Warren Buffett And Charlie Munger Talk Economy, Markets At Berkshire Hathaway Annual Meeting

Warren Buffett, Rich, Money, Billionaire, Cash, Wealth

Warren Buffett and his longtime business partner Charlie Munger have been addressing investors worldwide at the Berkshire Hathaway Inc (NYSE: BRK-A)(NYSE: BRK-B) 2021 shareholders meeting, being livestreamed by Yahoo Finance.

Here are some highlights.

The Long View

Buffett kicked things off with some looking back at how the market has changed over the past 30 years. He held up slides showing the largest 20 companies by market capitalization now and in 1989, noting that all company names are different. Buffett's point was on the intransient nature of business and how that makes it hard to pick stocks. 

"Look at the top 20 [companies] from 1989," Buffett said. "There's two things that should grab your interest: None of the 20 from 30 years ago are on the present list — zero. There were then 6 U.S. companies on the list; none made it to the list 30 years later."

But given how much bigger the market cap numbers are between then and now, there's also a "great argument for index funds" in there, he said, noting that a lot of inflation has not marked this long period.

"The main thing is to be aboard a ship," Buffett said. "Overall, equities were absolutely the place to be."

Unexpected Effectiveness Of Pandemic Policy

Buffett and Munger were pressed to explain why Berkshire didn't buy more stocks at the market's low point last year. Buffett said it was hard to predict how effective the Federal Reserve and U.S. government's monetary and fiscal policies would be in light of how such policies undershot the 2008-2009 recession.

"The economy went off a cliff in March, and it was resurrected in an extraordinarily effective way by Federal Reserve actions and later on the fiscal front by Congress," Buffett said. "Our businesses have done quite well. This has been a very, very, very unusual recession." 

Buffett went on to say of the Fed and government response: "I didn't think it was a sure thing it would get done. It worked better than just about anybody's expected."

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