“We faced great problems in the past,” Buffett said Saturday at Berkshire Hathaway’s annual shareholder meeting. “We haven’t faced this exact problem, we haven’t faced anything that quite resembles this problem. But we faced tougher problems, and the American miracle, the American magic has always prevailed and it will do so again.”
Buffett’s remarks marked his first address to shareholders since much of the nation went on lockdown beginning in mid-March. In the weeks since, the U.S. economy tumbled into a downturn as businesses across the nation went on lockdown, leading to the deepest economic contraction since 2008 in the first quarter and a historic surge in new unemployment claims.
Buffett did kick off his comments with an acknowledgement that the coronavirus pandemic has stirred up a major economic disruption, with the exact contours of this crisis unlike any other seen before.
“When we started on this journey which we didn’t ask for, it seemed to me there was an extraordinary, wide variety of possibilities on both the health side and on the economic side,” Buffett said. “I mean it was Defcon 5 on one side and Defcon 1 on the other side, and nobody really knows, of course, all the possibilities that there are and they don’t know the probability factor to stick on them.”
On the health side, at least, Buffett noted that it now seems that the best- and worst-case scenarios have been eliminated, after sweeping social distancing measures were put in place.
“I would say the range of probabilities, or possibilities on the economic side are still extraordinarily wide,” he added. “We do not know exactly what happens when you voluntarily shut down a substantial portion of your society.”
“In 2008 and 2009, our economic train went off the tracks. And there were some reasons why the roadbed was weak, in terms of the banks and all that,” he added. “This time we just pulled the train off the tracks and put it on a siding. And I don’t know of any parallel in terms of a very, very important, well the most important, country in the world – most productive, huge population – in effect, sidelining its economy and its workforce and obviously and unavoidably creating a huge amount of anxiety and changing people’s psyche.”
“This is quite an experiment and we may know the answer to most of the questions reasonably soon but we may not know the answers to some very important questions for many years. It still has an enormous range of possibilities,” Buffett said.
The annual shareholder meeting – often called the “Woodstock of Capitalism” with thousands of investors venturing to Nebraska to hear directly from the Oracle of Omaha – was itself disrupted this year by the coronavirus pandemic, and was broadcast solely through livestream with no physical attendees.
‘You’d pick today’
Still, Buffett said he remains convinced “that nothing could basically stop America,” just as he had during World War II, the Cuban Missile Crisis, the events of September 11, 2001 and the global financial crisis.
Buffett has been a longtime voice of optimism on the U.S. economy and business innovation, often touting his enduring confidence in the “American tailwind.” His adage that “America’s best days lie ahead” appeared in each of his 2014, 2013, 2011, 2010 and 2008 letters to shareholders, with the assured maxim coming as a slice of hope through the market crises, political turmoil and economic downturns that punctuated years past.
Other words of patriotic optimism permeated each of his annual messages to investors. In his 2013 letter, he declared the “mother lode of opportunity resides in America,” and in 2016 boiled down his view to “one word” to “sum up our country’s achievements: miraculous.”
Buffett restated similar views in the opening remarks at his shareholder meeting Saturday.
“If you were to pick one time to be born and one place to be born and you didn’t know what your sex was going to be, you didn’t know what your intelligence would be, you didn’t know what your special talents or special deficiencies would be ... if you could do that one time, you would not pick 1720, you would not pick 1820, you would not pick 1920,” Buffett said. “You’d pick today. And you would pick America.”
“And of course the interesting thing about it is, ever since America was organized in 1789 and George Washington took the oath of office, people have wanted to come here,” he added. “Can you imagine that?”