The late Charlie Munger and business partner Warren Buffett have long argued that economic momentum reliably outweighs the perceived turmoil of changing political regimes. Throughout an investing career spanning equal numbers of Republican and Democratic presidents, the market endured presidential resignations, an assassination, and near-nuclear conflicts. Crucially, per capita gross domestic product surged to six times its initial level over Buffett's lifetime despite persistent warnings of ruin.
Key points
National economic growth consistently persists over the long run regardless of which poli…: National economic growth consistently persists over the long run regardless of which political party holds power in Washington.
Public anxiety that current political divisions are unprecedented often overlooks histori…: Public anxiety that current political divisions are unprecedented often overlooks historical disruptions and past flawed leadership.
Long-term investors look past short-term midterm election shifts that threaten to alter c…: Long-term investors look past short-term midterm election shifts that threaten to alter congressional control over economic grievances.
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In 2018, the US midterm elections saw Donald Trump-led Republicans expand their majority in the Senate, while Democrats took control of the House of Representatives. At Berkshire Hathaway’s annual shareholder meeting that year, Buffett was asked about the growing political divide in the US and its implications for the country's future.
“Multiple times in my life, people have felt the country was more divided than ever,” the market veteran said. He noted that since his young venture into the stock market at the age of 11, he has lived under 14 out of the 44 Presidents US has had. As of now, the count stands at around 16 Presidents, including Joe Biden's term (2021-2025) and Trump's ongoing second Presidency.
“And 14 of the 44 have been during this period when that $10,000 became 51 million. Seven have been Republicans, seven have been Democrats. One has been assassinated, one has resigned under pressure,” Buffett said at the shareholders’ meeting.
Also read | Warren Buffett’s 6 golden rules for investors after retirement
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