As Warren Buffett appeared live on CNBC’s “Squawk Box” on Monday, February 24, 2020, futures were pointing to a 3% decline for the stock market when it opened due to fears of a coronavirus pandemic.
Buffett, however, wasn’t worried. He was actually happy that stock prices were falling.
BECKY FAST: Let’s talk about the fact that the market is down almost 800 points this morning.
WARREN BUFFETT: Yeah.
BECKY FAST: A concern for you?
WARREN BUFFETT: Well no, it’s good for us actually.
I mean we’re a net buyer of stocks over time. And just like if I were a net buyer of food, I expect to buy food for the rest of my life, and I hope the price of food drops tomorrow.
So when stocks are down, no, we’re going to buy, overall. And who wouldn’t rather buy, you know, at a lower price rather than a higher price?
People are really strange about this. I mean they — most people, most of your listeners are savers and that means they will be net buyers and they should want the stock market to go down. They should want to buy at a lower price.
But they feel that they feel better when stocks go up.
2) 6:03 a.m. ET
BECKY FAST: When you look at futures down about 818 points this morning, I think the first thing viewers probably want to hear from you is your thoughts on what’s happening with the coronavirus, whether it’s a reason to panic, and whether you’re concerned about it?
WARREN BUFFETT: Well, I don’t know, I have some special thoughts beyond the coronavirus news…
If you buy a business, and that’s what stocks are, businesses — actually, people will feel better if they say I bought a business today and not stocks today, because that gives a different perspective on it — then probably if you buy a farm, if you buy a building, if you buy a business, you’ll own it for 10, 20, 30 years.
And the real question is: Has the 10- or 20-year outlook for corporate America changed in the last 24 or 48 hours?
And we’ll — you’ll notice many of the companies that we own — partially own — American Express, we’ve owned it for 20 years; We’ve owned Coca-Cola for 40 years – but these are our businesses. And you don’t buy or sell your business based on today’s headlines.
3) 6:05 a.m. ET
BECKY FAST: But if I think I can buy something for potentially 10% less, maybe more than that, if I wait a week or a month, maybe that’s what I’m waiting for.
WARREN BUFFETT: Well, if you think you have – you’re going to become fabulously rich if you’re right (LAUGHTER). All you need to do is keep buying at 10 day intervals and keep making your 10 day prediction.
If I knew what the market was going to do, obviously…
But that’s not the case – I don’t think anyone knows what the market is going to do.
I think you know if you’re making a smart purchase at a given price.
4) 6:07 a.m. ET
WARREN BUFFETT: You certainly can’t predict the market by reading the daily newspaper, that’s for sure.
And you really can’t – you certainly can’t predict the market by listening to me.
5) 6:46 a.m. ET
BECKY FAST: For people who are just waking up, they’re tuning in and want to know what do you think about this massive sell-off this morning – seeing the Dow down 700, 800 points in the morning – what’s your reaction when you see something like that?
WARREN BUFFETT: Well, my reaction is I like to buy stocks. So, I don’t wish harm on anyone, but I like that: if they want to sell them to me cheaper, I prefer that. (LAUGHTER)
So if it’s about a 3% drop, I don’t know how many 3% drops I’ve had in my lifetime, but there have been a lot.
And I can’t think of one that you shouldn’t have bought, you know, basically.
This doesn’t mean stocks will go up or down next week, next month, or next year.
But if anything, if you like owning American companies, you have the opportunity to buy at 3% less.
BECKY FAST: Does this mean Berkshire will buy shares today?
WARREN BUFFETT: It’s… well, we certainly won’t sell. And yes, we could – we could easily buy something, of course.
6) 8:02 a.m. ET
BECKY FAST: Warren, we talked this morning about the coronavirus, but there are people waking up across the country now, who are sort of tuning in at this hour, so maybe we should bring that up again.
With markets down 750 points…how can anyone wake up, read this and think about it?
WARREN BUFFETT: I don’t think so — it makes no difference to our investments. I mean, there will always be news, good or bad, every day.
In fact, if you read all the newspapers from the last 50 years, most of them – the headlines – probably tend to be bad.
But if you look at what’s happening to the economy, most of the things that are happening are extremely good. I mean, it’s amazing what’s going to happen over time.
So if someone came to me and told me that the global growth rate was going to decline by 1% instead of a tenth of a percent, I would still buy shares if I felt like the company and if I liked the price at — and I like the price today better than I liked it last Friday.
7) 8:59 a.m. ET
BECKY FAST: Before we let you go, let’s come back to the futures contracts again this morning, because right now the Dow Jones is expected to open down about a hundred, or 830 points. Weakness again on concerns about coronavirus and what it means.
What is your mindset today when you look at the stock market and decide what you are going to do?
WARREN BUFFETT: We buy companies to keep them for 20 or 30 years. We buy them in full, we buy them in part. We call them shares when we buy them in part.
And we think the 20- and 30-year outlook hasn’t changed because of the coronavirus.
