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Timestamps:
Announcements: 0:00
Classic Intro: 1:38
Portfolio Update: 2:07
Disney Stock Crashes AGAIN (Earnings + Analysis): 5:13
Surprise Delivery: 24:27
Market Update: 25:13
Warren Buffett’s Best Investing Advice To Beat Inflation: 26:29
Final Market Update: 37:46
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LEARN ABOUT: Investing During Inflation
REVEALED: Best Investment During Inflation
HOW TO INVEST IN GOLD: Gold IRA Investing
HOW TO INVEST IN SILVER: Silver IRA Investing
E3: How Warren Buffett Invests To Beat High Inflation
Every year, investors around the world look forward to the Berkshire Hathaway annual shareholders meeting, where Warren Buffett, the legendary investor, shares his insights on the market and economy. One topic that has been top of mind for many investors recently is how to beat high inflation, as concerns about rising prices have become more prominent. In this article, we will explore how Warren Buffett approaches investing in an inflationary environment to protect and grow his wealth.
Inflation is the increase in the prices of goods and services over time, which erodes the purchasing power of a currency. This means that the same amount of money buys less than it used to, leading to a decrease in the standard of living for individuals and businesses. Inflation can be caused by a variety of factors, including central bank policies, supply chain disruptions, and changes in consumer behavior.
To combat high inflation, Warren Buffett follows a few key principles in his investing strategy. Firstly, he focuses on investing in companies with strong competitive advantages, or moats, that allow them to maintain pricing power in the face of rising costs. This means choosing companies that can pass on higher input costs to customers without losing market share, ensuring that their profitability remains stable or even grows during inflationary periods.
Buffett also looks for companies with pricing power, which means they have the ability to increase prices without losing customers. This allows these companies to maintain or even improve their profit margins when faced with rising inflation. By investing in businesses with pricing power, Buffett is able to protect his wealth from the erosive effects of inflation.
Additionally, Buffett avoids investing in companies with high debt levels or significant exposure to volatile commodity prices, as these factors can increase the risk of financial distress during inflationary periods. Instead, he prefers businesses with stable cash flows and solid balance sheets, which are better positioned to weather economic uncertainty and continue to grow their earnings over time.
Furthermore, Buffett is known for his long-term investing approach, focusing on businesses with sustainable competitive advantages and strong management teams. By holding onto his investments for the long term, Buffett is able to benefit from the compounding effect of returns, which can help offset the impact of inflation on his portfolio.
In conclusion, Warren Buffett’s approach to investing in an inflationary environment is based on selecting companies with strong competitive advantages, pricing power, and solid financial fundamentals. By following these principles, Buffett is able to protect and grow his wealth even in times of high inflation. As investors navigate the current economic landscape, they can look to Buffett’s strategies for inspiration on how to navigate and thrive in challenging market conditions.
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So your point about Gold (and Silver i would add) vs. the Dollar is spot on. However your point about Gold vs. "productive assets" not so much. Firstly those "productive assets" are priced in Dollars. The fact of the matter is that those "productive assets" need 2 things to outshine gold over time, Inflation (destruction of the purchasing power of the dollar) AND growth. In periods where the stock market doesn't move over time…Gold will outshine because of the value of the Dollar in constant decline (assuming you are pricing it in Dollars) obviously it will move a LOT faster if you are in the Turkish Lira. Growth is about to collapse because around the world the Baby Boomers are retiring and going to be selling off their assets and leaving their productive years behind and Gen X is a small generation so most of the world is going to have a demographic decline with some having a demographic time bomb like China.
Long story short, Gold and Silver have their place and it will show over time regardless. Precious metals are a defensive play and hard asset, their "productive part" is in maintaining their value over time while the currency gets eroded since it is fiat currency with built in inflation (a silver quarter today is worth roughly what its purchasing power was in 1964, roughly a gallon of gas or $5). Go look into the Gold price to Oil price ratio for a really good idea of the value of those commodities. Those "productive assets" like stocks for example since that's what your channel is about MUST have earnings growth for price appreciation and/or inflation as you profiled in Disney, they don't all grow and they don't all do well and it WILL BE hit and miss with them. Gold is a no brainer because it WILL go up in "value" because the Dollar WILL go down in value due to built in inflation. The idea that Buffet (a great investor) touts Gold a 100 years ago shows a GIANT lack of understanding of the change that occurred in 1971 with the Dollar. Gold and the US stock market are priced IN DOLLARS, so the Dollars destruction is why you buy Gold/Silver. If you don't think that the destruction of the Dollar is a thing, go compare the price of Gold and Silver in 2000 and then check it today. Gold was steady all those years (from 100 years ago to 1971) BECAUSE we were on a Gold standard, that changed in August of 71 and the Dollar was decoupled from Gold and became fiat, the game changed and as the Dollar is destroyed more and more and ever faster by all the printing…Gold WILL go up because it can't be printed into infinity. The fact of the matter is that if you strip out inflation the S&P has only gone up 6X since 1971…ALL the rest of the increase is inflation, just think about that.
Yes, stocks can be great and yes they are productive assets. But the problem is when folks can't afford that candy BECAUSE the Dollar is destroyed, they won't be buying it and there won't be production or production growth and those stocks will go to zero…then what? When those "productive assets" have no buyer THEN WHAT? That IS the lesson of the great depression. So if you worry about the Dollar (and i do) then having a hard assets makes sense so that i can afford that candy when most can't and maybe keep his business running but at a SEVERELY lower base. Keep in mind, i am by no means saying put 20%-50% or more of your assets in Gold/Silver but it IS prudent to have 5%-10% in hard assets…as insurance. There is no "hope" that someone is going to buy it for more, Gold/Silver has been MONEY for the last 5000 YEARS. Gold and Silver ARE actual money as in the very DEFINITION of money, fiat is NOT money, it's a currency. In addition all fiat currencies have failed…ALL OF THEM and the Dollar will be no different.
Can you please do a video as to why you do not own DPZ? As a fellow believer in mungerism, it seems to fit the standards that Berkshire religiously follows. Love your videos man! Thank god you’re on here, god bless
How much did you invest from your salary when you started?
I love Buffett and dividends… but his examples for gold don’t account for risk. Gold is risk free… how much of the population can buy a farm or an apt building and say have 2 bad years and keep the asset? Buffett is talking about production but this “assets can be liabilities if someone doesn’t pay rent or a bad crop” Gold is easy way to hedge inflation for the small guy to become his own bank. Not to have 10% in Gold is a risk.
Thanks for the video! Loved the reminder to stay away from crypto!
Love the new style and the intro back in is a bonus, keep it up
This certainly sounds good too, but I think it's still worth considering more reliable options like copy trading platforms such as Eledator, for example.
I want to say thank you to the guy in the comments who recommended Eledator to me. You've been very helpful. Thank you!
Thx for the info. It's very useful. Last time, I also came across Eledator, and financially, it has been very helpful for me. So thank you again!
Cool video! I'd like to add that there are other investment options in copy trading platforms like Eledator as well.
I personally feel Staarbucks is a fantastic long term hold, it traded way way down to the point of being over sold (in my eyes) I think its a great addition and pick up for your portfolio
Good video. i like the hat!