Investor Myth – Warren Buffett sees the US economy in red on alert

The now-90-year-old star investor said at the meeting, which took place almost from Los Angeles: “It’s almost like a shopping spree.” “People have money in their pockets. They pay more.” Buffett attributed the unexpected and rapid recovery from the Corona crisis to the rapid and determined support measures taken by the Federal Reserve and the US government. They would have helped 85 percent of the economy stay on track.

But as growth rebounded and interest rates remained low, many prices rose, including Berkshire, Buffett said. As a result, inflation is higher than expected six months ago.

Warren Buffett says Berkshire Hathaway sees ‘very substantial inflation’ and raises prices https://t.co/x7exFgzjGe

– CNBC (CNBC) May 3, 2021

Buffett warned his investors that Berkshire cards are not the best at M&A. Listed blank check companies now control the market. The so-called Speaks are “a killer” for Berkshire’s acquisition candidates.

“It’s not going to last forever, but there’s money right now. Wall Street is going to be where the money is,” Buffett said. Over the past year, a lot of people have poured into the “casino” on the stock market.

Apple sales “probably a mistake”

Buffett said Joe Biden’s plans to raise corporate taxes would affect Berkshire shareholders. As for the dividend policy – Berkshire pays nothing – the new tax laws will not change anything. Buffett admitted that it was “a mistake” to cut its stake in Apple last year. However, at the end of March, Berkshire owned $ 110 billion from the iPhone maker.

The 90-year-old also gave insights into his next plans: Buffett told CNBC on Monday that Greg Abel, Berkshire’s vice president of business, in addition to insurance, would be his successor if he resigned. The 58-year-old has long been traded as a candidate for Buffett’s successor, who has so far kept the title a secret.

The Berkshire quarter ended with an unprecedented $ 145.4 billion in cash reserves because Buffett continues to fund financially faster than it can be used. However, stock buybacks pushed Buffett back: only $ 6.6 billion, less than the $ 9 billion record for the past few quarters. At equilibrium, the volume of share sales per quarter is the second highest in almost five years.

(Bloomberg / Money)