Warren Buffett Reveals How Much Is In His Wallet | April 24, 2014 | Summary and Q&A

Transcript

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Summary

In this video, Warren Buffett answers various questions related to his favorite comedian, the wealth disparity in America, the stock market, the housing market, and his personal preferences.

Questions & Answers

Q: What was the toughest question you got at lunch?

Well, somebody asked me who my favorite comedian was of all time, and I could think of a lot of them I like but I didn't want to pick.

Q: What are your top three favorite comedians?

I came up with Billy Crystal. I saw him do a performance once. But I go back to the days of Jack Benny and some of those, so I could come up with names you've never heard of.

Q: How troubling is it that Canada is now the richest middle class in the world?

I read that story, and our GDP per capita is about $51,000 or $52,000. We are a very rich country. Our output per person has gone up six times in real terms in my lifetime. So, it's a remarkable country and it's not over yet.

Q: Can America continue to prosper if the middle class keeps losing ground?

It's not a good thing. The ultra-rich have gotten far wealthier, and more and more of the national pie has moved to them and away from the middle class.

Q: What do you see as the number one driver of the acceleration of inequality?

I think it is a natural consequence of a market system that gets more specialized over time. The market system is wonderful and produces goods and services, but it also leaves behind people whose skills aren't well adapted to it.

Q: Why do most investors have their lowest amount of trust in stocks ever?

They are wrong. Trust in stocks means trusting American business. American business has done very well for people over time, and those who own stocks will do well in the long run. Short-term fluctuations are normal, but over time, business will keep earning more money and producing more goods.

Q: If corporate America doesn't make big investments and wage increases, does it hurt the recovery?

Most businesses are thinking about it, and they want to sell more goods and do more business. Business investments have been increasing, and the economy has been moving forward since 2009. It may not be galloping forward, but it's progressing at a decent pace.

Q: What could get the economy galloping right now?

Creating demand can be done in various ways, such as providing stimulus. However, you always have to consider the consequences and the "and then what" factor. It's not as simple as dropping money from the sky.

Q: Should potential first-time home buyers buy a house this spring?

If you plan to live in the same location for a significant period of time, you should buy a house. Mortgage rates are currently very cheap, and it can be a great purchase.

Q: How long do you think the low mortgage rates will last?

I don't know, and I'm not good at predicting such things. I wish I knew because then I could speculate in treasury futures.

Takeaways

Warren Buffett emphasizes the importance of the market system and its ability to produce goods and services. He acknowledges the wealth disparity and the challenges faced by the middle class. Buffett believes in the long-term success of American business and encourages trust in stocks. He also highlights the potential for the housing market and provides advice for potential home buyers. Overall, Buffett remains optimistic about the future of America and advises individuals to make decisions based on their long-term plans.