In 1986, Warren Buffet wrote the letter to the Berkshire Hathaway shareholders. Legendary investor briefed about 2 contiguous viruses in those letters.
Since COVID19 has taken over the world and created chaos everywhere. At the time, the philanthropist banker predicted two super contagious diseases which will be at play on Dalal Street.
“The time these epidemic will occur is not predictable at all. In contrast where the market will lead will be equally uncertain. Considered in terms of both duration and degree.” Buffet quotes in 1987 letter.
The 89 year old Warren Buffet pretty surely didn’t predict the outbreak of COVID19. The diseases he mentioned in the note to the shareholders are still alive among current investors. He identified it as “fear” and greed”.
Cases of COVID19 globally crossed the mark of 3 million globally. While out of this the United States has one million of them, the native land of Buffet is from.
However, India also experiences a rise in a number of cases but at a moderate pace. Regardless of the early initiatives taken by the government, we cannot rule the chances that the situation can get out of hands. In a populous country like India, it will be a walkover. On another hand, the stock market is rallying, as greed is playing its role.
Today, BSE Sensex gained 606 points in day trading. Surprisingly, Nifty crossed the mark of 9,500 points the first time after March 16. Despite this, it was the third green day in a row.
The pandemic has created havoc in the commodity and share market. The crude oil fell below zero on April 22 on the future contract of West Texas crude. Whereas India indices saw a plunge of 39 percent in two months. A fall from January peak of 42,273 to 25,638. The reason behind this was the another disease that hit the traders, “fear“.
The letter Warren Buffet wrote three decades back noted saying I would never try to anticipate the occurrence or departure of either of the disease.
He told his goal is rather a prudent one. One of the famous Warren Buffet quotes,
Even the Asia richest person agrees with this. “Totally agree” says Ambani. “If an investor is having buffer cash after putting aside the emergency cash, he should go hunting after stocks and invest”.
However, he tells to go for staggering buying. “During the coming weeks, if the Indian indices retest itself and hit the bottom, it won’t take time to recover soon. But trying to catch the bottom when volumes are generally low can be risky. History is been evident, you are buying early during the crisis in the market, in the time of 3-4years you are going to earn disproportionate returns”. he said.
“At this time plenty of people get greedy” said Dhirendra Kumar CEO at Value Research.
Recently in an interview, Buffet mentioned “It’s scary stuff when you have a pandemic.”
Warren Buffet cancelled Annual Meet
The annual general meeting set to take place on May 2, won’t be as usual. The event which attracts the stock market enthusiasts from all around the world won’t have the usual large gathering at the Woodstock for Capitalists, which sees the biggest congregation of stock market enthusiasts from all over the world.
In decades first time the annual grand event of Berkshire Hathaway is going to be limited to Warren Buffet, investing legend Charlie Munger and few other Berkshire employees.
Every year the event attracts the gathering of 40,000. The conference which takes place in Omaha, Nebraska is going to turn quitter affair due to the outbreak of coronavirus.
However, the billionaire with the net worth of 7,350 crores USD said: “what you do in stocks shouldn’t be affected due to tot he pandemic”.