July 01, 2021: -Legendary investor Warren Buffett said the economic consequences of the pandemic are falling disproportionately on small businesses, and the unpredictability of Covid-19 is not near to getting over.
“The economic impact has been this uneven thing where many hundreds of thousands or millions of small businesses have been hurt terribly, but most of the big companies have overwhelmingly have done fine,” the Berkshire Hathaway CEO said on CNBC that aired on Tuesday.
Last year, in March, the pandemic cut a deadly swath across America, which caused a shutdown of a $20 trillion economy in full swing. Thousands of small businesses were made to close their doors while big-box retailers and e-commerce giants took in those customers. As a result, last year, Gross domestic product for the first quarter dropped 31.4%, 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 decimated all kinds of people and their hopes.”
For some businesses such as auto dealers, the pandemic even brought on windfall profits, said Charlie Munger, vice chairman of Berkshire and Buffett’s 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,” Munger added.
Due to factory shutdowns and a global shortage of semiconductors, automakers and dealers have experienced wider, if not record, profits and even sold vehicles before they arrive at dealerships.
Berkshire Hathaway Automotive is one of the biggest dealership groups in America, with above 78 independently operated dealerships. The conglomerate also owns the BNSF Railway and NetJets, a private business jet charter and aircraft management company.