Warren Buffett is likely to load up on cheap stocks as other investors panic in 2023, Elon Musk says
- Warren Buffett is likely go on a stock-buying spree in 2023, Tesla CEO Elon Musk says.
- The investor might pounce on high-quality companies while markets are in panic mode, Musk says.
Warren Buffett is likely to capitalize on the market chaos and load up on cheap stocks in 2023, Elon Musk says.
"I suspect Warren Buffett is going to be buying a lot of stock next year," the Tesla, SpaceX, and Twitter CEO said in a Twitter Spaces conversation with Whole Mars Catalog on Thursday.
"If a company has very strong fundamentals, but then the market is doing some short-term panic situation, obviously that's the the right time to buy stock," Musk added.
Buffett, the CEO of Berkshire Hathaway, specializes in identifying undervalued, high-quality businesses and investing in them for the long term. For example, Berkshire spent $1.3 billion for a stake in American Express worth $22 billion now, and another $1.3 billion on Coca-Cola stock valued at $25 billion today.
The legendary investor is also known for pouncing during periods of turmoil. He struck lucrative deals with Goldman Sachs, General Electric, and other ailing companies during the financial crisis.
Moreover, he's spent a record $70 billion or so on stocks and acquisitions this year, as historic inflation, soaring interest rates, and recession fears have roiled markets.
Musk, who fears a combination of higher rates and an economic downturn could hit demand for autos and drag down stocks, clearly believes the anxiety in markets will create buying opportunities for Buffett.
The Tesla chief has taken aim at Buffett in the past. He distanced himself from the investor in October, saying he makes products instead of building an investment portfolio. He's also proclaimed that he's not a huge fan of the investor, and views his role at Berkshire of studying company reports and allocating capital as "super boring."
Still, Musk has quoted the investor on earnings calls, while Buffett has praised Tesla's unlikely success and hailed Musk as a "remarkable guy."
The pair's most famous clash was in 2018, after Musk dismissed Buffett's concept of competitive moats around companies as "lame."
"Elon may turn things upside down in some areas. I don't think he'd want to take us on in candy," Buffett replied. Musk later tried and failed to formulate a candy that was far superior to the competition.