The Oracle of Omaha, Warren Buffett, is regarded as one of the most successful and influential business icons ever. He is known for his investment prowess, unique personal values and management style.
Buffett is renowned for his unassuming and straightforward approach to business and investing. His focus on long-term vision and the creation of value serves as a hallmark of his philosophy.
Buffett has offered some exciting predictions about cryptocurrencies, housing, and even his death. Let’s delve into some of these predictions and evaluate their accuracy.
In an interview with CNBC in 2018, Buffett once said, “In terms of cryptocurrencies generally, I can say almost with certainty that they will come to a bad ending. If I could buy a five-year put on every one of the cryptocurrencies, I’d be glad to do it, but I would never short a dime’s worth.”
Bitcoin has experienced remarkable growth from approximately $14,000 in January 2018 to well above $60,000 by November 2021. However, its value has since plummeted to around $17,000.
In 1985, after Berkshire grew its net worth by 48.2%, Buffett told the shareholders, “It is fitting that the visit of Halley’s Comet coincided with this percentage gain: neither will be seen again in my lifetime.”
As reported by the Insider, Buffett also predicted that the 23.2% compounded annual growth in the company’s per-share book value that year was “another percentage that will not be repeated.”
It took nearly 15 years for Buffett’s initial prediction to be disproven. In 1998, Berkshire’s net worth surged by 48.3%, primarily attributed to issuing shares for acquisitions, thereby challenging Buffett’s earlier assessment.
In his 2011 shareholder letter, Buffett assured investors that the housing market would recover after the U.S. housing bubble burst.
He expressed confidence, stating, “Housing will come back — you can be sure of that.” Buffett said, “We will again build one million or more residential units annually. I believe pundits will be surprised at how far unemployment drops once that happens.”
Buffett’s prediction regarding the revival of the housing market and employment proved accurate as the economy rebounded after the financial crisis.
According to the Commerce Department and Bureau of Labor Statistics, “Housing starts in the U.S. were tracking at a seasonally adjusted annual rate of about 1.4 million units in November. Unemployment has also fallen from 8.9% in 2011 to 3.7% in November .”
In his 2006 shareholder letter, Buffett disclosed his projected lifespan of approximately 12 years, while he said he is aiming for more.
If Buffett had to select a forecast that he would likely underestimate, it would probably be the projected lifespan mentioned in his letter. It’s been more than 15 years since his statement, and at 92 years old, Buffett continues to demonstrate good health and vitality.
In their 1999 shareholder letter, Buffett and his business partner Charlie Munger expressed a high level of confidence by labeling it a “virtual certainty” that the performance of the S&P 500 would be significantly less impressive in the coming decade or two compared to the period since 1982.
His prediction was correct. According to SlickCharts report, the S&P’s average total return of just over 19% from 1982 to 1999 would only last a while. The index returned an average of 1.2% over the next decade and 11.5% from 2010 to 2020.
Produced in association with Benzinga
Edited by Alberto Arellano and Jessi Rexroad Shull