Warren Buffett at the Berkshire Hathaway Annual Meeting in Los Angeles, California May 1, 2021.
Gerard Miller | CNBC
Legendary investor Warren Buffett said the economic impact of the pandemic was disproportionately declining on small businesses. and the unpredictability of COVID-19 still far from the end
“The economic impact is so unequal that … hundreds of thousands or millions of small businesses have been seriously hurt. but big companies Most have done overwhelmingly well,”; Berkshire Hathaway’s CEO said during an interview with Becky Quick on CNBC’s “Buffett & Munger: A Wealth of Wisdom” special that aired on Tuesday.
In March 2020, a pandemic has devastated the entire America. This led to the full shutdown of the $20 trillion economy. Thousands of small businesses have been forced to shut down. while large retailers and e-commerce giants take on those customers. Gross domestic product for the first quarter of last year fell 31.4%, unprecedented in America after the Great Depression.
“It’s not over yet,” said the 90-year-old investor. “I mean, in terms of unpredictability… it’s very unpredictable. But it works better than most people expect for most people and most businesses. and it was only their own fault. It destroys all kinds of people. and their hopes.”
Covid makes ‘great success’
Charlie Munger, vice president of Berkshire and Buffett’s long-standing business partner for certain businesses such as car dealerships. The pandemic also brought profits.
“It doesn’t just create a return to normalcy. But it produced a great success they didn’t expect,” Munger said. “Car dealers are making money they never had. except for the pandemic.”
Due to factory closures and global semiconductor shortages Automakers and dealerships therefore experience wider profits, if not saving or even selling cars before they arrive at dealerships.
Berkshire Hathaway Automotive is one of the largest dealers in America. With more than 78 independent dealers, the group also owns BNSF Railway and NetJets, a privately held jet charter and aircraft management company.
“All dealers we have partners in each dealer. They sincerely felt that they would be in big trouble in March and April,” Buffett said. “Some people may want to go in for help from the government. But we won’t let them. Because they have wealthy parents … We don’t know what will happen to NetJets in terms of demand.”
the biggest lesson
Buffett said the biggest lesson he learned from the unprecedented pandemic was that the world was not prepared for an emergency.
“I’ve learned that people don’t know as much as they think. But the biggest thing you learn is that the pandemic has to happen. And this is not the worst thing imaginable,” Buffett said. “Society has a bad time preparing for things that are far away. But it is possible and will happen sooner or later.”
More than 600,000 people have died from COVID-19. in the United States and various countries It is battling the new strain amid the launch of the Delta variant vaccine, which is now in at least 92 countries, including the United States. It is expected to become an important variable of disease worldwide. in the United States The prevalence of stress doubles every two weeks.
“There will be another pandemic, we know there is, we know there are nuclear, chemical, biological and now cyber threats. Each has a very bad possibility,” Buffett said. “And we do some things about it, but … it’s not something society seems particularly capable of fully coping with.”
This year’s growing number of cyber attacks has directly affected Americans and disrupted shipping and services in the United States. in May Ransomware Attacks Colonial Pipeline, Forces U.S. Company to Close About 5,500 Miles of Pipeline
“Charlie and I are unfairly lucky in many ways, but the luckiest thing is to be in this time and place,” Buffett said. “How can we really do this to give humanity 50 and 100 and 200 years from now an incredible better life that can be enjoyed without making mistakes?”
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