Warren Buffett on 1999 vs. 2024: Are We in a Bubble? | Berkshire 2024

[Transcript]

BECKY QUICK: Alright, Warren, earlier you talked about selling some of the Apple shares in order to build up your cash supply. And I think it’s had a lot of people wondering where you see opportunities or what might be coming or market valuations.

So I’ll ask this question from Foster Taylor. At the 1999 annual meeting, you mentioned that if you owned all of America’s 500 businesses, you would be making $334 billion while paying $10.5 trillion. You emphasize that this was not a good return on investment.

Today, by my math, the S&P 500 has a market capitalization of around $44 trillion, with profits of around $1.45 trillion. This is a very similar return on investment to the 1999 levels. Do you see similarities in the market today and the 1999 levels?

WARREN BUFFETT: Well, one thing has changed dramatically from. Well, from 1990. I misunderstood on the 1999, but there have been times in my life that I’ve been awash in so many opportunities that I could have invested everything by nightfall.

And then there’s other times when the year goes, well, not in the early days, but now we just — we haven’t seen anything that makes sense that that moves the needle.

Now, we’ve made small acquisitions during the year. Our companies have made acquisitions. And we. You know, Greg and I may talk about something that involves a $300 million purchase or something like that. And, you know, if it fits well enough, we do it.

And if our managers see things that fit them, we want to look at them, because our managers do not have necessarily the same equations in mind that we do. But there’s some managers which we would have just say, you know, whatever you decide to do.

And then there’s other managers that would not know how to allocate capital, particularly, and that they don’t have to be able to be great capital allocators. If they happen to be great at serving customers and understand their own industry and all of that, you know they can be great managers.

A good many of them are capital allocators and others aren't. But this is not a time when the phone is going to be ringing often. But there are times from that, and Greg will know how to handle them as well or better than I have over time.

And, Charlie and I would, you know, we missed a lot of things, and what we really regretted was missing something that turned out to be very big. We never worried about missing something that we didn’t understand.

I mean why should we be able to, you know, predict the future of every business any more than we can predict, you know, what wheat yields are likely to be in Illinois next year? Well, not wheat in Illinois, wheat in Kansas, but corn in Illinois.

So I don’t really think of whether it’s similar to 1999 because I’m not that good on chronology anyway. Unless something really dramatic happened at the time.

I mean, I remember things from 2008 and ‘9 much better. I remember whether something happened in 2015 or 1987 or — well, 1987 I remember because of October 19. But I just don’t think that way. I just look at what I can do every day.

Greg?

GREG ABEL: I’m gonna have to use it. Nothing. Sorry. Nothing to add.

WARREN BUFFETT: Okay, well, we’ll go to station two. (Laughter & Applause)

I mean, (Applause) it’s nice to know what lines you can get an applause for. (Laughter)

 

Source: https://buffett.cnbc.com/2024-berkshire-hathaway-annual-meeting/

 

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