Berkshire Hathaway chair Warren Buffett frequently shares his knowledge. In February, speaking with CNBC, he shared his thoughts on how the coronavirus could impact US markets. Buffett said that stock markets fell 2% the very first day he brought stocks in his childhood. He pointed to the various crisis the world has gone through since the 1940s when he first started to invest. According to Buffett, the pandemic does not change the long-term outlook for US companies.
Warren Buffett also added that market crashes can be an opportunity. He said, “if it gives you a chance to buy something that you like and you can buy it even cheaper then it’s-- you’re in good luck basically.”
Warren Buffett also added a note of caution on valuation. He said that “I would say buy stocks if you get enough for your money.” Now, here’s the catch. Warren Buffett does not value companies like the “Wall Street” does. Valuations were getting frothy for the legendary value investor and as a result, he wasn’t buying a lot of stocks over the last two years. Now whether Buffett went overboard buying stocks amid the crisis would be known only next month. We have two important events in May, the annual shareholder meeting and the first quarter 13F.
Warren Buffett has had very strong negative views on cryptocurrencies. He said, “cryptocurrencies basically have no value. And they don’t produce anything.” Buffett added, “I don’t own any cryptocurrency. I never will.”
Cryptocurrencies have been gaining ground globally. However, in my view, the basic premise around cryptocurrencies if flawed. Looking at the volatility in cryptocurrencies, it cannot be a medium of exchange. Imagine, selling goods in bitcoins and finding yourself poorer by 20% at the end of the day. Also, if someone is not willing to trust the so-called “fiat currencies” printed by central banks, it should be even harder to trust a so-called currency traded on fraud-prone private exchanges. While blockchain technology might find a lot of uses in other industries, cryptocurrencies are just what they are. A trading instrument with no fundamental value.
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