Warren Buffett says the pandemic has had an ‘extremely uneven’ impact and is not yet over

Legendary investor Warren Buffett said the economic consequences of the pandemic are falling disproportionately on small businesses and the unpredictability of Covid-19 is far from over. “The economic impact has been this extremely uneven thing where … many hundreds of thousands or millions of small businesses have been hurt in a terrible way, but most of the big companies have overwhelmingly done fine,” the Berkshire Hathaway CEO said during an interview with Becky Quick on CNBC’s special “Buffett & Munger: A Wealth of Wisdom,” which aired Tuesday.

In March 2020, the pandemic cut a deadly swath across America, which led to a shutdown of a $20 trillion economy in full swing. Thousands of small businesses were forced to close their doors while big-box retailers and e-commerce giants took in those customers. Gross domestic product for the first quarter last year dropped 31.4%, which was unprecedented in post-Great Depression America.

“It’s not over,” the 90-year-old investor said. “I mean, in terms of the unpredictability … it’s been very unpredictable, but it’s worked out better than people anticipated for most people and most businesses. And it’s just, for no fault of their own, it’s just decimated all kinds of people and their hopes.” For some businesses like auto dealers, the pandemic even brought on windfall profits, said Charlie Munger, vice chairman of Berkshire and Buffett’s longtime business partner. “It didn’t create just a return to normal; it created fabulous success they didn’t anticipate,” Munger said. “The auto dealers are coining money that they wouldn’t have had except for the pandemic.” Due to factory shutdowns and a global shortage of semiconductors, automakers and dealers have experienced surging, if not record, profits and even selling vehicles before they arrive at dealerships.

Buffett said the biggest lesson he learned from the unprecedented pandemic is how ill-prepared the world can be for emergency situations that are bound to happen.

Warren Buffett says the pandemic has had an ‘extremely uneven’ impact and is not yet over, CNBC, Jul 1