Legendary billionaire investor and Berkshire Hathaway Inc. CEO Warren Buffett believes that value investing still holds significant opportunities despite the market's changing landscape. During Berkshire Hathaway's annual shareholders’ meeting, Buffett expressed optimism about the future of value investing, citing the prevalence of "other people doing dumb things" as a key driver of these opportunities.
"What gives you opportunities is other people doing dumb things," Buffett said. "During the 58 years we've been running Berkshire, I would say there's been a great increase in the number of people doing dumb things — and they do big dumb things. And the reason they do it, to some extent, is because they can get money from other people so much easier than when we started."
Despite these trends, Buffett remains confident that value investing isn't going anywhere.
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While acknowledging the impact of disruptive technological innovation on the market, Buffett dismissed the notion that it hampers value investing opportunities. He asserted that new developments do not take away opportunities. Instead, it is the poor decisions of others that create openings for astute investors.
While the avenues for finding undervalued companies may have transformed over time, the fundamental principle remains intact — identifying opportunities where others have faltered.
Buffett's investment philosophy revolves around seeking out stocks or businesses available at bargain prices. His success as a value investor has made him one of the most respected figures in the financial world. Berkshire Hathaway, under his guidance, has acquired significant stakes in renowned companies such as Apple Inc. and Bank of America Corp., while also owning businesses in diverse sectors like railroads, energy and insurance.
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Berkshire Hathaway Vice Chairman Charlie Munger took a slightly different stance from Buffett. Munger expressed a more pessimistic outlook, suggesting there may be fewer opportunities left for value investors in the current market. He highlighted the abundance of money in the hands of intelligent people all striving to outsmart one another.
This has even begun reshaping retail investing trends. The overall stock market has trillions at play with increasing amounts going into 401k’s and other funds directed towards public companies. Especially during volatility, companies are increasingly investing in the top companies like Apple, Microsoft Corp., Alphabet Inc., and other companies now reaching into the trillions. This has left millions of retail investors to invest in pre-IPO companies on platforms like StartEngine and Wefunder. This allows investors to invest in startups and pre-IPO companies at valuations as low as a few million, then reap the rewards of going public as early as possible.
Along the same lines, brokers like Robinhood Markets Inc. and Webull have been rolling out investment opportunities in pre-IPO companies. This allows everyday investors to reserve shares in companies immediately prior to an IPO often with share lock-up limitations.
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