Warren Buffett says inflation ‘swindles almost everybody,’ Munger rails against bitcoin,

In addressing a question about inflation, Buffett talked about the massive stimulus during the pandemic as a key reason for the rising prices now.

“You print loads of money, and money is going to be worth less,” Buffett said.

However, he did not criticize the Federal Reserve for its actions to boost money supply and stabilize markets during the health crisis.

“In my book, Jay Powell is a hero. It’s very simple. He did what he had to do,” Buffett said.

— Jesse Pound

Mounting concerns about actions by the Chinese government in recent years has affected the prices of some Chinese stocks, particularly internet shares. Charlie Munger said he’s willing to take on that risk for a good investment.

“The reason that I invested in China is I get so much better companies at so much lower prices,” he said. “And I’m willing to take a little bit more risk to get into the better companies with the lower prices. Other people might reach the opposite conclusion, and everybody is more worried about China now than they were 50 years ago.”

Munger’s comment came in response to a question from an audience member, who asked about “the clear dangers of investing under authoritarian regimes,” and cited atrocities in Russia’s war on Ukraine.

“There’s no question about the fact that the government of China has worried the investors from the United States,” Munger said. “There are more difficulties … dealing with the regime in China than there are the United States. And it’s different, it’s a long way away and they’ve got in their own culture in their own loyalty.”

— Tanaya Macheel

The possibilities for Berkshire Hathaway are endless in the eyes of Warren Buffett, who likened the company to a work of art.

“I look at Berkshire as a painting,” Buffett said. “It’s unlimited in size; it’s got an ever-expanding canvas, and I get to paint what I want.”

Buffett did acknowledge that he doesn’t know much about art, but added that “other people look at paintings and they see something, then they’ll see something additional later on, and they really have a different sort of perception in relation to that. To me, Berkshire is a painting, and I get to paint.”

“It’s in my head, and I see different things in it as I go along,” Buffett said. “It’s satisfying.”

— Fred Imbert

Warren Buffett said Berkshire Hathaway has been increasing its stake in Activision Blizzard in a merger arbitrage bet that Microsoft’s proposed acquisition of the video game company will close.

In the fourth quarter of 2021, Berkshire first purchased about $1 billion worth of Activision Blizzard stock, in a bet the company was undervalued. Buffett has said Berkshire “had no prior knowledge” of Microsoft’s plan to buy the company when Berkshire made its initial investment.

In January, Microsoft announced intentions to buy Activision for $95 per share. Its stock closed at $75.60 per share on Friday.

Buffett said he has been buying more shares of Activision since the deal was announced as the stock is trading way below Microsoft’s offer. Buying at these levels will yield a bigger return if the deal closes.

Buffett said Berkshire now owns about 9.5% of Activision. “If we went over 10%, we would file a report,” he said.

“If the deal goes through, we make some money, and if the deal doesn’t go through, who knows what happens,” Buffett said.

“We don’t know what the Justice Department will do, we don’t know what the E.U. will do, we don’t know what 30 other jurisdictions will do. One thing we do know is that Microsoft has the money,” Buffett added.

—Hannah Miao

When asked about his previous comments that inflation “swindles” equity investors, Buffett said the damage from rising prices was much broader than that.

“Inflation swindles the bond investor, too. It swindles the person who keeps their cash under their mattress. It swindles almost everybody,” he said.

Buffett pointed out that inflation also raises the amount of capital that companies need to have and that it isn’t as simple as raising prices to maintain inflation-adjusted profits.

The Berkshire Hathaway CEO cautioned against listening to people who claim to be able to predict the path of inflation.

“The question is how much … and the answer is nobody knows,” Buffett said.

Buffett reiterated that the best protection against the inflation is investing in your own skills.

— Jesse Pound

Warren Buffett wants to make it clear that he’s not the only one at Berkshire Hathaway picking stocks.

“I see headlines in papers just time after time after time that say, ‘Buffett’s buying such and such,'” Buffett said. “I’m not buying such and such. Berkshire Hathaway is buying.”

The investor said a stock pick may have been made by other finance professionals in his organization without Buffett’s ever having heard of it.

“But the headline will attract more people if it says Buffett buying this than if it says Berkshire Hathaway, and we don’t know whether it is the people that work for him, the headline is designed to bring people into the story,” Buffett said.

“The easiest thing to do is basically shut up and not have a bunch of people facing consequences they didn’t ask for in the first place,” he said.

— Sarah Min

A trip to the New York Stock Exchange when he was 9 years old was inspiring for Warren Buffett, who is known to have started investing when he was 11 years old.

“I went to the New York Stock Exchange, I was in awe of it,” Buffett said. “I got very interested in technical analysis and charted stocks and did all kinds of crazy things, did hours and hours and hours and saved money to buy other stocks and tried shorting. I just did everything.”

The investor bought a stock at 11 after spending his childhood reading books on the subject from the library and in his father’s office. He said his approach to investing later changed completely when he was 19 or 20 years old after reading one particular book passage in what he said must have been Benjamin Graham’s “The Intelligent Investor.”

“I looked at this book and I saw one paragraph and it told me I’ve been doing everything wrong. I just had the whole approach wrong,” Buffett said.

— Sarah Min

Charlie Munger pointed to commission-free brokerage Robinhood as an example of a good idea that got “grossly overdone.”

The stock fell below $10 per share last week after the company announced layoffs and a decline in active users. It debuted at $38 per share in July 2021.

“Look what happened to Robinhood, from its peak to its trough,” Munger said. “Wasn’t it pretty obvious something like that was going to happen?”

Munger said the “hidden kickbacks” of that business model were “disgusting.” Robinhood makes money from a practice known as a payment for order flow. It receives some of the spread on trades the company forwards to larger trading houses.

“It’s unraveling. God is getting just,” Munger said.

— Jesse Pound

Charlie Munger is still down on bitcoin.

He responded to an audience member question asking what single stock they would invest in given how high inflation has been rising.

The Berkshire executives didn’t say where they would put their money, but Munger was clear about where he wouldn’t invest: bitcoin.

“When you have your own retirement account, and your friendly adviser suggests you put all the money in into bitcoin, just say no,” he said.

Munger’s answer was a thinly veiled reference to big news from Fidelity this week, which will now allow employees to put bitcoin into their employee-sponsored retirement accounts.

Munger and Buffett have both long been critics of bitcoin, which has become increasingly attractive to certain investors for its potential as an inflation hedge.

— Tanaya Macheel

Warren Buffett said he has never figured out how to time the markets.

“We haven’t the faintest idea what the stock market was gonna do when it opens on Monday,” Buffett said in response to an audience question.

“I don’t think we’ve ever made a decision where either one of us has either said or been thinking we should buy or sell based on what the market is going to do, or for that matter, on what the economy’s going to do. We don’t know,” he continued.

The Oracle of Omaha said he often gets misplaced credit for the stock winners he’s picked over the years, pointing out he’s also missed out on some big opportunities as well. Buffett said he failed to make some big purchases in the early days of the pandemic. In a single day in March 2020, the Dow Jones Industrial Average dropped 12.9%, its worst day since 1987.

Instead, Buffett adheres to a value investing strategy, or picking stocks with attractive valuations, instead of focusing on the vagaries of the stock market.

“We have not been good at timing,” Buffett said. “We’ve been reasonably good at figuring out when we were getting enough for our money. And we had no idea when we bought anything, but we always hoped it would the down for a while so we could buy more. … I mean, that stuff, you could you could learn in fourth grade.”

— Sarah Min

Berkshire Hathaway Vice Chairman Ajit Jain, who runs all of…