On the Federal Reserve’s moves to keep lending flowing by pushing rates low:
Buffett said that he backs the Fed’s chairman, Ben Bernanke, and notes that the policy hasn’t led to inflation. But still, interest rates will rise, and it
will be a “shot heard around the world.”
On the trillions of dollars in debt in the past few years:
Buffett said he was glad the response to the economic downturn hasn’t been
austerity, which would have hindered any sort of recovery. Munger, who’s
more conservative than his friend, agreed. Buffett did praise the prior
president, pointing out in particular 10 words of wisdom from the financial
crisis: “if money doesn’t loosen up, this sucker could go down.” While the national debt remains
troublingly high, Buffett said, “this isn’t the country’s toughest hour by
a large margin.”
On beating an index fund by buying shares in the 20 best
companies in the United States:
Buffett said the results would probably be
similar, then launched into a bigger point that there are professional
investors, and then there are amateurs who invest. Being the former requires a
lot of work and research, which many, many amateurs don’t have the time or
inclination to do. The main problem for
most people, he said, is “trying to behave like a professional when you aren’t
spending the time in the game needed to be a professional.”
On climate change:
Buffett believes that climate change is
real, and he said that it’s a difficult thing for Berkshire’s insurance operations
to account for. Munger then added
that what actually seemed to work was the high taxes that European governments
have levied on motor fuel. “I think
they’ve stumbled into the right policy,” he said. “I think the United States
should have way higher taxes on motor fuel.”
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