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flation is the biggest worry for the global markets right now which has led to monetary tightening from the central banks everywhere it's the key topic on the minds of all investors inflation in most countries is breaking all records and reaching historically high levels every month we're seeing data that suggests that inflation is increasing way beyond what anyone predicted a few months or a year ago so for an investor what does it mean when inflation is shattering all past records should you stay invested or pull out or if you invest what should you be careful about in today's video let's look at what super investors such as warren buffett charlie munger howard marks seth calaman lilu have to say about the impact of inflation on investing and what they advise to do in times of high inflation this will be a multi-part series on investing during inflation in this part we'll cover the advice from warren buffett and howard marks others can find this video as well as do subscribe to get the next videos in the series let's dive in first let's start with warren buffett the investing legend who has been active for the last 70-plus years and has seen similar or worse inflationary periods according to mr buffett inflation swindled almost everybody it swindles bondholders it swindles equity holders it swindles people who are keeping cash under the mattress everyone two key pieces of advice from mr buffett on inflation are first one of the strongest protections against inflation is sharpening your skills and working to be at the top of your field this is the best thing you can do at a personal level to beat inflation invest in yourself in developing your skills because then people are going to give you some of what they produce in exchange for what you deliver because skills unlike currency are inflation proof if you have a skill that's in demand it will remain in demand no matter what the dollar is worth whatever abilities you have can't be taken away from you they can't actually be inflated away from you second in terms of what assets or investments works best during inflation according to mr buffett the best businesses during inflation are the businesses that you buy once and that you don't have to keep making capital investments subsequently also you should avoid any business with heavy capital investment he highlights real estate as good during inflation which you may buy once and then also get the rising value as well meanwhile he calls out businesses like utilities and railroads as not good investments during inflation mr buffett suggests that companies that tend to withstand an inflationary environment must have two characteristics one an ability to increase prices easily even when the product demand is flat and two an ability to increase bottom line with only minor additional investment of capital now let's look at what harvard marks another investing legend who runs oak tree capital and has spent over 50 plus years in the market suggests about investing during high inflationary periods two key pieces of advice from mr marx are first according to mr marks little inflation is good and keeps everything kind of moving but excessive inflation defined as much more than two percent is not desirable this is because higher inflation means higher interest rates higher interest means lower asset prices and that's what's going on right now he believes that in this situation interest rates have to rise the economy has to be less stimulated the fed has signaled it will raise interest rates which influences borrowing costs from mortgage rate to car loans he says that these higher borrowing costs will result in a slower recovery second during the times of high inflationary period according to mr marks investors should hold more floating debt or instruments with variable interest rates and rent out property with rates that can be raised over time at the same time he says that investors shouldn't dump or invert their existing portfolios i would not throw out everything i own and buy a bunch of what i just described that's going too far just do little changes at the margin in my opinion he also warns that timing the market does not always end well for investors most of whom trade to their own detriment being invested over time is what makes people successful as investors adding that only a few professionals can succeed in getting in or out of good opportunities at the right time that's it from us for now hope you enjoyed listening to the advice from super investors please smash that like button and be sure to subscribe to get the next video in this series on investing during inflation thanks for watching and we'll see you in the next video
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