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Warren Buffett Does It Again!

buffettdesk_largeDuring a recent interview with CNBC, The Oracle of Omaha, Warren Buffett, mentioned what is probably the quote of the week.

He quipped: “It takes 20 years to build a reputation and 20 minutes [sic] to ruin it… A great reputation is like virginity. It can be preserved but not restored very easily.”

This drew laughter from the audience who were present. He said this on the back of the breakdown of the debt-ceiling talks, which has just been resolved but only temporarily.

Many investors trust the United States government to fulfil its obligations. But if people lose faith in the US government then the repercussions may be catastrophic. Buffett went on to say, “To even play around with the idea is just totally irresponsible, and I think it should be banned from the arsenal of both parties.”

Buffett hit the proverbial nail when he added the following (emphasis added):“Charlie Munger, my partner, and I work together now for 54 years, we have made a lot of decisions on buying businesses… in the conversations that accompany those decisions, neither one of us have ever once brought up anything of macro nature. Period. It just doesn’t make any difference. I don’t know what’s going to happen next week or next month or next year. I know what’s going to happen over 10 or 20 years.

Businesses such as Soup Restaurant (SGX: 5KI), Raffles Medical (SGX: R01) and Sheng Siong (SGX: OV8) should still see patrons despite the problems in the US. People craving for Soup Restaurant’s Samsui Ginger Chicken are still going to patronise the restaurant.

Patients will still be trotting up to Raffles Medical’s clinics for treatments and grocery shopping will still be done at Sheng Siong. The decisions made by these groups of people would not be affected just because the politicians in the US are at loggerheads.

As the saying goes, “Economists predicted 10 of the last 5 recessions.” Predicting macroeconomic events is futile since there are so many variables that come into play. We should instead focus our energy on the business fundamentals of the stocks we buy and decide what the business will be doing five, 10 and 20 years into the future.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice.  Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.