On the Berkshire Hathaway (BRK-A, BRK-B) annual shareholders meeting on Saturday, Buffett started the proceedings by providing a roughly 75-minute overview of why American historical past provides causes for investor optimism.
This can be an acquainted theme for Buffett. Within the final a number of years he has written and spoken extensively in regards to the “American tailwind” that traders can trip by investing within the inventory market. And whereas Buffett reiterated this long-term optimism on Saturday, there was a delicate change in his message.
And traders ought to take notice. “I don’t know, and maybe with a bias, I don’t imagine anyone is aware of what the market goes to do tomorrow, subsequent week, next month, next year,” Buffett said Saturday. “You may guess on America; however, it’s important to watch out about the way you guess. Just because markets can do something… No one is aware of what’s going to happen tomorrow.”
On the surface, this feedback seems benign. “Warren Buffett says traders ought to assume lengthy-time period” isn’t a lot of a headline. However, Buffett’s define isn’t that buyers ought to assume a long-time period proper now, however, that they should assume a lengthy-time period. In different phrases, there aren’t many causes Buffett can discover to see the present state of affairs as something, however difficult. And contemplating Buffett’s lengthy held bullish views, that is as bearish a take as we’re liable to ever hear from Buffett.
And Buffett’s current actions communicate louder than any of the phrases uttered throughout Saturday’s assembly. The most important headline was Buffett’s confirmation that Berkshire sold its entire stake within the nation’s four largest airways — American (AAL), United (UAL), Delta (DAL), and Southwest (LUV). As Buffett outlined on Saturday, in his view, the guess was easy: pay about $8 billion for these holdings to get about $1 billion earnings again.