Berkshire Hathaway CEO Warren Buffett held his Annual General Meeting last Saturday in Omaha, Nebraska. Buffett was explicit in his belief that the US will come out of the current crisis stronger. Only time will tell how it exactly unfolds.
He spoke to a virtual crowd for 4 hours and spent a good amount of time urging his shareholders to stay optimistic during these tough times.
He pointed out that the previous moments of adversity in US history such as the Civil War, Spanish Flu, Great Depression, World War II, and the 2008-9 Recession helped make America what it is today. The current crisis, he believes, has a silver lining.
In the last few months, Berkshire bought $1.8b of equity and has sold off around $6.1b of shares, primarily in the airplane and travel industry. This is after reporting a record $50b loss in the first quarter.
Berkshire Hathaway at the end of the first quarter, holds $137b in assets.
Unlike the last recession, he is not currently buying up.
Berkshire Hathaway and Warren Buffett are holding in wait.
There are several thoughts on this:
Firstly, the biggest difference in the two recessions in that in 2020, the economy is being shut down involuntarily because of the effects of the COVID-19 Quarantine. Until the quarantine is lifted worldwide, it will be impossible to know when and how the market will recover, as well as forecasting the long term effects of the shutdown. Buffett is believed to be waiting because of the unique uncertainty at this present time.
Secondly, in his own words he has said that nothing appealing has presented itself yet, and that the prices for many stocks are still too high.
That brings us back to investments in the time of COVID-19. What to invest in?
As we mentioned in our recent article, “Old Money” invests in Land, Art and Gold.
Investing in Real Estate while mortgage rates are at their lowest since Freddie Mac began recording them in 1971 is a way to get in before the next upswing of the bull market.
Specializing in the real estate sector, BAI Capital is a boutique company specializing in raising, managing and applying private capital for investment in new companies and new projects.