What Warren Buffett Said This Weekend That Should Worry you!
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Warren Buffett talked stocks, the economy, the fed, and the stock market for 5 hours this weekend… Warren Buffett is a legendary investor and businessman… You should be worried based upon not what he said… but what he DIDNT do…
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Windows, if you didn’t already know the goal was talking this weekend, and when the goat speaks, you just sit down for a few hours in your lesson. And that’s exactly what I did this weekend. I was listening to the goat Mr. Warren Buffett speak one of the greatest businessmen of all time, but also one of the greatest stock pickers of all time.
It’s very hard to be successful, and you know, ultra successful at both those subjects, but he is okay. So when the goat speaks, I listen. Okay. Basically, they had their annual shareholder meeting that they have each and every year. Now, this is usually packed, they usually fill up an entire arena, which is a craziest thing.
Like I like imagine that an annual meeting of this company and they literally have an arena full of folks like there to listen to Buffett speak. It’s absolutely incredible. Obviously, this year, they can’t do that. Okay, they’re running around, like, like, there was nobody in the arena.
They did it in the arena. But it was pretty much as Buffett in like a few camera people like that’s basically what the meeting was. And something else very interesting that happened at this meeting was Charlie Munger, which is Warren Buffett’s kind of like right hand man and investing partner and also his main business partner.
He wasn’t there. Charlie Munger was not there. Now, Charlie Munger, he is 96 years old. And you know, buffet kind of said, Well, you know, with everything is going on, you know, it’s not really worth him making the trip. But I don’t know.
I mean, this guy is gonna fly on a private jet. He’s not gonna fly with anybody else. And something we know about Charlie Munger, he can be very, very candid about situations. And I think if he was to speak, I think he would have scared a lot of people, I’ll be completely honest, because I think Charlie Munger is is sometimes you know, very, very candid.
Let’s put it that way. And I think with everything going on right now, I think he would have, I think, I think there’s a high probability the gentlemen would have been extremely negative and maybe they just, you know, didn’t want that. Okay, there’s something else I will say Warren Buffett is an absolute animal. This guy spoke for almost five hours straight.
Okay, five hours straight, didn’t even take a restroom break. I was like, this is this is the most ridiculous thing I’ve ever seen. Okay? If you didn’t know, Warren Buffett’s at nine years old, okay, talk about a beast. I mean, you know, if we can all watch this video right now, we can just, you know, hope to be, you know, still live at 89.
And in the mental space that Warren Buffett is okay. I mean, you know, people are usually alive at 89. They don’t know what the heck’s going on. This guy was competent enough to answer questions, and talk for five hours straight on the economy, stocks and everything in between what a beast, okay, absolutely incredible.
Now, real quick here. I’m somebody that’s been studying Warren Buffett’s since 2009. Okay, since back in my college days, that’s when I started studying Warren Buffett, and a lot of my investing principles. I basically stole from Warren Buffett, I’m not too proud to say it like most of my investing principles I stole from Warren Buffett, do we buy the same exact stocks? No.
Do I invest the exact way Buffett would? Would he invest the same way? I would No, but there’s a lot of the underlying principles we just agree on. Okay, this guy been studying for a long time, they way back in when I go to the computer lab at Glendale Community College and men, I would binge watch Buffett videos for hours, hours and hours in there. Okay. 2009 2010.
You know, the internet was fast. It was awesome, man. And that’s back in the old YouTube days, when people when it was just like individual people would like, you know, steal clips from like, you know, if he was on CNBC, or if he was on Bloomberg, or if he was like, speaking of some class or whatever, and they would just post them on YouTube.
It was back before like CNBC had like an official channel. It was like putting out content and those sorts of things. It was amazing, okay, and I was just looking to stocks. And I would do that in the computer lab all day. So I’ve been studying Warren Buffett for a long time. So whenever Warren Buffett speaks, I listen.
Okay. And I kind of know if you know, Warren Buffett talks a lot in code, let’s put it that way. Okay. And so I can kind of decipher this code that Warren Buffett’s talking. So I think I’m kind of an interesting person to, you know, talk about what Warren Buffett essentially means and what Warren Buffett does out there and what all this means, okay, rather than just some guy that’s making a warren buffett video like this is, it’s probably been nobody.
I’ve studied more over the past 11 or 12 years, then Warren Buffett to be completely honest. Okay. So first, there was something of Warren Buffett said that was super scary. And if you’re anybody that’s investing in the stock market right now.
I think, you know, it’s just something to think about what the second part is scarier my personal opinion and should give you way more pause if you’re just thinking about buying into this rally, okay? Because Buffett did something guys, that is that is really scary.
Okay, so I hope you guys enjoy this as always smash the thumbs up button, we’re going for only like 77 billion thumbs up because that’s Warren Buffett’s net worth I believe, as today, okay. 77 billion thumbs up and I will feel fulfilled and by the way, in that five hours, Warren Buffett brought up YouTube videos to Weiss I can’t you’re not making this up. Okay.
He literally brought up two YouTube videos, and then made comments about how few views they had, okay, one had like 838 views and he’s like, Oh, this video should have way more views or something like that, in another video have 1000 I think 438 views or something like that.
And he’s like, yeah, it only has that many views, and that Really good presentation or whatever. So I just thought it was absolutely hilarious that he brings up YouTube and then he brings up the view counts. I’m like he’s starting to talk like a real YouTuber. And Buffett, all I’m gonna say is Hey, man, I got plenty of views you know, you could you can have my views.
I’ll give you my channel, you just give me a Berkshire shares, we’ll call it a day. Okay. Alrighty. Let’s get into this case. Buffett cautions on extreme consequences from the feds recent moves, okay, not just consequences, not just like something to worry about extreme consequences.
And keep in mind, Warren Buffett, usually I would almost see downplays a lot of negativity. He’s not a man that goes out of his way to scare the markets, if anything, he goes out of his way to make the markets feel confident, make people focus on long term, and all those sorts of things.
That’s huge. That’s Warren Buffett at the end of the day. So for him to use language, you know, as being Warren Buffett of extreme consequences. You know, that’s something to think about, okay, here’s what here’s what he says cases, we’re doing things that we really don’t know, the ultimate outcome to the 89 year old investing legends said on the virtual meeting.
I think in general, they’re the right thing, but I don’t think they’re without consequences. And I think they could be of extreme consequences, if pushed far enough. Okay. But there would be kind of extreme consequences if we didn’t do that, which is, which is, you know, makes sense.
I mean, at the Fed was in backstopping everything right now, you know, things would be a lot worse off, right? I mean, a lot worse off. So he definitely has a point there. But at the same time, he’s talking about extreme consequences if we keep pushing things the way it is, okay, growth of the Fed’s balance sheet slows, but it just hit a record of $6.7 trillion last week, okay.
A number that folks thought would just be, you know, inconceivable, especially in 2020. Like, if you told anybody, you know, the Fed’s balance sheet is going to hit 6.7 trillion in 2020. I think almost any person would have said, No, that’s not happening. Okay.
That’s super unrealistic. Okay. But the ones that 100 year event came out the rolling rotor, right, in that we’re looking at that. And here’s the thing, guys, in my personal opinion, you want to know, my personal opinion, I think that number is gonna go way higher, especially especially if we have to stay shut down for a longer period of time. Or if we have, you know, the Roni, Roni start to kick back up big time in the fall.
Let’s say we do open the economy over the next month. And then let’s say Roni roenick comes back with that vengeance in the fall time, guys, that that balance sheet will go grow to 10s of trillions of dollars. I know that sounds absolutely ridiculous, but you know, $7.7 trillion.
It’s kind of ridiculous just a few months ago, and now we’re at 6.7 trillion. And so it will go up a lot. And Buffett’s worried about this guy’s he’s absolutely worried about this. He says, there’s going to be extreme or there’s, you know, the possibility of extreme consequences of doing this.
And you know, J pal, mister money printer, you know, he wants to own everything. Okay, I think I think I think offense is going to own everything in the day. They’re gonna own all the bonds, they’re gonna own all the businesses and they’re just gonna own everything.
You know, by the way, check out this meme for you guys. I think this was a kind of a funny one. I don’t know where I found this. But I was like, Oh, I gotta share this with you guys. It’s true. Okay. Alright, guys. So now to what should really scare you, you know, is always you know, you can listen to somebody talk.
And that’s cool. Okay, somebody can say this. They can say that. But what are their actual actions? Okay, what are their actions? And this is where it gets really important to pay attention to not just what Warren Buffett says. But what is Warren Buffett doing much more important. Warren Buffett sold all his stakes in the airlines, every last one of them.
Okay, if you didn’t know Warren Buffett was heavily invested in his company, Berkshire Hathaway was heavily invested in delta, Southwest, American united, they sold them all. They didn’t care what the price that they sold them out. They just sold them.
They’re like we’ve got to get out of the airline business. And they sold at a loss. Okay. They lost I think it was around was like one to $1.7 billion, or something like that, which you know, for Berkshire Hathaway’s in the biggest loss in the world, but still, it’s a loss, okay, to just sell at a loss.
And keep in mind, Warren Buffett is a long term thinker, okay. This is a guy that invest for the long term, he’s investing his businesses thinking about the next 510 1520 years. So for Buffett to say, I want nothing to do with the airlines guys, this is massive, that is him essentially saying that the airlines will never be the same.
And keep in mind, Warren Buffett is not just a great businessman and investor, he understands a on a very high level human psychology. So there has to be something higher here. We’re Warren Buffett feels like these airlines are never going to be the same. The profits they were being bringing in the past will never be the same because once again, he was not doing this as a short term trade.
So to sell off these he believes that even Five years, 10 years from now, the airlines won’t be the same. So I think this is a big moment to just understand that a long term thinker such as Buffett is really worried about the travel industry, and probably the psyche of just humans in general out there going around and traveling in airplanes, guys, that’s unbelievable.
For him to sell at a loss guys, is absolutely extraordinary. Okay. That’s not the craziest part. The craziest part number two, is they is Warren Buffett didn’t buy any stocks the past two months, the market is considerably, considerably lower than where it was okay. You know, and you know, especially if you go back to where the market was hitting in March, then you’re talking about a massive difference.
And he didn’t buy any stocks. He didn’t buy any stocks, you know, they’ve got 120 100 and $30 billion, sitting around in cash and short term investments. They’re not exactly like strapped for cash, like, oh, man, we don’t really have any money around. Look at that cash load guys.
And this just shows you, you know, basically how it’s gone up over the years, you go back to march 31 of 2012, they have 37 billion on their balance sheet in terms of cash and short term investments and look at how it has grown over the past, you know, seven, eight years to now be in you know, right around 130 billion.
That’s incredible. And to not spend any money on any stocks. is is is is really worrying, okay, really worrying. That just shows that Warren Buffett believes the good prices haven’t come yet. Okay. Let’s be very clear about that. If Warren Buffett felt like things were accurately priced, and they were good deals, he wouldn’t be spending that cash, believe me on that.
And he’s just like, Nah, I’m good. I’m good. I don’t want any stocks right now. Okay. Now, maybe Warren Buffett just missed the boat. And he’s going to be regretting this. And that’s certainly a possibility. So guys, let’s go over some Warren Buffett facts real quick.
Okay. They have over $130 billion sitting around. He’s a long term thinker. And usually he is called buts a perma bull, which some people call me a perma bull, usually okay. And you guys know, for the past month or so, I have not been very interested in putting much money at all into stocks.
I’m like, I’m gonna hold current positions. But in terms of putting a bunch of money into new stocks, like hundreds of 1000s of dollars. I’m good. I’m gonna keep that on the sideline right now. Okay. This is Warren Buffett, he decides not to buy, okay, stocks go down a ton.
He says, No, why not? Okay, what is the truth behind this? What makes Warren Buffett with all that money? And somebody that’s usually always bullish, and somebody has a long term thing to say, Nah, I don’t want to buy stocks right now. This is the this is the biggest question.
I can answer this for you right now. Okay. valuations, the fact is, right now, regardless, if you have, you know, $10 on the sideline, or $130 billion on the sideline, the fact is, right now, valuations are not attractive on most of these stocks. Because we don’t know how this whole thing’s gonna shake out.
This is a dramatically bad situation that ronnie run, we’ve never shut down money velocity, we’ve never shut down global economies like this. And the worst part of this is we don’t know how long this goes for. Let’s say we do open up the economy in a month from now, which we don’t even know if that’s for certain.
But let’s say we open up the economy over the course of next month, how many people are actually going to go out and spend at the businesses? Is business going to be 80% of what it used to be? Is it going to be 100%? Is it going to be 50% 40%? This is real mass uncertainty that we have no clue.
Because this, isn’t it. This is an experiment we’ve never done in modern history. There’s no other time period. We can go back and study and look and say, Oh, we shut off money velocity, oh, we shot the money, the whole economy for blah, blah, blah, time, and then this is how it came back.
We can’t we have no data on that. We that witness is unproven. So Warren Buffett’s looking at this and he’s like, Ah, yeah. Especially with this market being we know how much it’s recovered in the month of April. He’s looking at this market and saying, No.
I think I think I’ll stay cash right now. Okay. But Mark is pricing in a lot of good news. And we have no coop. Okay. And Buffett did say, you know, Warren Buffett did specifically say in the presentation, that he didn’t see a lot of attractive pricing out there, when it came to, you know, making a big purchase or something like that.
And I’m right there along with them. I think with the massive risks we have in the market. You know, you’re if you’re investing in stocks here today on what is today may 4 or something like that, what is today, may 4, if you’re if you’re gladly buying stocks on May 4, fair game, you’re buying on hope in 100% hope because the fact is, we don’t know. I don’t know how any of these places.
I don’t know how many of them are going to stay in business and if they do stay in business, I don’t know what their room capacity is going to be. I can’t accurately tell you that. You know, I even own a company named Wynn resorts and I can say my investment in them right now is basically just on hope, because I don’t know like they need you know, room.
Occupancy of at least 70 to 80% to make money? And will they have room occupancy of 70 80% anytime within next year, too, I’m not so sure. So unless you’re giving me SILLY PRICES, in regards to the stocks in these assets, I, you know, it’s good to kind of stay on the sidelines. If you’re thinking about new money.
I think Warren Buffett’s in that same exact camp, you know, let other you know, if other people want to speculate and hope that that, you know, things will just magically all come back and everything’s gonna work out and the economy is going to be great.
And next, you know, one to two or even three years, let them do that. But for us to already have a lot of money invested with a lot of money on the sidelines, it doesn’t make it the risk reward isn’t simply not there, the risk reward is simply not there at the moment, it could get back there if we have clarity in the market.
And you could start accurately predicting some of these companies earnings, which we won’t get for at least a quarter or two. If we get it done. Think about that. The earliest we’re looking at a quarter or two, you know, all these companies that report earnings right now, it almost doesn’t matter.
It’s cool to look at the numbers. But the fact is, next quarter is when we’re going to start getting some truth. And then the following quarter is when we’ll start getting the real truth. And then we’re going to know really how bad things are, or how good things are. Maybe everything comes back.
And it’s like, well, that was easy. We shut down the economy, the Fed just backstopped everything, no look at we’re right back to normal. But there’s, I would say there’s a high probability. That’s not how this works out. I think Warren Buffett and myself and a lot of others are thinking unemployment is probably going to stay high for quite a considerable amount of time.
We’re looking at unemployment rates, the United States of America have potentially, you know, 20% Plus, when we open back up this economy, and I think there’s a high probability it will stay above 10% for at least one to two years, if not further out than that. And when you think about it, from that perspective, that is severely damaging for the economy.
That means business in general, if you’re talking about unemployment rates of 10% Plus, that means business in general just won’t be in that strong of a space. Like if business is really strong, then the company is going to be hiring you see unemployment rates get down to you know, five, four or even 3% which is what we are seeing in 2019 and even the first month or two here or 2020 and.
It’s just it’s dramatically changed in the fact is risk reward is not very attractive in the stock market. And it’s certainly not something I like saying Believe me, I love to be the guy that’s like three stocks I’m buying you know, I love that I love that I can’t be that guy right now. Warren Buffett can’t be that guy right now.
Okay. And and you know, in a market like this, you know, you can’t get desperate to buy things only buy things if it’s like a very special opportunity something short term where I can make money like you know, we’ve made money in nit we made money in uso you know, short term plays like that which I very rarely do those but mainly I invest my big money for long term investments.
And just at the end of the day, a lot of these long term investments are not priced like they should be priced in my opinion. If we get silly pricing on stocks once again we have a massive you know, stock market collapse type situation. Hey, I will gladly buy on hope then.
But I’m not gladly buying on hope when the when the NASDAQ is right around break even for the year. I’m not gonna buy on hope. When the Dow’s your you know the s&p 500 is down nine or 10% on the year considering we just shut off money velocity, I’m not going to buy on hope in that scenario, silly pricing. I will buy on hope this type of pricing.
No, I think the risk reward is not really stacked in my favor in this situation, guys. So hope you enjoyed this video. Let me know what you think about Warren Buffett and his decision making down there to sell this to sell the airlines and also to not be buying any startups right now.
I really love to hear your guy’s perspective. Maybe you have a different perspective. Maybe you agree with Warren Buffett on this one. Thank you for watching and have a great day.