The financial markets would love to know what Buffett’s next deal is. It may take longer to come than many expect.
A frequent question during any time of market stress is what will Buffett do? He has a reputation as a dealmaker, and Berkshire stepping in with a big deal can be a positive sign for those who invest with a similar approach.
Warren Buffett held court at the Berkshire Hathaway
BRK. B shareholder’s meeting on Saturday May 2 2020, answering questions from investors at length and summarizing his views on the markets and economy. He gave no indication that any big deal was imminent, and though he said it’s always possible that a $30B deal could happen if he got the right phone call, he also gave a few reasons why such a deal may not be immediate.
Buffett shared that his goal is above all to do the right deals for Berkshire. He can’t control when these opportunties come along. There is no guarantee that such a deal would coincide with a lull in the markets. If it does and people view it as a sign of confidence in the markets as occurred in 2008-9 then Buffett is very happy to provide such a boost, but that’s never his ultimate goal. He won’t do deals to instill market confidence, his aim is to find the right long-term businesses for Berkshire. Those opportunities are infrequent, especially at the size Berkshire now operates at, where meaningful deals must typically be in the tens of billions.
Buffett also shared that during the most recent market panic in the second half of March he believed the Fed under Jay Powell did an excellent job.
