Did you know Warren Buffett and Anne Hathaway were in bed together?

I can hear and visualize a lot of people saying and thinking “Oh no, not another Warren Buffett story?” But there’s a lot that has not been written about last Sunday’s interview that has been seemingly ignored by the Buffett acolytes out there and those clickbait-driven journos who know mentioning Buffett in a headline instantly attracts readers.

I recall when I was the Small Business Editor for ‘The Australian’ newspaper, if I ever wanted to get a front-page pointer to my page on Mondays. I’d try to find some reason to get a story and pic on Megan Gale.

Inexplicably, the men in those days who determined what was a good story seemed to think Megan was good for sales! Funny that.

My favourite Buffett story actually linked Warren’s Berkshire Hathaway with the US actress Anne Hathaway and this way-out story of 2011 even gave birth to this imaginative movie idea from Huffington Post as seen above!

Dan Mirvish stretched both the Buffett and Hathaway brand pointing out that when the news was good for Anne, it was also good for Berkshire Hathaway (BRK), as the following showed:

My guess is that all those automated, robotic trading programs are picking up the same chatter on the internet about “Hathaway” as the IMDb’s StarMeter, and they’re applying it to the stock market.

“Only in America!”, as we often say. But only America can create a legendary investor, whose annual shareholder meeting attracts over 17,000 attendees and has been described as “Woodstock for Capitalists!”

I told you last week, that Maureen and I were scheduled to have “three days” of a piece or two from Warren and his 96-year-old buddy, Charlie Munger, which would’ve been monetary music to our ears.

Alas, a pandemic got in the way, so we had to watch it from our bed at 6:45am on Sunday morning, thanks to Yahoo Finance.

Lots of experts tried to read between Warren’s lines as he did his chairman’s speech, which went on for well over an hour, trying to work out if the legend thinks there will be another leg down for the stock market.

In case you missed it, a lot of experts, fund managers and other investors/speculators think this rebound of the stock market will turn into another crash and that’s when they want to buy.

We did learn that Warren is holding a lot of cash, but he says that’s because he sold his airline holdings for around $US4 billion after forking out about $US7 billion to take 10% of each of America’s biggest airlines. He reckons travel will change for a long time, so his calculations, pre-pandemic, were wrong. So he’s faced his mistake and has changed course.

Now that’s a multi-billion-dollar lesson you should never forget but there was one big lesson I took out of Warren’s long and winding road speech on Sunday, that I’ll never forget.

He made the point that he was born one year into the Great Depression and in 1954, he was working for the legend’s legend — Benjamin Graham — who penned the book ‘The Intelligent Investor’.

Graham taught Buffett, and Buffett taught me, that the Dow Jones index, which crashed in October 1929, didn’t pass its pre-crash high until 1954!

Buffett explained how the Depression killed confidence for over a decade but, since then, the US economy and stock market has had an enormous tail force that has explained the huge generation of wealth and material welfare that happened for over 70 years.

The story he narrated, which included a potted history of the USA, effectively implied what has to happen in coming months. The reopening of economies and businesses have to happen, recreating lost jobs and wages, so that the value of the stimulus from the big spending governments of the world and the unusual assistance of central banks to help potentially broken money markets, doesn’t end up being insufficient to reconstruct the global economy to something close to what we had before we were captured by the hitherto unheard of Coronavirus.

Buffett has been a man who often tells us that he doesn’t know where the stock market will be in two days or even two years time, but he bets it will be much higher than today in five and 10 years time. There is a momentum of life and economies that points onwards and upwards, which is captured in a graph that someone like Warren Buffett and yours truly have gazed at and pondered over nearly every day of our working lives.

That graph (below) is the Dow Jones Industrial Average that’s based on some of the top 30 listed companies in the USA.

And while the S&P 500 and Nasdaq indices are now more important show-and-tell indicators of the health of the US business sector, the Dow has history, and what does it show?

This chart (above) shows the ups and downs of the stock market but the unignorable lesson is that it rises pretty steeply over time and that slope upwards is returning 10% per annum over a decade. And that quote: “Human Innovation Always Trumps Fear” (above the chart) explains a lot of that steep return. And it’s why Buffett always says to “bet on America.”

You might think our US buddies and their country have a flaw or two, but they will go down as the greatest innovators in history.

In the past, Buffett has advised us: “We always live in an uncertain world. What is certain is that the United States will go forward over time.”

Remembering this story and after listening to Warren last Sunday, I’m even more certain that we will beat the negatives from the Coronavirus and see both the economy and stock market head higher in 2021.

The history of the Aussie stock market says that after a crash, our market rebounds between 30-80%. So far it has only been 18%, so even if we face another fall, I’m looking forward to making money out of stocks going forward.

If you don’t believe me, believe Warren Buffett.