During the recent 2024 Berkshire Annual Meeting, Warren Buffett reflected on past experiences, acknowledging he’d gained wisdom. He anticipates future challenges, expecting crises akin to 2008 but not identical.
He emphasizes the need for quick access to substantial funds, foreseeing crises occurring every 5-10 years due to increasing global complexity.
He believes the more intertwined and sophisticated the world financial situation gets, the more vulnerable it gets in a certain sense. It solves a lot of small problems but leaves it more vulnerable to large problems.
Here’s an excerpt from the meeting:
Buffett: I think I’ve missed a lot of stuff in the past, so I’m actually wiser about doing that now, but I would do it better this time around than in 2008 if something akin to that happened.
But it won’t be exactly like 2008 or 9, you can be sure of that. But you also can say that there will be times when having huge sums available extremely quickly—maybe it’ll be once every 5 years, maybe it’ll probably be more like once every 10 years or something.
But as the world gets more sophisticated, complicated, and intertwined, more can go wrong.
There’s no sense going through here exploring the possibilities of the different things that could happen, but you would want to be able to act when it happens.
And I think the chief executive should be somebody that can weigh buying businesses, buying stocks, doing all kinds of things that might come up at a time when nobody else is willing to move. It wasn’t that people didn’t have money in 2008; it’s that they were paralyzed.
And we did have the advantage of having some capital and a willingness to act, even an eagerness to act. The government looked at us as an asset instead of a liability. And I think that all of those qualities will be even more important as our capital pile grows.
So I think Greg may have even more fun than I had in a period when extraordinary things were happening, and we were the logical place to go. You never know whether it’ll be next week, next year, or next decade, but it won’t be a century from now, that’s for sure.
And the more intertwined and sophisticated the world financial situation gets, the more vulnerable it gets in a certain sense. It solves a lot of small problems but leaves it more vulnerable to large problems.
You can watch the entire meeting here:
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