AI is going to tell you what stocks to buy”
Warren Buffett earlier today said that while AI can help screen for stocks that fall under certain parameters, it has its limitations beyond that. “I don’t think it’s going to tell you what stocks to buy. It can tell me every stock that meets a certain criteria, or criteria in three seconds. But it has decided limitations in some ways. You ought to see the jokes it came up with.”
Warren Buffett’s Berkshire Hathaway sold billions of dollars worth of stock and invested a tiny amount in the US equity market in the first three months of the year, as the famed investor saw little appeal in a volatile market. Berkshire disclosed on Saturday that it had sold shares worth $13.3bn in the first quarter and bought stocks worth just a fraction of that figure.