Since hardly anyone reads below the headline anymore, the recent one in the Financial Times—“Warren Buffett’s Berkshire Dumps Billions of Dollars of US Stocks”—is leading many people to think Buffett, the Oracle of Omaha whose favorite holding period is “forever,” has turned bearish. Rubbish.
In the past quarter, Buffett sold $13.3 billion worth of stock and bought $2.9 billion for a net sale of roughly $10 billion. Berkshire has $3 billion shy of a trillion dollars in assets. So if he sold $10 billion, that’s equivalent to selling 1% of Berkshire’s portfolio. Calling someone bearish because they sold “billions” might apply to mere mortals, but not Buffett. That would be like saying a shark has turned vegan because it spit out a fish bone.
Did Buffett make it clear he sees that the underlying Berkshire businesses are slowing? Yes. Did he signal that he sees a possible recession? Yes. Did he try to talk down people’s expectations for future returns? Yes. Does he see some value in Treasury Bills finally earning 5%? Yes. But bearish? Not quite.
If people actually watched the Berkshire Hathaway meeting this past weekend, they would’ve gleaned that Buffett remains very optimistic about the prospects of America and the stocks within it. As Buffett pointed out, the basic rules of investing have always stayed the same.
As usual, Buffett bemoaned the short-term nature of people’s thought patterns but explained it’s what keeps him in business: “What gives you opportunities is other people doing dumb things.”
Buffett admitted that our country is far from perfect and that it faces extraordinary problems. He called attention to the increasingly tribalistic nature of American politics. In classic Buffett style, the 92-year-old said that he’d like to be born today, in the US, all over again, with not too much money and “hopefully turn it into a lot of money.”
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