Buffett says Berkshire’s success depends more on being ‘reasonable’ than ‘smart’

Buffett just said that Berkshire Hathaway (BRKB) The strategy is to make rational decisions and make long-term investments.
“It’s not because we’re smart. It’s because we’re sane,” Buffett said during the meeting. Berkshire (BRKA) investors.

Buffett shrugged off a compliment from one of his interlocutors about how good he is about the stock market. Buffett said he never knows what stocks or the economy will do in the short term.

He also joked that his bullish bets in the market often look bad at first, saying that he spent most of his net worth in 2008 during the Great Recession buying stocks at a “terrible time… a really stupid time.” Berkshire has invested in Goldman Sachs (GS) and General Electric (General Electric)among other blue chips, before the market finally bottomed out in March 2009.

“We never calculated anything,” Buffett said, adding that the success of the company’s long-term buy-and-hold investment strategy is “simple.”

Both Buffett and Berkshire Vice Chairman Charlie Munger have lamented that speculators seem to have taken over Wall Street. Munger described the atmosphere of a casino, while Buffett called the market a “gaming room”.

Anxiety about inflation, but praise for Powell

Buffett didn’t speak at length during the meeting about market volatility this year. But he said that inflation is a big problem that “deceives almost everyone.”

And he gave Federal Reserve Chairman Jerome Powell a big round of applause for his handling of the economic crisis caused by Covid-19, although some argue that the Fed’s low rates have helped fuel inflationary pressures.

Buffett said Powell was a “hero” for being aggressive and cutting rates quickly at the start of the pandemic instead of sitting back and “sucking his thumb.”

Buffett also hinted that Berkshire could take advantage of the selloff, saying the firm is “depending on” market behavior, creating opportunities for a mispriced company.

In the same vein, Berkshire has taken some aggressive steps lately. The company announced the purchase of an insurance company for $11.6 billion. Allegany (D) in March, and also recently disclosed large stakes in the oil company Occidental Petroleum (OKSI) and tech giant HP (HPQ).
Berkshire said in its earnings report on Saturday that it had increased its stake in Chevron (CVX). The oil giant is currently Berkshire’s fourth-largest shareholder, second only to Apple (AAPL), Bank of America (TANK) and american express (AXP).
Buffett also told the annual meeting that Berkshire Hathaway had increased its stake in the video game maker. Activision Blizzard (ATVI). Berkshire first invested in Activision at the end of 2021, before Microsoft (ISFT) announced in January plans to buy the company for nearly $70 billion.

Activision’s share price is below the proposed takeover price. Buffett said he made the decision to buy more shares as an “arbitrage” bet that the deal would eventually go through.

The moves come just weeks after Buffett wrote in his annual letter to shareholders that he was having a hard time finding shares to buy at attractive prices. But after a Berkshire buying spree, its cash has fallen from about $147 billion at the end of 2021 to about $106 billion at the end of the first quarter.

Why does the heart change? Munger, in his typically blunt manner, said that he and Buffett “found some things we’d rather own Treasury bills.”

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