Warren Buffett Sees Right Through Trump’s Tariffs

By Douglas A. McIntyre Published Apr 29, 11:00AM EDT

Quick Read

Warren Buffett’s investment philosophy emphasizes long-term holdings in companies with strong competitive moats, such as Coca-Cola (NYSE: KO), American Express (NYSE: AXP), and Apple (NASDAQ: AAPL)
Buffett prioritizes corporate reputation above short-term financial losses, reinforcing his long-term, trust-based approach to managing Berkshire Hathaway (NYSE: BRK.B).
Berkshire Hathaway has outperformed the broader market in recent years, maintaining gains even during downturns, underscoring the resilience of Buffett’s strategy.

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Warren Buffett Sees Right Through Trump’s Tariffs — © 24/7 Wall St

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Transcript:

[00:00:04] Doug McIntyre: Yesterday I was on YouTube, which I shouldn’t be on, but I want it all the time.

[00:00:10] Doug McIntyre: And, Charlie Munger was on there giving dishing out advice. Warren Buffett’s partner, who’s I think been probably dead a year. but everybody in the industry has a favorite Charlie Munger quote or Warren Buffett quote. what are some of the Buffett quotes that you love?

[00:00:29] Lee Jackson: Well, one of the favorite, and we often, include this when we write on Buffett, is his favorite holding time for an S&P 500 stock is forever.

[00:00:41] Lee Jackson: And as you and I both know, that’s the case with names that he’s had like Coca-Cola. And somebody American Express that he’s had for 10, 15, 20 years. And I always thought that was a great quote. My, my favorite holding time is forever. And I think one of the most interesting quotes recently, and he kind of stayed out.

[00:01:04] Lee Jackson: He says even though he kind of tends to vote Democrat, he stays outta the political fray for the most part. But he started talking about tariffs, and he was basically getting into the whole point of tariffs are basically attacked and they’re just attacks on goods. And the quote that I loved when he goes the tooth fairy isn’t gonna pay that tax.

[00:01:29] Lee Jackson: And I’m like, okay, probably not. But, when you have a guy like that who’s so widely followed and so widely recognized, as likely the greatest investor of the last 50 or 60 years, he is gonna be a quotable guy. We’ve constantly written about him. And the interesting thing for our viewers and of course our 24 7 readers, is that even though the markets have come back some from the lows, Berkshire Hathaway has been up all year long. And even when the markets were down at bare lows, 20% lows, it was still up 9% for the year. So, yeah, I think the best holding time is forever for an S&P 500 stock.

[00:02:15] Doug McIntyre: Well, one of the reasons I love that quote is. It’s because he likes stocks with a moats. There’s, when he goes into one of these stocks, I think the first thing he looks at, other than obviously earnings, is how hard is it for somebody else to get into this business? Right? Do you want try to compete with Coke from scratch?

[00:02:38] Doug McIntyre: Impossible, absolutely impossible. American from scratch. A big oil company from scratch. Impossible. He held, he still holds Apple, but I mean, he bought a whole bunch of it. You wanna try to compete with Apple from scratch. He loves these companies where he knows that the chances that somebody can come in and compete with directly with him is very low.

[00:03:04] Doug McIntyre: I mean, he’s in the railroad business. It used to be public now, he just decided he is gonna take the whole thing private. But it’s the same philosophy. Do you wanna try to compete with, are you gonna build the tracks, buy the engines, hire the answer is no. So my favorite Buffett quote, and I won’t get this exactly right, is every two years he sends out the managers of all of his companies a letter, and he says, it’s okay if you lose money.

[00:03:33] Doug McIntyre: We can afford to lose money. Obviously I don’t want you to lose it forever. but we can’t afford to lose a shred of reputation. He said, I absolutely money that’s fixable. But the day, and he said, I wanna make sure that a fair but unfriendly reporter can do a story about us on the front of the Wall Street Journal and our reputation will be intact.

[00:03:59] Doug McIntyre: Yeah. That’s another thing Buffett understands is that, and one of the great examples is Johnson and Johnson (NYSE: JNJ | JNJ Price Prediction), when there was that scare about Advil. Right. Okay. That was a long time ago, but you remember, Burke, who was the CEO then took every single bottle off every single shelf of cattle in the country.

[00:04:22] Doug McIntyre: And you talk about reputation protection, and I mean, that’s one of Buffett’s philosophies is its reputation.

[00:04:31] Lee Jackson: Well, and I think, are you sure you don’t mean the Tylenol scare? Was it Tylenol or Advil? Tylenol. It was Tylenol, and at first you’re right about Advil, they did pull that a few years back on concerns over liver toxicity.

[00:04:47] Lee Jackson: But the one you remember is when J&J, Tylenol’s owned now by Kenvue, which was the spinoff in 23 from J&J. But when that all happened, and gosh, that’s been 30, 40 years ago. Yeah, it was in the eighties, I think. But you’re right, they took every single bottle of Tylenol and it was all taken off the market because people died. And, yeah, that’s the way you save your rep.

[00:05:16] Lee Jackson: And not that Johnson and Johnson hasn’t had enough issues with the baby powder and the talcum powder and all that stuff. They’re fixing to have to, they’re trying to get that settled out.

[00:05:26] Doug McIntyre: Yeah. Anyway, Buffett number one, hold my stocks forever. Number two, reputation,

[00:05:34] Lee Jackson: And number three, tariffs are nothing more than a tax, and they’re not paid for by the tooth fairy.

[00:05:40] Doug McIntyre: Yeah. And the tax thing is absolutely right.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.