When the coronavirus pandemic hit the U.S. economy last year, causing stock prices to plunge and a massive government rescue package to be approved, Warren Buffett was sidelined. But as war broke out in Europe and inflation soared, Buffett was doubling down on a tried-and-trusted strategy to navigate the fallout.
The billionaire investor went on his biggest stock-buying spree for at least a decade, undeterred by the geopolitical turmoil and fears of runaway inflation. He and his deputies dug deeper into the U.S. stock market and expanded the conglomerate’s stakes in Chevron Corp. and Activision Blizzard Inc., even as Buffett noted the “extraordinary” price increases in Berkshire’s businesses.
Buffett, who held court in Omaha, Nebraska, on Saturday at Berkshire’s annual shareholder meeting, had faced questions about why he didn’t take advantage of the downturn when the pandemic took hold. Now, as war and inflation fuel market volatility prompting the S&P 500 Index’s worst quarter in two years, he’s ramped up amid the uncertainty, making $41 billion in net stock purchases in the first quarter.
Not all bets are lucky bets, but someone has to take them to keep the system going. Buffett lives in that world of “normal” people who bet on businesses instead of betting on stocks. He believes his bets will pan out and they have. His long-term success is a testimony to a life tried and tested in the crucible of business.