Every 12 months at Berkshire Hathaway’s ((NYSE:BRK.A), (NYSE:BRK.B)) annual assembly, CEO and Chairman Warren Buffett and Vice Chairman Charlie Munger spend hours answering questions on investing and life on the whole. Even although most of the questions requested are pertinent to Berkshire’s companies, there are at all times a couple of takeaways for buyers.
For tens of 1000’s of shareholders, it’s a can’t-miss occasion and folks journey to Omaha from all around the world to get Buffett and Munger’s views.
Below are 4 of them that stood out.
Are Treasury Bonds a “Terrible Investment”?
When requested about his outlook for rates of interest on U.S. Treasurys, Buffett stated no one is aware of the place they’re headed, himself included. But, he did say U.S. Treasury Bonds are a “terrible investment at current rates or anything close to current rates.”
Buffett’s reasoning in opposition to long-term Treasury bonds is that the Federal Reserve has been vocal about focusing on 2% inflation and U.S. Treasury bonds yield a bit of over three%, which might drop to someplace round 2.5% after taxes. Therefore, particular person buyers are getting solely a couple of zero.5% return after inflation and taxes.
No Worries About a Trade War with China
The prospect of a commerce struggle, in addition to political back-and-forth between international leaders, added some volatility to markets over the previous few months. Ahead of the shareholders’ assembly, U.S. officers have been in China to barter commerce between the 2 nations.
When requested concerning the present state of affairs between the U.S. and China, Buffett stated that international commerce is a “win-win situation,” however he acknowledged that you just do run into some issues when “one side or the other may want to win a little bit too much and then you have a certain amount of tension.” Later, when requested concerning the influence of metal tariffs on Berkshire’s companies, Buffett stated, “I don’t assume both nation will dig themselves into one thing that precipitates and continues any sort of actual commerce struggle.”
Buffett and Munger Are No Fans of Cryptocurrencies
“Cryptocurrencies will come to dangerous endings,” Buffett stated. And Vice Chairman Charlie Munger has crudely summed up his unfavorable opinions on a number of events.
Buffett and Munger’s opinions on bitcoin actually aren’t a lot of a shock. Bitcoin is sometimes called digital gold, and Buffett isn’t a fan of gold both. Over the course of 1000’s of years, gold’s compound charge has been solely a “couple tenths of a percent,” Buffett identified.
Over the course of his investing profession, Buffett has usually shunned unproductive belongings. Instead, Buffett prefers productive belongings like a bond that generates an appropriate stage of revenue or a inventory that represents possession in a enterprise.
Berkshire’s Healthcare Venture Should Have a CEO Soon
Shares of well being insurers, pharmacy profit managers, and a few drugmakers took a beating when JPMorgan (JPM), Amazon (AMZN) and Berkshire Hathaway introduced they’d be teaming as much as enhance healthcare for his or her workers, particularly with the aim of bettering worker satisfaction and decreasing prices.
The healthcare partnership got here up a couple of instances and Buffett stated the three firms are within the technique of discovering the precise CEO for the job, and they need to be capable of announce who that’s “before too long”.
TD Ameritrade® commentary for instructional functions solely. Member SIPC.
Disclosure: I/we have now no positions in any shares talked about, and no plans to provoke any positions throughout the subsequent 72 hours.
I wrote this text myself, and it expresses my very own opinions. I’m not receiving compensation for it. I’ve no enterprise relationship with any firm whose inventory is talked about on this article.