How to view the recent turbulence in the US stock market? Buffett: It's nothing at all, it's part of investing
Buffett downplayed the recent market volatility, casually stating that it "doesn't matter at all." He indicated that the recent performance of the U.S. stock market should not be described as a significant fluctuation. This is not a dramatic bear market or a similar situation
At Berkshire Hathaway's annual shareholder meeting on Saturday, Buffett downplayed the recent market volatility, casually stating that it "doesn't matter at all," indicating that it is part of investing:
What has happened in the past 30 days and 45 days is simply nothing.
Buffett pointed out that over the past 60 years, Berkshire's stock price has fallen by 50% three times. He emphasized that during those periods, the company itself did not face any fundamental issues:
I would not feel fear because of what others are afraid of on a financial level. If Berkshire were to drop 50% next week, I would see that as a fantastic opportunity and would not be bothered by it at all.
Therefore, he stated that the recent performance of the U.S. stock market should not be described as a huge fluctuation. This is not a dramatic bear market or anything like that.
Buffett's comments on the U.S. stock market come as investors are grappling with the market's violent swings triggered by President Trump's controversial tariff policy announced in early April, leaving investors uncertain about the market's direction thereafter.
Just last Friday, the S&P 500 recorded its longest winning streak since 2004, as Wall Street was recovering from the losses caused by the initial announcement of Trump's tariff policy. In April, U.S. stocks briefly entered a bear market, defined as a drop of over 20% from recent highs, but then rebounded significantly.
Buffett stated that the circumstances of other periods are "completely different" from what current investors are facing. He reminded investors that the stock market has generally risen throughout his 94 years of life, while also advising investors to be prepared for turbulent markets.
He shared that the Dow Jones Industrial Average was at 240 points on his birthday, August 30, 1930, and later fell to as low as 41 points. Despite going through many maddening events in between, as of Friday, the Dow had closed above 41,300 points.
Buffett said, "If you care whether your stock has dropped 15%, then you need to have a different investment philosophy. The world will not change for you; you have to adapt to this world. People are emotional. But in investing, you must leave emotions at the door."
