Warren Buffett. Getty Images / Bill Pugliano Warren Buffett knows better than to make predictions. "We have no idea -- and never have had -- whether the market is going to go up, down, or sideways in the near- or intermediate-term future," the famed investor wrote in his 1986 letter to Berkshire Hathaway shareholders.Yet the so-called Oracle of Omaha couldn't resist making a few guesses about the future over the years. We've gathered 12 of his most intriguing predictions and assessed their accuracy below.
A collection of Bitcoin (virtual currency) tokens are displayed in this picture illustration Thomson Reuters Prediction:"In terms of cryptocurrencies generally, I can say almost with certainty that they will come to a bad ending," Buffett told CNBC in January 2018. "Now, when it happens or how or anything else, I don't know. "He added: "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. "Outcome:If Buffett had placed a five-year bet against bitcoin at the time of his interview, it wouldn't be too far from paying off. Bitcoin soared from around $14,000 in January 2018 to north of $60,000 in November 2021, but has plunged since then to around $17,000.
A Berkshire Hathaway shareholder poses with a likeness of Berkshire CEO Warren Buffett at the shareholder's shopping day in Omaha, Nebraska May 1, 2015. REUTERS/Rick Wilking Prediction:"It is fitting that the visit of Halley's Comet coincided with this percentage gain: neither will be seen again in my lifetime," Buffett told Berkshire shareholders in 1985 after the conglomerate grew its net worth by 48.2%.He 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. "Outcome:It took nearly 15 years for Buffett to prove himself wrong on the first count. Berkshire's net worth jumped by 48.3% in 1998, though that was largely because the company issued shares for acquisitions. "Normally, a gain of 48.3% would call for handsprings -- but not this year," he told investors.Buffett's second prediction was way off the mark.
Berkshire's per-share book value rose by 23.3% in 1986. It has also grown by at least 23.2% in more than 10 other years since 1985. GEICO / Facebook Prediction:"We expect to keep permanently our three primary holdings, Capital Cities/ABC, Inc., Geico Corporation, and The Washington Post," Buffett told Berkshire shareholders in his 1986 letter..
Berkshire sold its stake in Capital Cities/ABC to The Walt Disney Company in 1996 in a cash-and-stock deal worth $2.5 billion.He also flogged his company's 28% stake in The Post to Graham Holdings in a transaction worth more than $1.1 billion in 2014. The Graham family sold The Post to Amazon CEO Jeff Bezos in a $250 million deal in 2013.While Berkshire still owns Geico and See's Candies, it sold The Buffalo News and its other newspapers for $140 million to publisher Lee Enterprises in 2020. Prediction:"In 1988 we made major purchases of Federal Home Loan Mortgage Pfd.
('Freddie Mac')," Buffett told Berkshire shareholders in his letter that year. "We expect to hold these securities for a long time. In fact, when we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever. "Outcome:Luckily for Buffett, he changed his mind. Berkshire sold nearly all its Freddie Mac and Fannie Mae shares in 2000, slashing its holding to 0.3% from 8.6% in 1999.
Buffett told the Financial Crisis Inquiry Commission in 2010 that he had become "concerned" about the companies' management. "They were trying to and proclaiming that they could increase earnings per share in some low double-digit range or something of the sort," he said. "And any time a large financial institution starts promising regular earnings increases, you're going to have trouble, you know?" Rick Wilking/Reuters Prediction:"No sensible observer -- not even these companies' most vigorous competitors, assuming they are assessing the matter honestly -- questions that Coke and Gillette will dominate their fields worldwide for an investment lifetime," Buffett wrote in his 1996 letter to Berkshire shareholders. "Indeed, their dominance will probably strengthen. Both companies have significantly expanded their already huge shares of market during the past 10 years, and all signs point to their repeating that performance in the next decade. "Outcome:Buffett's claims have proved sound so far: Both Coke and Gillette remain the biggest players in their markets, though the latter is under mounting pressure.Coca-Cola's share of the US soft-drinks market grew from an estimated 41% in 1991 to 46% in 2021, according to The New York Times and Statista.In contrast, Gillette's market share fell from about 70% in 2010 to 53% in 2018, reflecting fierce competition from startups including the Unilever-owned Dollar Shave Club and Harry's, according to a Euromonitor report cited by CNBC.
REUTERS/Rick Wilking Prediction:"Over a ten-year period commencing on January 1, 2008, and ending on December 31, 2017, the S&P 500 will outperform a portfolio of funds of hedge funds, when performance is measured on a basis net of fees, costs, and expenses," Buffett predicted.He posted the above prediction on Long Bets, a website for making long-term wagers and nominating charities to receive the winnings..
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