Warren Buffett is being very quiet right now, and this could be a bad omen for the world’s stock markets and wider economies.
Mr Buffett is chief executive of Berkshire Hathaway, which has big stakes in companies such as Amazon, Coca-Cola and Apple, and owns more than 90 businesses, including a railroad, an insurer, an energy provider and retailers.
He is a legendary investor, who is known as the "Oracle of Omaha". His patient, measured approach as well as brilliant track record in deal-making have made him one of the richest men in the world, and earned him a legion of followers. Tens of thousands of them gather every year for Berkshire’s annual shareholder meeting, which is more akin to a pop concert, sports event or religious revival than a typical corporate gathering.
But since the end of February, Mr Buffett has said very little (as of the time of writing). Amid what is foremost a public health crisis that is claiming lives daily, that would appear to be a wise and considered position for someone focused on financial markets. He is also in the highest-risk category personally from the coronavirus.
The 89-year-old, who had prostate cancer in 2012, is working from his home in Omaha, Nebraska – rather than his office only a few kilometres away – and seems to be following physical-distancing advice.
However, his low profile at the moment is in contrast to how he responded during the last great crisis more than a decade ago.
It could be argued that his leadership at the tail end of 2008, after the collapse of the Lehman Brothers investment bank, helped spur a swell of co-operative effort in the US to mitigate the sub-prime crisis’s impact and potential contagion across the world.
Washington, in particular, subsequently showed exemplary bipartisanship as President George W Bush's term in office drew to a close and Barack Obama was poised to enter the White House. A month after Lehman's failure, The New York Times published an op-ed by Mr Buffett.
A keen student of history, he wrote on October 16, 2008: “In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president.”
The article was a rallying cry for those who believed in the American system of capitalism and the country’s ability to ride out any economic hardship. Mr Buffett stood firm and said he would not panic. In fact, he stated his intent to keep investing in US companies and assets. “Today my money and my mouth both say equities,” he wrote.
Mr Buffett then poured billions of dollars into stocks, such as those of investment bank Goldman Sachs and conglomerate General Electric, and these moves earned him billions more.
Last week, Berkshire Hathway said it had sold about 18 per cent of its stake in Delta Air Lines and four per cent of its holdings in Southwest Airlines. AP Photo
As of the end of last year, his portfolio was valued at $248 billion.
Last week, Berkshire said it had sold about 18 per cent of its stake in Delta Air Lines and four per cent of its holdings in Southwest Airlines. This is hardly surprising, given how hard the aviation sector has been hit by global measures to control the outbreak, such as the grounding of flights and shutting of borders. Any other buying or selling activity on Berkshire’s part is not yet public knowledge.
However, Mr Buffett does have about $100bn in cash that could be deployed immediately if he so wishes. That he is not being as vocal about what he is doing could well be his sense of dignity and empathy for the common man showing through; other well-known investors who are talking more could, perhaps, be accused of putting financial gains ahead of the human cost of the pandemic.
In a presidential election year, the passage of a $2 trillion stimulus bill in the US Congress could be the extent to which bipartisanship was achieved in Washington. Reuters
An investor friend of mine, who is a long-time observer of Mr Buffett, believes his last public comments, made in February, indicate an unprecedented level of bearishness on his part. Of course, Mr Buffett could be buying aggressively behind the scenes. But more likely – given an absence of any public deal-making on his part, despite the number of distressed sectors and companies that need a cash injection – there is little out there that he likes the look of at the moment.
There could be more pain to come, particularly as quick government action means banks are very liquid right now. The question is whether that support can continue as the crisis rolls on into the summer months, with the political landscape in the US so fractious.
A nurse helps a patient using the Decathlon snorkeling face mask in the Covid-19 ward of the Maria Pia Hospital in Turin. AFP
US military personnel wearing face masks arrive at the Jacob K. Javits Convention Center in the Manhattan borough of New York City, New York, US. Reuters
A patient suffering from coronavirus uses a tablet to speak to a relative who is unable to visit, at the Cernusco sul Naviglio hospital in Milan, Italy. Reuters
Members of the cleaning staff disinfect a room at a hotel in Belo Horizonte, Brazil, which continues to operate despite the coronavirus pandemic. AFP
Neighbours celebrate the engagement of Juan Manuel Zamorano, 32, and Elena Gonzalez, 31, after she proposed to him at the balcony of their house in downtown Ronda, southern Spain. Reuters
Japan's Prime Minister Shinzo Abe delivers a report to committee members of the Lower House in Tokyo on April 7, 2020 before declaring a state of emergency. AFP
Elementary school students wearing face masks attend a class as they return to school after the start of the term was delayed in Huaian in China's eastern Jiangsu province. AFP
Signs made by prisoners pleading for help are seen on a window of Cook County Jail in Chicago, Illinois, US. Reuters
Giant pandas Ying Ying and Le Le before mating at Ocean Park in Hong Kong. Stuck at home with no visitors and not much else to do, a pair of pandas in Hong Kong finally decided to give mating a go after a decade of dodging the issue. AFP
A woman enters a shopping mall partially closed to combat the spread of coronavirus, in Bangkok. AFP
Children queue with their jerrycans to fill them with free water distributed by the Kenyan government at Kibera slum in Nairobi, Kenya. AFP
Women shop at a market after the Peruvian government limited men and women to alternate days for leaving their homes, in an attempt to slow the spread of coronavirus, in Lima, Peru. Reuters
A police officer sprays disinfectant on a traveller outside Hankou Railway Station after travel restrictions to leave Wuhan were lifted. Reuters
A healthcare worker sits on the curb as he uses a vaping device while taking a break outside Maimonides Medical Center during the outbreak of coronavirus in the Brooklyn borough of New York City, New York, US. Reuters
Medical workers from The First Bethune Hospital of Jilin University hug their Wuhan colleagues at the airport as they prepare to leave after the lockdown was lifted, in Wuhan, China. EPA
Employees of Suay Sew Shop make face masks amid the coronavirus pandemic in Los Angeles, California, USA. EPA
The consequences of 2008 and 2009 set a course that has brought us to the extreme polarisation that we have witnessed in recent years.
There may already have been a complete erosion of common ground in Washington in a presidential election year. Any will to act together to keep supporting the economy may have been burned up last month with the passage of a $2 trillion stimulus bill in the US Congress.
Still, the current scenario has already matched the scale of the financial crash of 2008, with trillions of dollars in market capitalisation swept away. The sudden-stop and unique nature of the pandemic's impact is already showing through in dire economic forecasts and employment data with millions more Americans now jobless.
A decade ago, the actions of governments and central banks to pump liquidity into the financial system actually precipitated a historic bull-run in equities. Yet, the situation still needed the likes of Mr Buffett in order to act to avert further damage. Perhaps this time around, Mr Buffett is not as confident of a repeat of that level of recovery.
Would he warn investors if he is feeling so pessimistic? He is oft-quoted for his sage advice to think long-term and to be wary of those companies that may not be all that they seem when times are good.
Where is his guidance now during these most troubled times? Should we take his silence as a message in itself?
Next month, Berkshire will hold its annual meeting virtually. Mr Buffett and his erstwhile partner Charlie Munger are likely to offer their views, which may not be quite as comforting as we might hope.
Mustafa Alrawi is an assistant editor-in-chief at The National
In numbers: China in Dubai
The number of Chinese people living in Dubai: An estimated 200,000
Number of Chinese people in International City: Almost 50,000
Daily visitors to Dragon Mart in 2018/19: 120,000
Daily visitors to Dragon Mart in 2010: 20,000
Percentage increase in visitors in eight years: 500 per cent
Cast: Benedict Cumberbatch, Elizabeth Olsen, Chiwetel Ejiofor, Benedict Wong, Xochitl Gomez, Michael Stuhlbarg and Rachel McAdams
Rating: 3/5
The burning issue
The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.
Name: Thndr Started: 2019 Co-founders: Ahmad Hammouda and Seif Amr Sector: FinTech Headquarters: Egypt UAE base: Hub71, Abu Dhabi Current number of staff: More than 150 Funds raised: $22 million
More than 2.2 million Indian tourists arrived in UAE in 2023 More than 3.5 million Indians reside in UAE Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
AI traffic lights to ease congestion at seven points to Sheikh Zayed bin Sultan Street
Over 500 Gazans have been evacuated to France since November 2023
Evacuations were paused after a student already in France posted anti-Semitic content and was subsequently expelled to Qatar
The Foreign Ministry launched a review to determine how authorities failed to detect the posts before her entry
Artists and researchers fall under a programme called Pause that began in 2017
It has benefited more than 700 people from 44 countries, including Syria, Turkey, Iran, and Sudan
Since the start of the Gaza war, it has also included 45 Gazan beneficiaries
Unlike students, they are allowed to bring their families to France
GOLF’S RAHMBO
- 5 wins in 22 months as pro
- Three wins in past 10 starts
- 45 pro starts worldwide: 5 wins, 17 top 5s
- Ranked 551th in world on debut, now No 4 (was No 2 earlier this year)
- 5th player in last 30 years to win 3 European Tour and 2 PGA Tour titles before age 24 (Woods, Garcia, McIlroy, Spieth)
Nigel Farage told Reform's annual conference that the party will proscribe the Muslim Brotherhood if he becomes Prime Minister. "We will stop dangerous organisations with links to terrorism operating in our country," he said. "Quite why we've been so gutless about this – both Labour and Conservative – I don't know. “All across the Middle East, countries have banned and proscribed the Muslim Brotherhood as a dangerous organisation. We will do the very same.” It is 10 years since a ground-breaking report into the Muslim Brotherhood by Sir John Jenkins. Among the former diplomat's findings was an assessment that “the use of extreme violence in the pursuit of the perfect Islamic society” has “never been institutionally disowned” by the movement. The prime minister at the time, David Cameron, who commissioned the report, said membership or association with the Muslim Brotherhood was a "possible indicator of extremism" but it would not be banned.
If you go: The flights: Etihad, Emirates, British Airways and Virgin all fly from the UAE to London from Dh2,700 return, including taxes The tours: The Tour for Muggles usually runs several times a day, lasts about two-and-a-half hours and costs £14 (Dh67) Harry Potter and the Cursed Child is on now at the Palace Theatre. Tickets need booking significantly in advance
Entrance to the Harry Potter exhibition at the House of MinaLima is free The hotel: The grand, 1909-built Strand Palace Hotel is in a handy location near the Theatre District and several of the key Harry Potter filming and inspiration sites. The family rooms are spacious, with sofa beds that can accommodate children, and wooden shutters that keep out the light at night. Rooms cost from £170 (Dh808).
Moon Music
Artist: Coldplay
Label: Parlophone/Atlantic
Number of tracks: 10
Rating: 3/5
What sanctions would be reimposed?
Under ‘snapback’, measures imposed on Iran by the UN Security Council in six resolutions would be restored, including:
An arms embargo
A ban on uranium enrichment and reprocessing
A ban on launches and other activities with ballistic missiles capable of delivering nuclear weapons, as well as ballistic missile technology transfer and technical assistance
A targeted global asset freeze and travel ban on Iranian individuals and entities
Authorisation for countries to inspect Iran Air Cargo and Islamic Republic of Iran Shipping Lines cargoes for banned goods
Etihad (Etihad.com), Emirates (emirates.com) and Air France (www.airfrance.com) fly to Paris’ Charles de Gaulle Airport, from Abu Dhabi and Dubai respectively. Return flights cost from around Dh3,785. It takes about 40 minutes to get from Paris to Compiègne by train, with return tickets costing €19. The Glade of the Armistice is 6.6km east of the railway station.
Staying there
On a handsome, tree-lined street near the Chateau’s park, La Parenthèse du Rond Royal (laparenthesedurondroyal.com) offers spacious b&b accommodation with thoughtful design touches. Lots of natural woods, old fashioned travelling trunks as decoration and multi-nozzle showers are part of the look, while there are free bikes for those who want to cycle to the glade. Prices start at €120 a night.
Employees leaving an organisation are entitled to an end-of-service gratuity after completing at least one year of service.
The tenure is calculated on the number of days worked and does not include lengthy leave periods, such as a sabbatical. If you have worked for a company between one and five years, you are paid 21 days of pay based on your final basic salary. After five years, however, you are entitled to 30 days of pay. The total lump sum you receive is based on the duration of your employment.
1. For those who have worked between one and five years, on a basic salary of Dh10,000 (calculation based on 30 days):
a. Dh10,000 ÷ 30 = Dh333.33. Your daily wage is Dh333.33
b. Dh333.33 x 21 = Dh7,000. So 21 days salary equates to Dh7,000 in gratuity entitlement for each year of service. Multiply this figure for every year of service up to five years.
2. For those who have worked more than five years
c. 333.33 x 30 = Dh10,000. So 30 days’ salary is Dh10,000 in gratuity entitlement for each year of service.
Note: The maximum figure cannot exceed two years total salary figure.
The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.
