Warren Buffett: investors should ignore scary headlines

For all the worries about the spread of coronavirus, investors should ignore scary headlines, says Warren Buffett, America’s best-known investor. “Something else will be front and centre, six months from now, a year from now,” he tells Becky Quick on CNBC.

In his latest annual letter to shareholders in Berkshire Hathaway, Buffett’s investment vehicle, the 89-year-old writes that when evaluating how to respond to news events, or sharp falls in stockmarkets, “the real question is: ‘Has the ten-year or 20-year outlook for American businesses changed in the last 24 or 48 hours?’.” Given that you wouldn’t buy or sell your own business simply “on today’s headlines”, why sell shares in good firms?

Buffett also favours equities over bonds. “If something close to current rates should prevail over the coming decades and if corporate tax rates also remain near the low level businesses now enjoy, it is almost certain that equities will over time perform far better than long-term, fixed-rate debt instruments.”

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When asked for his views on the 2020 US presidential election, Buffett – who describes himself as a Democrat, tells Quick that while he agrees with Democratic candidate Bernie Sanders that “we ought to do better by the people who get left behind by our capitalist system, I don’t think we should kill the capitalist system in the process.” Instead, he says, he would support fellow billionaire Mike Bloomberg (pictured).