America had an economy that was virtually shut down for the past six weeks. Also, 30 million Americans – and counting – losing their jobs. Additionally, there is a record plunge in our nation’s gross domestic product last quarter. But despite all this, Warren Buffett isn’t counting America out.
He believes that our country will emerge from the coronavirus pandemic stronger than ever.
“Nothing can basically stop America,” said Buffett, chairman and CEO of Berkshire Hathaway, during the recent shareholder’s meeting in Omaha, Nebraska.
“This country, in 231 years, has exceeded anybody’s dreams,” Buffett said.
“The American miracle, the American magic has always prevailed and it will do so again. In World War II, I was convinced of this. I was convinced of this during the Cuban Missile Crisis, 9/11, the financial crisis.” he added.
A Slightly Hopeful Outlook
Buffett says it’s unknown how quickly the country will recover from the economic shutdown. Nevertheless, he believes the reason for the shutdown will make this recovery easy. He even says that it will be easier than the one the country faced after the Great Recession over a decade ago.
“In 2008 and 2009 our economic train went off the tracks, and there were some reasons why the roadbed was weak in terms of the banks,” Buffett said. “This time we just pulled the train of the tracks and put it on a siding. And I don’t really know of any parallel — in terms of a very, very well the most important country in the world, most productive, huge population — in effect sidelining its economy and its workforce.”
It’s why Buffett is long-term bullish not only on our economy but our country as a whole.
“If you had to pick one time to be born and one place to be born … you would not pick 1720; you would not pick 1820; you would not pick 1920,” Buffett said. “You’d pick today and you would pick America. Ever since America was organized… people have wanted to come here.”
“I know America is going to move forward over time,” he said. “But, I don’t know for sure — and we learned this on September 10th, 2001, and we learned this a few months ago in terms of the virus — anything can happen in terms of markets”
Buffett Cautions Against Blind Optimism
He does caution to not make investment decisions on blind optimism. “You can bet on America, but you kinda have to be careful about how you bet,” he added. “Simply because markets can do anything.”
When pressed for where he believes people should invest their money, he offered a very different answer than many would expect. He said people should invest on his conglomerate, Berkshire Hathaway.
“In my view, for most people, the best thing is to do is owning the S&P 500 index fund. There are huge amounts of money people pay for advice they really don’t need. If you bet on America and sustain that position for decades, you’d do far better than buying treasury securities.”
“When I bought my first stock when I was eleven, I caught a huge, huge, huge tailwind in America. But, it wasn’t going to blow in my direction every single day, and you don’t know what’s going to happen tomorrow.”
“I know America’s going to move forward after time,” he said.