Warren Buffett is telling investors not to worry about Fitch’s downgrade of its U.S. credit rating to AA+ from AAA, saying the decision has no impact on his own investment decisions.
Speaking to CNBC and talking about his holding company Berkshire Hathaway (BRK.A / BRK.B), Buffett said: “Berkshire bought $10 billion in U.S. Treasurys last Monday. We bought $10 billion in Treasurys this Monday. And the only question for next Monday is whether we will buy $10 billion in three-month or six-month T-bills.”
Referring to other investors, Buffett said: “There are some things people shouldn’t worry about. This is one.”
Stock markets around the world sold off heavily after Fitch lowered its rating on the U.S. citing concerns about fiscal deterioration, debt burden, and an erosion of governance.
The technology-laden Nasdaq index fell 2.17% on news of the rating downgrade, while the benchmark S&P 500 index declined 1.4%. Futures markets are pointing to continued declines today (August 3).
However, Buffett sought to reassure investors, saying his own views on U.S. Treasuries and the American dollar have not changed because of the credit rating downgrade.
“The dollar is the reserve currency of the world, and everybody knows it,” said Buffett.
Warren Buffett is arguably the most successful investor of all time. His holding company Berkshire Hathaway owns diverse businesses ranging from GEICO insurance to the BNSF Railway.
Berkshire Hathaway also operates a stock portfolio that is currently worth more than $375 billion U.S., with major stakes in companies such as Apple (AAPL) and Coca-Cola (KO).
The Class B stock of Berkshire Hathaway has increased 19% over the last 12 months to trade at $351.19 U.S. per share.
