"NEVER BET AGAINST AMERICA" !! Warren Buffet spent the first 45 minutes of the Annual Berkshire Hathaway Meeting last Saturday on May 2nd providing a summary historic analysis of the United States Economic growth story. Since its inception around 1776, with a population that represented a tiny fraction of the global population, no one at that time could have foreseen what America was going to become in just 244 years. Using a crude calculation based on the 1815 sale of Louisianna to the USA for a mere $15million icluding mineral rights (3cents an acre) Buffet estimates the total worth of the US to have been $1billion in 1815. That total worth has mushroomed to over $150 Trillion in just 234 years. That is a staggering 150,000% growth. No wonder Buffet calls America "An Economic Miracle"!
During this time America has withstood a civil war, the 1918 flu pandemic, the great depression and two world wars. Take a look at this chart documenting major crisis and the stock markets growth. It is staggering to think what America has accomplished and it is on this factual basis that Buffet's opening takeaway was "Never, Never Bet Against America"!
A strong opening statement that was followed by the reality that we are living in uncertain times with the Coronavirus Global Pandemic and that no-one really knows how this is going to unfold. Scientists have been warning for years that it was not "if" but "when" a global pandemic would hit. Berkshire Hathaway's philosophy is to be prepared. Always hold a lot of cash on hand, not only for potential business opportunities but also for weathering uncertain economic times. With 120 Billion cash on hand, Berkshire Hathaway is in a good position to withstand the current economic shock even with the significant losses its businesses are facing.