Warren Buffett recommends American investing in his recent interview where he recalls a 2023 Berkshire Hathaway slide presentation, the last made with the late Charlie Munger VP.
American companies dominate the top 20 list as the world’s most valuable companies.
“I ran off a list of the 20 largest companies in the world by stock market value, and at the top of the list is Apple, valued at two Trillion US dollars. In March of 2023, the 20th largest company on the list was worth about 330 Billion US dollars.
“I ran off a list of the 20 largest companies in the world by stock market value, and at the top of the list is Apple, valued at two Trillion US dollars”
WARREN BUFFETT
Out of the top six companies, five are American, as Warren Buffett recommends American investing
“In 1790, we had 0.5 per cent of the world’s population with 4 million people and 600,000 slaves.
Ireland had more people than the US.
Russia had five times as many people as the US.
Ukraine had twice as many people as the US,” said Warren Buffett.
“What did we have?”, he asked.
Warren Buffett recommends American investing due to a national spirit of self-improvement, ambitions, and strong work ethics
“We had a map for the future, an aspirational map that 234 years later leaves us with five of the top six most valuable companies in the world,” he said.
Warren Buffett believes American success is no coincidence, nor does he think people were more intelligent, physically stronger or had better soil and a good climate.
Other countries had all the above and did not create the world’s most valuable companies.
“We had a map for the future, an aspirational map that 234 years later leaves us with five of the top six most valuable companies in the world”
WARREN BUFFETT
People adapting and changing in challenging times could be another reason why Warren Buffett recommends American investing
He noted that none of the top 20 companies on the list in 1989 featured on the list today.
“General Electric, Exon, and IBM were among the top companies in 1989 and made it to the list in 2024,” he said.
“Japan had a long bull market, so several Japanese companies were on the list in 1989.
Today, there are no Japanese companies, and the US had 6, now we have 13,” he said.
“The largest company in the world was worth 100B in 1989, and today it is worth 2 trillion,” he added.
“This tells you a bit about inflation, and capitalism has worked incredibly well, particularly for the capitalist,” said Warren Buffett.
“My view is never bet against America that is as true as it was in 1789 as it is today” – Warren Buffett
Get on board the ship; Warren Buffett recommends American investing
“US index funds were all going to the promised land, and you would do well by having a diversified group of equities over 30 years,” he said.
It is tricky to pick winning stocks, so Warren Buffett recommends buying stock index funds.
Warren Buffett believes that the Great Depression of the 30s lasted a long time in people’s minds because of bank closures and millions losing their savings. He thinks FDIC insurance on savings deposits was something positive, coming out of the 30s Depression.
Warren Buffett noted that at the beginning of 1954, the Dow was only at 280 and slightly more than 400 at the end of the year.
“People were asking is this 1929 all over again,” he said.
But he noted that the market produced 100 dollars for every dollar invested since then.
“My view is never bet against America that is as true as it was in 1789 as it is today,” he said.
