Berkshire Hathaway’s Warren Buffet – “Some people should not own stocks at all”

Speaking to CNBC on Friday, Berkshire Hathaway Chairman Warren Buffett said that “some people should not own stocks at all,” because they get easily rattled with price fluctuations, like this week’s stock market crash.

 “If you’re going to do dumb things because your stock goes down, you shouldn’t own a stock at all,” the 94-year-old billionaire reckoned.

His sentiments came on the same day US stock markets experienced a $3.5 trillion wiped off, after China issued retaliatory tariffs in response to President Donald Trump’s April 2 trade policy changes.

Buffett says it is a bad idea to sell when stock prices fall

According to CNBC market data, the Dow Jones Industrial Average plummeted by 2,231 points, a 5.5% drop, pushing the index into correction territory, defined as a decline of 10% or more from its most recent peak.

The S&P 500 shed nearly 6% and lost more than $6 trillion in market value over the past two trading days, its worst two-day performance since the early stages of the COVID-19 pandemic. The Nasdaq Composite was also bearish, falling more than 20% from its December high and closing below that threshold for the first time since 2022.

On global markets, MSCI’s global index of equities dropped 5.37%, posting its largest weekly decline since 2020. Oil markets also took a beating, with Brent crude futures down 6.5% to $65.58 per barrel, and U.S. crude falling 7.4% to $61.99, both hitting their lowest levels in over three years.

The downturn followed a job report showing that the US economy added 228,000 jobs in March, well above the 135,000 market prediction. Still, this positive labor news failed to offset investor fears around a foreseeable economic fallout from President Trump’s tariffs.

But Buffett, known for his long-term value investing approach, wants investors to view stock ownership as a stake in a business. He advised equity investors to not tap out when daily price swings lean towards the negatives.

“If you buy your house at $20,000 and somebody comes along the next day and says, I’ll pay you $15,000, you don’t sell it because of that,” he explained. “You look at the house or whatever it may be. But some people are not emotionally or psychologically fit to own stocks.”

He further explained that the longer someone holds stocks, the less risky they become, and bonds grow riskier as their maturity extends.

Berkshire Hathaway shares, much like the rest of the stock market, closed Friday’s session down by over 6%. However, the company, which last year sold a net $134.1 billion in equities and boosted its cash reserves to $334.2 billion, has experienced a 9.41% share price uptick year-to-date.

No recession possibility, Fed chair Powell insists

During his speech at a conference in Arlington, Virginia, Federal Reserve Chair Jerome Powell said Trump’s tariffs are likely to fuel higher inflation and slower economic growth.

“These new tariffs are larger than expected,” Powell said. “The economic fallout, including higher inflation and slower growth, likely will be as well.”

The Fed official admitted that several private-sector forecasts are leaning towards the possibility of a US recession. Investment bank JP Morgan recently increased its probability of a global recession by year-end to 60%, up from 40%.

Peter Cardillo, chief market economist at Spartan Capital Securities, said Powell’s comments likely disappointed investors hoping for near-term central bank intervention.

“I think his comments will be disappointing for those who believe that the Fed is going to step in anytime soon,” Cardillo said.

Yet, the US dollar regained some strength following Thursday’s decline, with the dollar index rising 0.6% on Friday. The euro slipped 0.63% to $1.10976, reversing much of its 1.8% gain a day earlier, its largest single-day increase since November 2022. Against the Japanese yen, the dollar rose 0.58% to 146.9.

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