Buffett, who addressed shareholders of Berkshire Hathaway at the annual meeting, said his advice to the first-time investors who make 30 trades a day would be to realise that the world can change in very dramatic ways.
“None of the top 20 highest valued companies from 1989 are in the same list 30 years later. It is a reminder of what extraordinary things can happen,” the legendary investor said.
The billionaire investor is famous for being one of the most successful investors in history and for his value investing style. Buffett said before investors become too sure of themselves, it is important to realise that “there is a lot more to stock picking than to work out which is going to be the most wonderful industry in the future.”
“Best ideas in 1989 did not necessarily do well, although equities overall was the place to be,” Buffett said.
The nonagenarian investor highlighted that there has been a great increase in the number of investors with a strong gambling impulse over the last year, likely pointing toward the hordes of first-time investors who have joined the stock market through apps like Robinhood.
“It creates its own reality for a while, but nobody tells you when the clock strikes 12,” Buffett said.
However, the veteran investor did admit that he has made investments in stocks about which he did not have a complete idea. “We knew the business, but did not have insight about the business. They are good companies,” Buffett said.
The top boss at Berkshire Hathaway said the company currently has $70-80 billion in excess cash that it would “like to put to work” but isn’t getting “a chance to do it in these conditions.”
