Warren Buffett, America’s best-known investor, has plenty of cash. But the 88-year-old is struggling to spend it.
“It’s very, very, very hard to make deals in a world where you’ve got $1trn-plus of money, plus just the normal animal spirits of corporate leaders and everything else, and accessibility to extraordinarily cheap money.” Competition from profligate private-equity funds, rolling in cheap money, leaves fewer appealing opportunities for choosier investment vehicles, such as his own Berkshire Hathaway.
But the good times will return, says Buffett. “People get smarter, but they don’t get wiser. They don’t get more emotionally stable.
All the conditions for… extreme overvaluation or undervaluation… exist, the way they did 50 years ago. You can teach all you want to the people… but when they’re scared, they’re scared.” When they are, and money is short, Berkshire will be there. “We will get the calls again. This is a place that can commit $10bn or… $30bn, and it’s done.”
As well as this week’s deal involving US oil giant Occidental’s takeover of rival Anadarko (see page 10), Buffett has also spoken of spending more outside the US, and in the UK in particular – despite Brexit (see picture). “We welcome the chance to put money out any place where we think we understand and sort of trust the system. We’re never going to understand any other culture or the tax laws or customers as well as the US, but we can come awfully close in Britain.”