Apr 202020

I am quoted in this U.S. News & World Report/WTOP article:

This is not another Great Depression.

This health crisis “is a once-in-a-century event that the world has not experienced since the Spanish flu of 1918,” says David Kass, clinical professor of finance at the University of Maryland’s Robert H. Smith School of Business. Fortunately, the U.S. entered the crisis with a strong economy and banking system. Kass predicts “the stock market and the economy will start to recover as soon as the number of new cases declines sharply,” likely with the “development of therapeutic treatments by the end of the summer.” But the economy won’t fully recover until there’s a vaccine, which could be two years away. While the duration of the health crisis remains unknown, he says it “is definitely not another Great Depression.”



 Posted by at 8:55 pm
Apr 172020

From Jason Zweig’s Wall Street Journal column published this morning:  Warren Buffett and Charlie Munger are NOT buying now.  They are waiting for the storm to pass.  This explains the silence from Warren Buffett.  They are being cautious with Berkshire’s large cash position and are as uncertain about the outcome of this pandemic as anyone else.

Charlie Munger: “Nobody in America’s ever seen anything else like this.”This thing is different. Everybody talks as if they know what’s going to happen, and nobody knows what’s going to happen.” (Note: Munger was born in 1924 and was a teenager during the Great Depression of the 1930’s. Warren Buffett was born in 1930 and also lived through the Great Depression.)

He added, “I don’t think we’ll have a long-lasting Great Depression. I think government will be so active that we won’t have one like that. But we may have a different kind of a mess. All this money-printing may start bothering us.”

“I don’t think we know exactly what the macroeconomic consequences are going to be,” said Mr. Munger. “I do think, sooner or later, we’ll have an economy back, which will be a moderate economy. It’s quite possible that never again—not again in a long time—will we have a level of employment again like we just lost. We may never get that back for all practical purposes. I don’t know.”

 Posted by at 11:42 am