About the current climate, Warren Buffett said, “You can bet on America, but you kind of have to be careful about how you bet.”
The clearest sign of hesitation was his closed wallet.
Berkshire Hathaway’s cash on hand grew from $128 billion to $137 billion — and Buffett displayed no sense of urgency at all in respect to putting that cash to work.
“We have not done anything, because we don’t see anything that attractive to do,” Buffett said. “Now that could change very quickly or it may not change.”
As if that weren’t enough, at one point, Buffett sounded downright apocalyptic.
“Our position will be to stay a Fort Knox,” he said, adding that a $137 billion cash pile “isn’t all that huge when you think about worst-case possibilities.”
What kind of “worst-case possibilities” could Buffett be thinking of that would render a $137 billion cash pile anything other than huge..??
Warren Buffett’s caution, his hesitance, and his grim undertones may come across as a mystery to some. Why does the Warren Buffett of 2020 sound so different, and so dark, in comparison to the cheerfully bullish Buffett of 2008?
Well…. in 2008, there was a financial crisis that was quickly addressed via Wall Street bailouts and global stimulus from the world’s central banks. In 2020, we are dealing with something much different, and much worse.
You can’t solve a pandemic, heal a shattered real economy, or address unemployment and business failures approaching Great Depression levels, by whipping out a couple trillion in stimulus checks. Buffett can see that plain as day — which is why the 2008-vintage Buffett is nowhere to be found. The 2020 situation, combining a real-economy crisis with an ongoing pandemic, is not like a standard-issue financial crisis at all — and the Oracle of Omaha knows it.