Warren Buffett on May 3 urged long-term investors not to be shaken by short-term swings and focus on fundamentals amid recent market volatility.
“What has happened in the last 30, 45 days … is really nothing,” Buffett told shareholders at Berkshire Hathaway’s annual shareholder meeting on May 3 in Omaha, Nebraska. “This is not been a dramatic bear market or anything of the sort.”
Buffett made clear that wild market swings, while unsettling in the moment, are nothing to panic about.
“If it makes a difference to you whether your stocks are down 15 percent or not, you need a somewhat different investment philosophy,” he said. “The world is not going to adapt to you. You’re going to have to adapt to the world.”
He reminded attendees that Berkshire Hathaway’s stock has dropped by 50 percent three times in its history, and each time, the fundamentals of the company remained sound.
“People have emotions,” he said. “But you got to check them at the door when you invest.”
The massive cash pile—larger than the GDP of many countries—reflects not just Buffett’s trademark caution but also the challenge of finding investment opportunities in an uncertain economic environment.
Markets have shown signs of stabilizing. The S&P 500 capped its longest winning streak since 2004 last week, and the Dow Jones Industrial Average rose more than 560 points on Friday.
In its quarterly filing, Berkshire warned that “considerable uncertainty remains” due to “ongoing macroeconomic and geopolitical events,” including tariffs, supply chain inefficiencies, and fluctuating customer demand. “It is reasonably possible there could be adverse consequences on most, if not all, of our operating businesses,” the company noted.
Beyond markets, the 94-year-old Buffett also revealed that he plans to retire at the end of the year.
“I think the time has arrived where Greg should become the Chief Executive Officer of the company at year end,” Buffett said, referring to Berkshire vice-chairman Greg Abel. Four years ago, Buffett picked Abel to be his successor at the helm of Berkshire, but prior to Saturday’s announcement, he gave no indication when he would retire.
Buffett also weighed in on broader policy issues, particularly trade and energy.
“Balanced trade is good for the world,” he said. “In the United States, we should be looking to trade with the rest of the world. We want a prosperous world.”
He also noted that America’s fragmented energy infrastructure poses challenges and called for smart policies.
“It is important that the United States have an intelligent energy policy, just as it was important during World War II that we learned how to make ships instead of cars extremely fast,” he said. “And we figured out the answer. We combined private enterprise with ... the power of ... government,” he said.
