TOPLINE
Billionaire investor Warren Buffett, speaking at Berkshire Hathaway’s first-ever virtual shareholders meeting on Saturday, said that he is optimistic that the U.S. economy can bounce back and overcome coronavirus.
“Nothing can basically stop America,” the Oracle of Omaha said.
Nati Harnik/ASSOCIATED PRESS
KEY FACTS
While Buffett admitted that “we haven’t faced anything that quite resembles this problem” before, he said that the United States has “faced tougher problems” and overcome them in the past.
“I remain convinced… nothing can basically stop America,” he said. “The American miracle, the American magic has always prevailed and it will do so again.”
Buffett acknowledged that the virus is “still hard to evaluate” and “we’re learning as we go along,” though he says that he does take solace in the fact that it is “not as lethal as it may have been.”
While he is optimistic about America’s economic future, Buffett said that the fallout from coronavirus is still unclear—and hard to compare to past crises: “In 2008-2009, our economic train went off the tracks,” he described. “This time, we just pulled the train off the tracks and put it on a siding.”
The Oracle of Omaha took a big-picture view to demonstrate his optimism about the economy: The United States today is “an incredibly more wealthy country than we were in 1789.”
He calculated that the net worth of the United States in 1789 amounted to around $1 billion, while the wealth of the country today is well over $100 trillion: “That’s mind blowing,” he said.
CRUCIAL QUOTE
“In the end, the answer is: Never bet against America,” Buffett said.
Big number: $49.75 billion
That’s how much Buffett’s investing conglomerate, Berkshire Hathaway BRK.B , lost in the first quarter. The company reported a massive net loss of nearly $50 billion, as the coronavirus-driven market sell-off took a significant toll on the company’s stock holdings.
Key background
U.S. economic activity plunged during the first quarter, with GDP contracting by 4.8%—the biggest downturn since the 2008 financial crisis. The benchmark S&P 500 index had fallen over 30% by late March, before recouping some of those losses in April: It’s now down 13% so far in 2020. What’s more, with corporate earnings season well underway, many companies are also disclosing the damage the virus has done; Even some of the biggest companies in the world, such as Apple AAPL and Amazon AMZN , have felt the impact.