Billionaire investor Warren Buffett said the sharp decline in stocks after the news of US tariffs was 'insignificant', investors need to learn to adapt.
Warren Buffett, Chairman and CEO of Berkshire Hathaway, spoke out to reassure investors about the recent volatility in the financial market. At the annual meeting on May 3, he expressed his opinion: "What has happened in the last 30, 45 days... is really insignificant".
He pointed out that there were three times in the past 60 years that Berkshire Hathaway shares fell by 50% despite no major problems with the company during these periods. "I'm not scared by the things that other people... are scared of financially. Suppose Berkshire fell by 50% next week, I would see that as a great opportunity and it wouldn't discourage me at all," he said.
Therefore, the billionaire investor said the recent action in the US stock market should not be described as a major upheaval. "This is not a major bear market or anything like that," Buffett asserted.
The comments from the world's fifth-richest person come as investors wonder what's next amid concerns about US President Donald Trump's controversial tariff policies. The May 2 session recorded the longest winning streak since 2004 as Wall Street recovered losses from the sell-off after the reciprocal tariff policy was announced. It marks a remarkable recovery for US stocks after the market fell into a bear market last month, falling more than 20% from its recent peak, before rebounding.
Buffett said previous market cycles were “very different” from what investors are facing now. He reminded investors that the market has generally been rising during his lifetime, but warned investors to be prepared for some rough patches.
He cited the Dow Jones Industrial Average, which fell from 240 points in 1930 to 41 points during the Great Depression, as an example of how the current decline is not alarming. Despite some “hair-raising” events, the index closed last week at 41,300 points.
"If your stock is down 15% and you're worried, you need to change your investment philosophy a little bit. The world won't adjust to you. You have to adjust to the world," he said.
He also commented: "People have emotions. But when you invest, you have to leave your emotions at the door."
Buffett also noted that Berkshire Hathaway currently holds $347.7 billion in cash, ready to take advantage of attractive investment opportunities when they arise. He said he has not bought back Berkshire shares this year because he has not found the price attractive.
(according to CNBC)