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Warren Buffett told investors to stay calm during times of extreme market panic, and now, in the middle of one of the most chaotic periods in recent memory, his words are being tested again. The advice first came during Berkshire Hathaway’s annual meeting back in 1997, when he brought up the meltdown of 1974, a year that saw the Dow Jones Industrial Average collapse by 52% from its 1972 high. That market crash came during a storm of rising inflation, a global oil crisis, and political chaos fueled by the Watergate scandal. “The country didn’t disappear or anything,” Warren said at the time. “It’s just people behave in extreme ways in markets. And over time, that’s very good for people that keep their heads.” Earlier this month, the S&P 500 briefly dropped over 20% from its February high, slipping into bear market territory before managing a slight bounce. The Dow dropped 1,500 points two days in a row, something that hasn’t happened since the index was first created in 1896. Those dips didn’t spook Warren. The 94-year-old investor is almost certainly watching the downturn as a shopping opportunity. His company, Berkshire Hathaway, is sitting on $334 billion in cash as of the end of 2024 — the most it has ever held — which now makes up 30% of total assets. With two weeks to go before his company’s next big shareholder meeting, many expect Warren to show where he might spend some of that pile. Warren holds cash while others sell under pressure Warren treats stocks like ownership in full businesses, not just numbers on a screen. “The stock market is there to serve you, and not to instruct you. And that’s a key to owning a good business, and getting rid of the risk that would otherwise exist…

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Filed under: News - @ April 20, 2025 5:19 pm