Original title: The hottest topic of the shareholders meeting!Buffett: The best way to fight inflation is to invest in yourself From: Financial Associated Press
As U.S. inflation data continues to hit a 40-year high this year, before the Berkshire shareholders meeting this week, how to view and deal with the current U.S. inflation is almost a question that the industry expects Buffett to be asked. .
And in the end, it is not surprising that questions around the topic of inflation ran through the entire shareholders meeting – at least three times, and how does Buffett view inflation?
Buffett’s “One On” Inflation: The best way to fight inflation is to invest in yourself
Before the halftime of the shareholders meeting, a Berkshire shareholder from New York was the first to ask Balao on the topic of inflation: “The current U.S. inflation has reached the highest level since 1982, and we know that you are actually on the board. In the 1970s, you experienced a similar inflationary situation, when your portfolio suffered losses, but you made the best investment decisions of your life, so I want to ask: If at this moment, you would choose If you invest in a stock, which one will you choose?”
In this regard, Buffett ridiculed that the questioner was “really cunning, and asked me all of a sudden.” In the face of this rather thorny question, Ba Lao did not directly answer it, but sent a bowl of “chicken soup for the soul” – the best way to fight inflation is to invest in yourself!
Buffett said, “The answer I have to give may be more than one stock. I think the best thing you can do at the moment is to be very good at something – if you are the best doctor in town, if you You’re the best lawyer in town, if you’re the best (professional) … people will trade what they produce in exchange for what you can offer.”
“If you decide to do something, whether it’s singing, playing baseball, or being a lawyer, whatever it is, the ability you have is something that others can’t take away, and it’s impossible to lose it because of inflation. Others will make deals with you. , the trade is your ability, and this is the best kind of investment.”
The “Oracle of Omaha” added, “So the best investment is to develop yourself, and you won’t be taxed to develop yourself, and that’s what I’m suggesting at this time, and any ability you have won’t be taxed. taken away.”
Buffett also quoted the famous author Malcolm Gladwellwell)’s “10,000-hour law” – anyone who does one thing, after 10,000 hours of training, can change from an ordinary person to a top talent in a certain field.
“I could have spent 10,000 hours trying to be a heavyweight boxer, but I don’t think I’ll be good after 10,000 hours. But you always stumble upon something you really enjoy doing, something you’re good at. , something useful to society.”
Interestingly, when Buffett answered this question, Munger also shouted that when you set up your own retirement account, if your friend suggested that you put bitcoin in it, just say no to him.
Buffett’s “Second Comment” on Inflation: Inflation “Cheats Almost Everyone”
Buffett was asked a second time about inflation shortly after halftime at the shareholder meeting — when asked about his previous comments about inflation “deceiving” stock investors, Buffett said that higher prices do far more damage More than that.
“Inflation also fools bond investors, people who hide their money under their mattresses, and inflation fools pretty much everyone,” Buffett said.
Inflation also increases the amount of capital a company needs to have, Buffett noted, and it’s not as simple as raising prices to maintain inflation-adjusted profits.
Buffett warned investors not to listen to those who claim to be able to predict inflation trends: No one knows what inflation will look like in 10 or 20 years, but everyone is talking about it right now.
Buffett reiterated that the best defense against inflation is still to invest in a skill.
Warren Buffett’s “Three Comments” on Inflation: This round of inflation is not the same as before
Shortly afterward, Buffett spoke again on inflation in response to a shareholder question about how inflation is affecting Berkshire’s business.
Buffett said this round of inflation is very different from previous experience. Buffett, using his furniture store as an example, said, “Even though we see some furniture prices go up, the rich will continue to buy them when they sell them. They make a lot of money, and they will continue to buy those that are more expensive. Premium furniture.”
“But people didn’t have money in the early years, when people couldn’t afford a car, they couldn’t afford a refrigerator, they couldn’t even afford sugar and coffee, let alone gasoline. Compared to then, people can’t afford it now. It’s actually a lot of money, even if the prices of those products have gone up.”
Buffett said, “So when many people are writing textbooks, I think these previous experiences and their consumer buying behavior may write completely different conclusions now because the inflation situation they are facing is different. “
Buffett also talked about massive stimulus during the pandemic as a key reason why prices are rising now. Buffett said, “You print a lot of money and it becomes worthless.”
Still, Buffett defended the decision to “helicopter money” and believes it was the right choice. “We’re seeing the scale of inflation now, but the country has to do it again because the epidemic is also unprecedented, and these problems have not been encountered before.”
Buffett said, “So I think the Fed chairman is really a hero, if he doesn’t do anything, then there is a good chance that he will be like what you call a thumbs in his mouth doing nothing and accomplishing nothing. And he did what he had to do.”
