On February 24, 2020, Warren Buffett spoke on CNBC’s “Squawk Box” as the stock market indicated a significant drop of nearly 800 points prompted by concerns over the coronavirus pandemic. Despite the widespread anxiety in the market, Buffett expressed a positive viewpoint about the decline, indicating that it presented buying opportunities for investors.
“As a net buyer of stocks over time, I actually welcome lower prices,” Buffett stated. He compared investing in stocks to buying food, emphasizing the advantage of purchasing necessities at reduced costs. He urged viewers to consider themselves as business owners rather than merely stockholders, clarifying that the long-term outlook for American businesses remains unchanged despite daily news fluctuations.
Buffett acknowledged that many investors might worry about timing the market to snag lower prices in the wake of uncertainties, but advised against trying to predict short-term movements. “You can’t predict the market by reading the daily newspaper,” he noted. His perspective is rooted in the belief that ownership of equities should be viewed through a long-term lens, likening the investment strategy to acquiring a business that one intends to hold for decades.
When discussing the potential market reactions to ongoing crises, Buffett maintained that the economic fundamentals would eventually drive recovery. “If you’re buying a business, you’re going to own it for 10, 20, or 30 years,” he remarked, reinforcing that temporary downturns should not overshadow the underlying value of American enterprises.
Buffett’s remarks highlight the philosophy of long-term investing, where current market drops can be seen as advantageous opportunities rather than causes for panic. This hopeful perspective encourages investors to focus on the enduring value of their investments, suggesting that a commitment to long-term strategies can yield positive results even amid short-term volatility.