How Warren Buffett crushed inflation, recession and a stock market crash in the 1970s!

by | Oct 15, 2022 | Invest During Inflation | 39 comments

How Warren Buffett crushed inflation, recession and a stock market crash in the 1970s!




We’re living through a period similar to the 1970’s. Investors face high inflation, a recession and a potential stock market crash. While the 1970’s were an extremely tough period for consumers and investors, they were also one of the best decades for Warren Buffett’s Berkshire Hathaway. In this video, we discuss the stagflation secrets and how Warren Buffett crushed high inflation, a recession and a stock market crash in the 1970’s!

00:00 Intro
01:26 What Would Buffett Do?
03:35 Lesson #1: Focus on Growth
06:24 Lesson #2: Be Opportunistic
10:18 Lesson #3: Keep an Open Mind
13:04 Will Oil stocks outperform the S&P from here?
14:29 Summary Lessons

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DISCLAIMER:
This video is purely for informational and educational purposes. This is NOT investment advice. You should not treat any opinion expressed by Daniel or Unrivaled Investing as a specific inducement to make a particular investment or follow a particular strategy but only as an expression of opinion. Daniel and Unrivaled Investing are not under any obligation to update or correct any information provided on this website or in these videos. Daniel and Unrivaled Investing’s statements and opinions are subject to change without notice.

You should be aware of the real risk of loss in following any strategy or investment discussed in this video or on this website. Strategies or investments discussed may fluctuate in price or value. Investors may get back less than invested. Investments or strategies mentioned by Daniel or Unrivaled Investing may not be suitable for you. Past performance is not indicative of future results.

See also  Inflation: The Quiet Threat to Your Finances

At the time of this publication, Daniel owned stock in GOOG.

INTERACTIVE BROKERS DISCLAIMER:
Interactive Brokers provides execution and clearing services to its customers. UNRIVALED INVESTING is not affiliated with, recommended by or an agent of Interactive Brokers. Interactive Brokers makes no representation and assumes no liability to the accuracy or completeness of the information provided in this video. For more information regarding Interactive Brokers, please visit www.interactivebrokers.com.

None of the information contained herein constitutes a recommendation, offer, or solicitation of an offer by Interactive Brokers to buy, sell or hold any security, financial product or instrument or to engage in any specific investment strategy. Investment involves risks. Investors should obtain
their own independent financial advice and understand the risks associated with investment products/ services before making investment decisions. Risk disclosure statements can be found on the Interactive Brokers website.

UNRIVALED INVESTING is a customer of Interactive Brokers. Interactive Brokers and UNRIVALED INVESTING have entered into a cost-per-click agreement under which Interactive pays Daniel a fee for each click-through of the Interactive Brokers URL posted herein….(read more)


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39 Comments

  1. UNRIVALED INVESTING

    Take charge of your financial journey with expert investment insights, stock ideas and market commentary at http://www.unrivaledinvesting.com Thank you to all the UNRIVALED INVESTING subscribers that keep this channel going!

  2. Lamin Ceesay

    Love the presentation. Would like to see a presentation consisting of charts showing inflation and stock market performance from the 1970s to date. For some of us, this is our first opportunity investing in markets like this, and if we can get a glimpse of what the markets did during past inflation, we might be able to come out of this one victorious. I'll subscribe and stay connected.

  3. Shekhar Malvadkar

    I recommend skipping the background music in your videos. It acts as an distraction and comes in the way of listening to your otherwise consistently informative presentation.

  4. Drunk Gambler

    Buffet cant predict Oil prices. Remember his Conoco deal, when he thought oil is goint to 200$ , but it dropped to 35$ instead?

  5. Cory Balliet

    UI is one of the best financial channels on YouTube. Original thinkers with unique ideas.

    My best guess is a portfolio of only SPY and BRK.B will outperform everything else over the next 20 years, but best of luck to everyone on their investments.

  6. Gavin Smith

    Don't like the scratchy transitions. Too grating both visually and sonically. Otherwise like your recent format and this one both. It's the content that is important and that's why I watch. Thank you for your information

  7. LV

    I'm actually encouraged by a few things right now – price drops in commodities/oil and price drops in containership / ocean freight rates (and an overall improvement in supply chains / port congestion). I'm not saying inflation has peaked, but maybe it has, or maybe there's at least some light at the end of the tunnel. I'm working two jobs and selling extra stuff on eBay to buy as much of this stock market dip as I can, while it stays low. These times of such great deals don't come about very often.

  8. DarkKnight9i9

    don't like the music

  9. Kingdom Of Finance

    I can tell this video took you a while to make Daniel. Incredible stuff!

  10. You Wanna Wager?

    I like the new format as long as you stay true to keeping the channel analytical and informative first. Just don’t become like Deadnsyde where his content became a cluster fuc of dumb attention grabbing memes.

  11. Mike Molesky

    Excellent video – I think Buffett is onto something with his purchases of Oxy and Chevron – he's lived this game before. He's making big purchases in oil and gas but it is really only profits that he keeps generating from the other businesses – he still has approx 15% cash compared to the market cap of BRK. I would love for you to dive deeper into the companies that Buffett bought during the 70's – that were mentioned in the video and what he saw in those companies that nobody else recognized. The thing that concerns me the most is the fertility rate across the world. We're almost sure to have slow growth in the future just because of demographics.

  12. Arjan Singh

    I personally didn't like this format. It was like how news channels sensationalize content.

  13. Sharon Guy

    Must say i dont like this new format.

  14. Jake LaMotta

    Tbh you need an inflation proof job. I already got a 10% increase and get another one at the end of the year. I am already outperforming inflation. But if you rely on dividends eg then good luck

  15. Nelly Frittata

    Well done! Appreciate the hard work you put into this one

  16. Anyone

    I like the video and your channel in general. However, I wouldn't touch oil companies with a 10-foot pole. I can only see headwinds, both short and long-term. Short term: 1) oil prices are at historically high values, which are bound to normalize. 2) If the inevitable recession comes (/worsens), oil prices will crash down as economic activity cools. Long term: the aim of most countries is to hardly burn any oil in 25 years. If we experience more aversive effects of climate change in the next couple of years (e.g. even more extreme wildfires, floodings etc.), you can make this 15 years. Simply put, the business model of oil companies has no long-term future and their valuations are too lofty. Morally, if you have kids, good luck with justifying your investment and good luck with being a good role model…

  17. Rafael Calero

    Being part of a club that know exactly what is about to happen…

  18. ArcanePath360

    I think it's time the Fed learned to print oil instead.

  19. Mircea Crisan

    Is not just high inflation is also high debt, demography decline. Mrs. Buffet lived in a great era for 100 years. This is just about to change.

  20. L D

    Nice new format Daniel! This only solidifies my opinion that this channel is UNRIVALED & NO HYPE & MISSION FOCUSED!!!!!!!

  21. Tolga

    Best editing so far, very engaging

  22. Kobe

    Good to still see your face throughout the video, that way you don't lose the personal touch. Very informative compared to previous video's. Better quality. Keep this up, i feel like you'll get more views using this format.

  23. StockInvest

    Great format and content!

  24. Gleb Katrats

    I think that using celebrities in your video is undermining great content and history is never repeating itself so use your own head and invest only in clear bargains on this market

  25. Habib Mazahir

    Some Individual stocks may outperform commodities but the index as a whole may face a rocky road ahead.

  26. MrAnarchocapitalist

    The 1973 OPEC embargo lasted 6 months, from October 73 to March 74. The price of oil remained elevated for 8 years – until January 1981. That wasn't because of the 6 month embargo. It was because of Nixon's reaction to it. To encourage oil exploration, Nixon fixed the price of oil from all oil fields discovered up to that point. But, the price of oil produced at newly discovered fields was allowed to float at market rates. The result: oil companies shut down production at old fields. That caused a shortage and skyrocketing prices. Nixon also rationed oil to the states based on 1972 usage rates. As state populations shifted over time, states with faster rising populations experienced a much more severe crunch. Carter came along a few years later and made it all worse with a windfall profits tax on oil. Reagan repealed the price fixing and rationing on his 6th day in office. Like magic, all of the old oil fields came back online and the price of oil plummeted. Reagan later got rid of the windfall profits tax.

    The price of oil is baked into the price of everything else. That's why inflation was so high in the 1970s. Money printing was part of it, but the bulk of the problem was dumb laws.

    Today isn't quite the same. In 2020, after oil went negative, oil companies slashed their capex budgets for the next 5 years and refiners shut down production. The oil companies have never restored those old budgets and the refiners have never restarted a lot of their production capacity. There is nothing preventing them from doing so except the desire to keep supplies tight and prices elevated. That won't last. There is a reason why OPEC is so ineffective as a cartel. Eventually someone always seizes the opportunity to make more profits while others are limiting production by ramping up production themselves.

    Don't plan on high inflation lasting for a decade, as it did in the Nixon-Reagan years. It isn't the same setup.

  27. Will

    The professionalism in this video is not unnoticed! Only critique is to be careful when/if reading a script. Use bullet points to remind of ideas so that you speak naturally instead of reading aloud. (Again, just my opinion. I could be crazy but just want to see you succeed you are one of few great resources in investube)

  28. Mike Underell

    Yeah, I’m overweight in commodities rn.

  29. HungrigKung

    This was well done

  30. Reed Hastings

    I know you're experimenting with driving growth in your channel, and I must say, I'm a fan of this format. I'm sure it took much longer to produce and hope you get some help long-term with the editing….it's your actual commentary that I appreciate!

  31. Alex

    Like your new format. Much more suitable for the average YT watcher

  32. Hans

    There are simply two things Buffett does outstandingly: 1. he owns stocks perform relatively better during crashes; 2. he has tons of cash before/during the crash to buy great companies at cheaper price.

  33. Otis Bullock

    I love this, Daniel. I’ve been following you for a while and I am a Patreon supporter. I must say that this is your best video yet.

  34. Amirsalar Shekarkhar

    The new video format is awesome…just a suggestion: lower the number of transitions. Seeing a different clip with every word makes it confusing, at least to me. Love seeing the progress in this channel. Keep up the good work!

  35. luhark9

    Good job Daniel!

  36. Danny O

    Thanks.

  37. Jay

    Digging the new format. Higher production?? Great video.

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