Monthly Archives: July 2016

Warren Buffett Interviewed on Brexit, Negative Interest Rates and Climate Change

Check out this video where Warren Buffett addresses the headline-grabbing issues of the day: Brexit, Negative Interest Rates, and Climate Change. Spoiler alert, here are some of his quotes from the video: 

On Brexit: 
"It won't make any difference to anything Berkshire does."

On Negative Interest Rates:
"It is a huge stimulus to borrowing."

On Climate Change:
"It is not a risk to our insurance business."

Warren Buffett effortlessly reconciles his two rules of investing (Rule #1: Don't lose money. Rule #2: Don't forget Rule #1) with his perennial optimism in American Industry. For Buffett, any concern over Brexit or Climate Change is a non-starter. "I mean, if I was assured by Cameron that they were going to stay in or leave, it wouldn't change one iota what I'm doing in businesses or in stocks." About Climate Change he says, "It's not an insurance risk."

On the contrary, negative interest rates are having a huge impact on his business decisions. He sees the current low rate environment as an opportunity to invest more aggressively than he otherwise would if rates were closer to their long-term norms. As an example, he cites a purchase he recently made, "I know that I paid more for Precision Cast Parts because interest rates are so low than I would have paid if interest rates were 6 or 8 %."

It is refreshing to hear a level-headed response to the fear-mongering from the media. If you have any questions on anything you may have heard on the news, and how it may impact your investments, please feel free to reach out to us. We will be happy to discuss it with you.

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