New York, USA (CNN Business) — US billionaire Warren Buffett’s Berkshire Hathaway company has made significant gains so far this year. But one of the greatest investors of all time wasn’t ready to declare himself an investing genius during Saturday’s annual shareholder meeting.
Buffett simply said that Berkshire’s strategy is about making rational decisions and investing for the long term.
“It’s not because we’re smart. It’s because we’re sane,” Buffett added at a Berkshire investor meeting.
Buffett shrugged off the compliments of a questioner about how well he tuned in to the stock market. He said he never knows what stocks or the economy will do in the short term.
He also joked that his bullish bets in the market often look bad at first, saying that he spent a large portion of his net worth in 2008 during the Great Recession buying stocks at a “tough time…a really stupid time”.
Berkshire made investments in Goldman Sachs and General Electric, among other major companies, before the market finally bottomed out in March 2009.
“We haven’t timed anything at all,” Buffett said, adding that the success of the company’s long-term “buy and hold” investment strategy is “simple.”
Charlie Munger, Berkshire’s vice chairman, lamented how speculators seemed to control Wall Street. Munger described the casino-like atmosphere, and Buffett described the market as a “gambling hall”.
Buffett did not elaborate on this year’s market volatility during the meeting. But he said inflation was a big problem that “fools almost everyone”.
He has given Federal Reserve Chairman Jerome Powell much plaudits for his actions to combat the economic crisis caused by COVID-19, although some argue that low Fed rates have helped fuel inflation pressures.
Buffett said Powell was a “hero” for taking the initiative and cutting rates quickly at the start of the pandemic rather than sitting aside and “thumb sucking.”
Buffett also hinted that Berkshire could benefit from the selloff, saying that the company is “dependent” on market behavior which creates false pricing opportunities for the company.