Buffett’s followers around the world may expect the Saint of Omaha to reiterate his long-held belief in the US economy in his address.
Marketmen expect Buffett to talk about US President Joe Biden’s proposals to boost infrastructure. Buffett has long said that the wealthy in the US are under-taxed and, thus, may also talk about the proposed taxes on the rich by the Biden administration.
Besides, the legendary investor is likely to field questions on GameStop frenzy and drama around Robinhood Markets Inc in the US and on cryptocurrencies. He may address issues like high valuations in US stock markets, and may cite limited investment opportunities in the light of Berkshire Hathaway’s $138 billion cash pile. Some words on global liquidity are also likely.
Buffett in his last year’s annual letter, released in February 2021, said bonds are not the place to be in these days. Buffett wrote that fixed-income investors worldwide face a bleak future. That said, he did not write about what should be done with the money that either Berkshire Hathaway has or other investors may have in the absence of bonds. He may address that part on Saturday.
“Post the rally in US stocks, Buffett may want to highlight that equity as the asset class may be the best asset class in the long term and may suggest that one’s ability to handle volatility is an important aspect of investing,” said Gaurav Sud, Managing Partner at Kanav Capital Advisors.
In his annual letter to shareholders, Buffett reiterated his long held belief that one should never bet against the USA. He said in “its brief 232 years of existence, there has been no incubator for unleashing human potential like America.”
In his 55th AGM last year as well, Buffett talked at length and cited many historical examples from the US civil war to the Great Depression to illustrate America’s ability to withstand adversity. “Nothing can stop America when you get right down to it. Never bet against America,” he said last year.
That belief could be reiterated.
Sud, who is an IITian-turned-value investor, said Buffett seems to support Biden policies and has always been in favour of higher taxes on the rich.
He expects Buffett to talk about how investments in infrastructure can derive demand for commodities and other aspects.
“Buffett typically invests in non-technology stocks. And so, he may try to highlight opportunities in non-tech space. On the cash pile, he might show his willingness to buy businesses, but only at a price he deems comfortable. Meanwhile, while Buffett speaks against bonds, he also highlights the liquidity aspect of treasury or cash provides. On Saturday, he may cite the importance of keeping some cash,” Sud said.
The annual event, also known largely as “Woodstock for Capitalists,” will see Vice Chairman Charlie Munger sharing the stage with Buffett to answer three-and-a half hours of shareholder questions.
Munger, a Californian, missed out the 2020 meeting held in Omaha, Nebraska, last year, due to pandemic.