A big pickup in market volatility has some high-profile investors rattled, but don’t count Warren Buffett among them.
The billionaire chairman and chief executive of Berkshire Hathaway Inc. BRK.A, +2.09% BRK.B, +2.51% acknowledged in an interview with CNBC that price action has become more frenetic recently, but said it “doesn’t really make any difference to us.”
Earlier Monday, hedge-fund manager Leon Cooperman, chairman and CEO of Omega Advisors, lamented, on the same network, that computer-driven quantitative trading strategies were increasing volatility and scaring away retail investors. Cooperman said market fundamentals had been turned upside down.
“In the world I grew up in, and the world Warren Buffett grew up in, when something went down you wanted to own more,” Cooperman said. In the current market environment, if a stock “goes up, you want to own more and it goes down you want to own less...It lacks common sense.”
Buffett shrugged off volatility worries, driven by computers or otherwise, saying he welcomed down days as opportunities to get even bigger discounts on stocks he likes.
“Sometimes [markets] get very volatile like this and other times they put you to sleep, but the important thing is where they’re going to be in 5 to 10 years, and I’m confident they’ll be significantly higher in 10 years,” he said. The Fed
Buffett said he had long assumed the central bank would take a slow approach to raising rates, particularly with the European Central Bank in easing mode. If U.S. rates climb far above European rates, it would likely have a negative impact on U.S. exporters, Buffett said. At the same time, Buffett said he’s never made an investment decision based on what he thought the Fed was likely to do.
Buffett said the economy continues to chug along at 2% to 2.5% annual growth rate—”not a bad rate, but it’s not a booming rate, either.”
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