Warren Buffett is on a spending spree putting US$41 billion to work this quarter

Warren Buffett is on a spending spree putting US$41 billion to work this quarter
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Over the past few years, Warren Buffett, the founder of investment giant Berkshire Hathaway, has been somewhat complaining about not being able to find companies to put their money into for good use; the reason being that there’s more competition from buyers like private equity firms and because of the high valuations of companies. In fact, he said that the market had turned into a “gambling parlor.”

But it seems as if he’s back, making around US$41 billion of net stock purchases in the first quarter of this year. This spending spree sparked a lot of questions at the in-person shareholder meeting on Saturday. This is the most purchases of common stock for the firm according to data going back to 2008, including expanding his stake in companies like Activision Blizzard. He also commented on a range of things, saying that inflation “swindles” everybody, calling Fed Chair Jerome Powell a “hero” and casting skepticism on Bitcoin. Vice-Chairman Charlie Munger also said he’s willing to bet on China, even though it’s riskier, for a higher return and blasted trading app Robinhood.

Key comments:

“It’s so easy to overdo a good idea. … Look what happened to Robinhood from its peak to its trough. Wasn’t that pretty obvious that something like that was going to happen?” said Munger.

About Bitcoin: “Whether it goes up or down in the next year, or five or 10 years, I don’t know. But the one thing I’m pretty sure of is that it doesn’t produce anything,” said Buffett. “It’s got a magic to it and people have attached magics to lots of things. Assets, to have value, have to deliver something to somebody. And there’s only one currency that’s accepted. You can come up with all kinds of things. We can put up Berkshire coins, put up Berkshire money but in the end, this is money,” he said, holding up a $20 bill. “And there’s no reason in the world why the United States government … is going to let Berkshire money replace theirs.”

About US inflation: “You print loads of money, and money is going to be worth less,” Buffett said. “In my book, Jay Powell is a hero. It’s very simple. He did what he had to do.”

About China: “The reason that I invested in China is I get so much better companies at so much lower prices,” said Munger. “And I’m willing to take a little bit more risk to get into the better companies with the lower prices. Other people might reach the opposite conclusion, and everybody is more worried about China now than they were 50 years ago. There’s no question about the fact that the government of China has worried the investors from the United States. There are more difficulties … dealing with the regime in China than there are the United States. And it’s different, it’s a long way away and they’ve got in their own culture in their own loyalty.”

Read Berkshire Hathaway’s first-quarter earnings report here.