BREAKDOWN: Why Warren Buffett's Bearishness Should End V-Shaped Recovery Talk
CoinDesk Podcast Network
CoinDesk
4.8 • 689 Ratings
🗓️ 4 May 2020
⏱️ 17 minutes
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Summary
This episode is sponsored by ErisX, The Stellar Development Foundation and Grayscale Digital Large Cap Investment Fund.
One month after the bankruptcy of Lehman Brothers in 2008, Warren Buffett wrote an Op-Ed saying that he was buying stocks. Yet during the Coronavirus crisis, he is sitting firmly on the sidelines.
On Saturday night, the “Oracle of Omaha” spoke for 4.5 hours in the first ever virtual version of the Berkshire Hathaway annual shareholders meeting - an event which some have called the “Woodstock of Capitalism.”
On this episode, NLW examines some of the key topics of the presentation, including:
- Why Berkshire sold their entire $6.5B stake in the airline industry
- Why they were sitting on $137B in cash
- Why they haven’t made any investments
- How the Fed gave companies better terms than they were willing to
It was hard not to watch the presentation and conclude that Buffett feels that there are simply too many unknowns in the world going forward to feel comfortable doing much in the market right now.
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Transcript
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| 0:00.0 | Welcome back to The Breakdown, an everyday analysis breaking down the most important stories in Bitcoin, crypto, and beyond. |
| 0:12.7 | This episode is sponsored by ArisX.com, the Stellar Development Foundation, and Grayscale Digital Large Cap Fund. |
| 0:20.2 | The Breakdown is produced and distributed by |
| 0:22.1 | Coin Desk. Here's your host, NLW. Welcome back to the breakdown. It is Monday, May 4th, and today we |
| 0:32.1 | are talking about Warren Buffett and the Berkshire-Hath annual shareholders meeting, which was because of COVID-19, |
| 0:39.2 | a virtual event for the first time ever. Before we dive in, why are we talking about the Bitcoin |
| 0:44.8 | is Rat Poison Squared guy? I think there's a few reasons. First, understanding how people who |
| 0:51.1 | disagree think is kind of relevant if we are trying to go out and evangelize |
| 0:56.8 | Bitcoin. So that's part of it, but it's a smaller part. But a larger part of it is that Bitcoin |
| 1:02.2 | operates in a macro context, at least for most of the market. Sure, there are people who are |
| 1:08.0 | hodlers of last resort, hodlers forever, basically, who don't even care what's going on in the larger markets. But there are people who are hodlers of last resort, hodlers forever, basically, who don't even |
| 1:12.3 | care what's going on in the larger markets. But there are many holders of Bitcoin for whom the |
| 1:18.3 | market context is relevant. And we've seen that. We've seen the correlation with parts of this market |
| 1:23.6 | over the last few months. And when it comes to understanding that macro context, Buffett is a good |
| 1:29.3 | barometer, especially because right now everyone in the larger markets is trying to figure out |
| 1:34.6 | if this is going to be a V-shaped recovery, right? A fast bounce back, pent-up demand, that everything |
| 1:40.1 | kind of just goes back to normal. Obviously, those who are thinking about second and third |
| 1:44.5 | order effects tend to not think that there's any real normal to go back to in quite the same way, |
| 1:50.1 | but as markets really, really hope for and try to manifest and try to self-fulfilling prophecy, |
| 1:55.6 | this V-shaped recovery into being, understanding what Buffett thinks is an interesting way to explore the possibilities |
| 2:04.1 | there. What we're going to do is we're going to talk about the event and a few key notes from it, |
| 2:09.6 | and then maybe try to wrap it up and understand broadly where Buffett thinks we are. |
... |
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