Warren Buffett Urges Keeping Politics Out Of Investing: ‘I Don’t Believe In Imposing My Views on 370,000 Employees And A Million Shareholders. I’m Not Their Nanny.’
With a massive net worth of $114 billion and a reputation as one of the greatest investors in history, Warren Buffett’s words carry immense weight in the financial world. At the age of 92, Buffett’s wealth of experience makes him a trusted source of advice for many. One particular piece of timeless wisdom he shared years ago resonates strongly today: Politics has no place in the realm of investing.
During a 2019 conversation with CNBC’s Becky Quick, Buffett, chairman of Berkshire Hathaway Inc., shared valuable insights regarding the relationship between investing and politics. Highlighting his own extensive investment experience spanning multiple presidencies, Buffett emphasized the importance of maintaining a nonpolitical approach when it comes to making investment decisions.
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With an impressive track record of successfully investing under various administrations, Buffett urged investors not to let political views unduly influence their investment strategies. Drawing from personal anecdotes, he mentioned that even during the 1930s, his father held concerns about the emergence of communism. All his life, he has heard half the country say if the other side wins, “things are going to go to hell.”
This is an idea shared by many of today’s investing magnates. For example, Kevin O’Leary shared similar views following the recent controversies surrounding companies like Anheuser-Busch and Target Corp. This approach ultimately has shown remarkable success in the famous Shark’s portfolio. Along with several multi-million dollar exits, Kevin O’Leary’s recent stake in popular retail startup investing platform StartEngine has grown to a value of over $50 million. The company has also raised over $16 million from retail investors in its current equity crowdfunding raise.
When companies choose a side, it often alienates as much as 50%, or more, of their customer base and could cost these companies billions of dollars. This can result in missed opportunities for companies and a smaller potential customer base.
Buffett’s Success
Despite these apprehensions, Buffett has consistently navigated the investment landscape and achieved remarkable success, having invested under 14 out of the 15 presidents he has lived through. His investment prowess has remained consistent, with seven of those presidents being Democrats and the others being Republicans.
Buffett stressed the need for investors to resist the temptation of allowing personal political views to influence their investment strategies. While individuals often manage to keep religion separate from their investment decisions, Buffett acknowledged that politics tends to evoke stronger emotional responses that can cloud rational judgment. He firmly advocates for a nonpolitical stance, urging investors to base their decisions on objective analysis and sound investment principles.
Buffett’s emphasis on maintaining a separation between personal beliefs and investment choices was further exemplified during Berkshire Hathaway’s 2018 annual shareholder meeting.
When questioned about doing business with gun owners, Buffett responded, “I don’t think that Berkshire should say we’re not going to do business with people who own guns. I think that would be ridiculous.” He emphasized that he did not wish to impose his personal views on the operations of its various businesses.
To illustrate his point, Buffett presented a hypothetical scenario involving Geico, one of Berkshire Hathaway’s subsidiaries. He highlighted the impracticality and unnecessary nature of including a question on the Geico policy form that would discriminate against National Rifle Association (NRA) members. The shareholders in attendance responded with resounding applause, appreciating Buffett’s commitment to maintaining a separation between personal beliefs and corporate decisions.
Despite Buffett’s personal involvement as a board member of Everytown for Gun Safety, an organization advocating for “common-sense reforms” to reduce gun violence, he made it clear that his participation and political contributions are as a private citizen and not on behalf of Berkshire Hathaway.
One shareholder sought clarification on whether Buffett misspoke when he had asserted that Berkshire Hathaway should not shy away from conducting business with gun owners, considering his involvement with gun safety.
Buffett stood by his previous remarks, reiterating his belief that he should not act as a “nanny” dictating the personal choices of the 370,000 employees and 1 million shareholders under the Berkshire Hathaway umbrella.
“When I do that, I’m speaking as a private citizen. I don’t think I’m speaking for Berkshire,” Buffett said. He further clarified that Berkshire Hattaway had never made a political contribution.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
