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The legend leads Berkshire to new heights

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Warren Buffett walks the floor ahead of the Berkshire Hathaway Annual Shareholders Meeting in Omaha, Nebraska on May 3, 2024.

David A. Grogen | CNBC

Warren Buffett turned 94 on Friday and his sprawling, one-of-a-kind conglomerate has never been worth more than it is today.

Berkshire Hathaway became the first nontechnology company to top a $1 trillion market capitalization this week. Berkshire Class A shares also topped $700,000 apiece for the first time ever.

Howard Marks, a great investor in his own right and friend of Buffett’s, credits three things that have allowed the “Oracle of Omaha” to lead Berkshire to new heights, even at his advanced age.

“It’s been a matter of a well-thought-out strategy prosecuted for seven decades with discipline, consistency and unusual insight,” said Marks, co-founder and co-chairman of Oaktree Capital Management. “Discipline and consistency are essential, but not sufficient. Without the unusual insight, he clearly wouldn’t be the greatest investor in history.”

“His record is a testament to the power of compounding at a very high rate for a very long period of time, uninterrupted. He never took a leave of absence,” Marks added.

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Berkshire Hathaway

In the midst of the go-go stock market of the 1960s, Buffett used an investment partnership he ran to buy what was then a failing New England textile company named Berkshire Hathaway. Today, his company is unrecognizable from what it once was, with businesses ranging from Geico insurance to BNSF Railway, an equity portfolio worth more than $300 billion and a monstrous $277 billion cash fortress.

Eye-popping returns

Generations of investors who study and imitate Buffett’s investing style have been wowed by his shrewd moves for decades. The Coca-Cola bet from the late 1980s made a lesson for patient value investing in strong brands with wide moats. Injecting a lifeline investment in Goldman Sachs in the depth of the financial crisis showed an opportunistic side during crises. Going all in on Apple in recent years spoke to his flexibility at adopting his value approach to a new age.

Buffett made headlines earlier this month by revealing he had dumped half of that Apple holding, ringing the bell a bit on an extremely lucrative trade. (While Apple is widely viewed as a growth stock, Buffett has long argued all investing is value investing — “You are putting out some money now to get more later on.”)

Decades of good returns snowballed and he has racked up an unparalleled track record. Berkshire shares have generated a 19.8% annualized gain from 1965 through 2023, nearly doubling the 10.2% return of the S&P 500. Cumulatively, the stock has gone up 4,384,748% since Buffett took over, compared with the S&P 500’s 31,223% return.

“He’s the most patient investor ever, which is a big reason for his success,” said Steve Check, founder of Check Capital Management with Berkshire as its biggest holding. “He can sit and sit and sit. Even at his age where there’s not that much time left to sit, he’ll still sit until he feels comfortable. I just think he’ll just keep doing as best he can right to the end.”

Buffett remains chairman and CEO of Berkshire, although Greg Abel, vice chairman of Berkshire’s noninsurance operations and Buffett’s designated successor, has taken on many responsibilities at the conglomerate. Earlier this year, Buffett said Abel, 62, will make all investing decisions when he’s gone.

Buffett and Marks

Oaktree’s Marks said Buffett reinforced concepts that are integral to his own approach. Like Buffett, he is indifferent to macro forecasting and market timing; he seeks value relentlessly, while sticking to his own circle of competence.

Howard Marks, co-chairman, Oaktree Capital.

Courtesy David A. Grogan | CNBC

“He doesn’t care about market timing and trading, but when other people get terrified, he marches in. We try to do the same thing,” Marks said.

Buffett, who at Columbia University studied under Benjamin Graham, has advised investors to view their stock holdings as small pieces of businesses. He believes volatility is a huge plus to the real investor as it offers an opportunity to take advantage of emotional selling.

Oaktree, with $193 billion in assets under management, has grown into one of the biggest alternative investments players in the world, specializing in distressed lending and bargain-hunting.

Marks, 78, has become a sharp, unequivocal contrarian voice in the investing world. His popular investment memos, which he started writing in 1990, are now viewed as required reading on Wall Street and even received a glowing endorsement from Buffett himself — “When I see memos from Howard Marks in my mail, they’re the first thing I open and read. I always learn something.”

The two were introduced in the aftermath of the Enron bankruptcy in the early 2000s. Marks revealed that Buffett ultimately motivated him to write his own book — “The Most Important Thing: Uncommon Sense for the Thoughtful Investor — over a decade ahead of his own schedule.

“He was very generous with his comments. I don’t think that book would have been written without his inspiration,” Marks said. “I had been planning to write a book when I retired. But with his encouragement, the book was published 13 years ago.”

Buffett’s trajectory and his ability to enjoy what he does into his 90s also struck a chord with Marks.

“He says that he skips to work in the morning. He tackles investing with gusto and joy,” Marks said. “I still haven’t retired, and I hope never to do so, following his example.”

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Buffett denies social media rumors after Trump shares wild claim that investor backs president crashing market

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Berkshire Hathaway responds to 'false reports' on social media

Warren Buffett went on the record Friday to deny social media posts after President Donald Trump shared on Truth Social a fan video that claimed the president is tanking the stock market on purpose with the endorsement of the legendary investor.

Trump on Friday shared an outlandish social media video that defends his recent policy decisions by arguing he is deliberately taking down the market as a strategic play to force lower interest and mortgage rates.

“Trump is crashing the stock market by 20% this month, but he’s doing it on purpose,” alleged the video, which Trump posted on his Truth Social account.

The video’s narrator then falsely states, “And this is why Warren Buffett just said, ‘Trump is making the best economic moves he’s seen in over 50 years.'”

The president shared a link to an X post from the account @AmericaPapaBear, a self-described “Trumper to the end.” The X post itself appears to be a repost of a weeks-old TikTok video from user @wnnsa11. The video has been shared more than 2,000 times on Truth Social and nearly 10,000 times on X.

Buffett, 94, didn’t single out any specific posts, but his conglomerate Berkshire Hathaway outright rejected all comments claimed to be made by him.

“There are reports currently circulating on social media (including Twitter, Facebook and Tik Tok) regarding comments allegedly made by Warren E. Buffett. All such reports are false,” the company said in a statement Friday.

CNBC’s Becky Quick spoke to Buffett Friday about this statement and he said he wanted to knock down misinformation in an age where false rumors can be blasted around instantaneously. Buffett told Quick that he won’t make any commentary related to the markets, the economy or tariffs between now and Berkshire’s annual meeting on May 3.

‘A tax on goods’

While Buffett hasn’t spoken about this week’s imposition of sweeping tariffs from the Trump administration, his view on such things has pretty much always been negative. Just in March, the Berkshire CEO and chairman called tariffs “an act of war, to some degree.”

“Over time, they are a tax on goods. I mean, the tooth fairy doesn’t pay ’em!” Buffett said in the news interview with a laugh. “And then what? You always have to ask that question in economics. You always say, ‘And then what?'”

During Trump’s first term, Buffett opined at length in 2018 and 2019 about the trade conflicts that erupted, warning that the Republican’s aggressive moves could cause negative consequences globally.

“If we actually have a trade war, it will be bad for the whole world … everything intersects in the world,” Buffett said in a CNBC interview in 2019. “A world that adjusts to something very close to free trade … more people will live better than in a world with significant tariffs and shifting tariffs over time.”

Buffett has been in a defensive mode over the past year as he rapidly dumped stocks and raised a record amount of cash exceeding $300 billion. His conglomerate has a big U.S. focus and has large businesses in insurance, railroads, manufacturing, energy and retail.

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Stocks making the biggest moves midday: PLTR, CAT, AAPL JPM

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Powell sees tariffs raising inflation and says Fed will wait before further rate moves

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US Federal Reserve Chair Jerome Powell holds a press conference after the Monetary Policy Committee meeting, at the Federal Reserve in Washington, DC on March 19, 2025. 

Roberto Schmidt | Afp | Getty Images

Federal Reserve Chair Jerome Powell said Friday that he expects President Donald Trump’s tariffs to raise inflation and lower growth, and indicated that the central bank won’t move on interest rates until it gets a clearer picture on the ultimate impacts.

In a speech delivered before business journalists in Arlington, Va., Powell said the Fed faces a “highly uncertain outlook” because of the new reciprocal levies the president announced Wednesday.

Though he said the economy currently looks strong, he stressed the threat that tariffs pose and indicated that the Fed will be focused on keeping inflation in check.

“Our obligation is to keep longer-term inflation expectations well anchored and to make certain that a one-time increase in the price level does not become an ongoing inflation problem,” Powell said in prepared remarks. “We are well positioned to wait for greater clarity before considering any adjustments to our policy stance. It is too soon to say what will be the appropriate path for monetary policy.”

The remarks came shortly after Trump called on Powell to “stop playing politics” and cut interest rates because inflation is down.

There’s been a torrent of selling on Wall Street following the Trump announcement of 10% across-the-board tariffs, along with a menu of reciprocal charges that are much higher for many key trading partners.

Powell noted that the announced tariffs were “significantly larger than expected.”

“The same is likely to be true of the economic effects, which will include higher inflation and slower growth,” he said. “The size and duration of these effects remain uncertain.”

Focused on inflation

While Powell was circumspect about how the Fed will react to the changes, markets are pricing in an aggressive set of interest rate cuts starting in June, with a rising likelihood that the central bank will slice at least a full percentage point off its key borrowing rate by the end of the year, according to CME Group data.

However, the Fed is charged with keeping inflation anchored with full employment.

Powell stressed that meeting the inflation side of its mandate will require keeping inflation expectations in check, something that might not be easy to do with Trump lobbing tariffs at U.S. trading partners, some of whom already have announced retaliatory measures.

A greater focus on inflation also would be likely to deter the Fed from easing policy until it assesses what longer-term impact tariffs will have on prices. Typically, policymakers view tariffs as just a temporary rise in prices and not a fundamental inflation driver, but the broad nature of Trump’s move could change that perspective.

“While tariffs are highly likely to generate at least a temporary rise in inflation, it is also possible that the effects could be more persistent,” Powell said. “Avoiding that outcome would depend on keeping longer-term inflation expectations well anchored, on the size of the effects, and on how long it takes for them to pass through fully to prices.”

Core inflation ran at a 2.8% annual rate in February, part of a general moderating pattern that is nonetheless still well above the Fed’s 2% target.

In spite of the elevated anxiety over tariffs, Powell said the economy for now “is still in a good place,” with a solid labor market. However, he mentioned recent consumer surveys showing rising concerns about inflation and dimming expectations for future growth, pointing out that longer-term inflation expectations are still in line with the Fed’s objectives.

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