On April 30, local time in the United States, the annual Berkshire stockholders meeting will be held once more. This is a major event in the American investment community, because Berkshire chairman, stock god Buffett and his partner Munger will appear to discuss investment directions. This time Buffett and Munger had nearly five hours of Q&A.
Buffett, who has previously said inflation “deceives” stock investors, pointed out at Saturday’s shareholder meeting that it also “deceives” bond investors.
“It deceives people who hide cash under mattresses. It defrauds pretty much everyone,” Buffett said. What he means is that inflation is so strong that if you hide cash and don’t invest it, it will keep depreciating.
That day, Buffett and his longtime partner, Vice Chairman Munger, answered hours-long questions from shareholders on a series of questions.
With the emergence of “new forms of money” such as Bitcoin, Buffett also emphasized the importance of real money.
Showing an image of an old $20 bill, Buffett said: “The U.S. government has confirmed that this bill can be exchanged for legal currency anywhere in the United States. That’s what money is regarding.”
Buffett (left) is interviewed by American TV.
Buffett said he wouldn’t buy bitcoin because it doesn’t generate anything, and even if bitcoin fell extremely low, he wouldn’t buy bitcoin because it wouldn’t generate any value.
“Whether the price of bitcoin will go up or down next year, whether it will live for 5 years or 10 years, I don’t know. But one thing I’m sure regarding is that it won’t produce any results.”
“It does have a kind of magic, but people feel magic regarding a lot of things,” Buffett said. Buffett lists farmland, apartment buildings and even art as more valuable assets than bitcoin.
“For an asset to have value, it has to give someone something. And only one currency is accepted. You can come up with all kinds of things. We can issue Berkshire coins and throw Berkshire money. , but at the end of the day, it has to be money.”
“There is no reason in the world for the U.S. government to agree to replace their money with money issued by Berkshire.” What he means is that the U.S. government will not allow any form of currency to replace the dollar.
Buffett poses with shareholders.
In response to a question regarding inflation, Buffett mentioned that the massive stimulus from the Fed (zero interest rates and quantified easing) during the COVID-19 pandemic is a key reason why prices are rising right now.
“The U.S. prints a lot of money, and the money becomes even less valuable,” Buffett said. However, he did not criticize the Fed’s actions to increase the money supply and stabilize markets during the coronavirus crisis.
“Fed Chair Jerome Powell is a hero in my book. It’s simple. He did what he had to do.”
Munger entered the venue.
On the other hand, in recent years, U.S. investors’ growing concerns regarding the Chinese market have affected the prices of some Chinese companies’ stocks, especially those of Internet companies. In this regard, Munger said that for a good investment, he is willing to take this risk.
“The reason I invest in China is that I can buy better companies at a much lower price,” he said.
“I’m willing to take more risks and get into better companies with lower prices. Others may come to the opposite conclusion because everyone is more worried regarding the Chinese market now than they were 50 years ago.”
“There is no doubt that the Chinese market worries investors from the United States, and she does have more difficulties,” Munger said. “China is different from the United States. They have maintained their loyalty in their own culture.”