Home Forums Members Forum Warren Buffett Cash Reply To: Warren Buffett Cash

Sean HymanSean Hyman
Keymaster
Post count: 3448

Why would we worry about inflation? We own assets that benefit from inflation.

Who loses from inflation? Those that are only consumers and only savers, but not investors. Your investments going up, far outweigh the erosion of purchasing power of the cash. Then, then the cash is deployed strategically through averaging down, it allows for bigger outsized gains than you’d normally get.

So do I worry about inflation? No. If I were only a spender/consumer and only a saver (but not additionally an investor) then yes, I’d be terrified.

Hyperinflation is rare. It tends to happen more in more unstable economies, unstable currencies, etc. If we got hyperinflation…that would only “inflate” our assets higher.

The stimulus checks are a “tip”…just enough cash to keep Americans for revolting in mass due to their jobs being taken our their paychecks being reduced.

If Buffett were worried about the effects of inflation on his cash, he wouldn’t have $147 billion in cash right now. He knows that his present investments PLUS the advantage of strategic investing that cash gives, gives far higher returns than the depreciation of the cash itself.

So, regular investors think about it all wrong and they need to think about it more like Warren Buffett.