Warren Buffett & Charlie Munger in 2003 said when to invest in crash and when to hold cash

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01. uh interest rates are the lowest they've been and i equity values in aggregate are still high berkshire has meaningful free cash flow a short duration bond portfolio and your buyer of low moldable high quality private businesses in a few stocks assuming that the stimulative economic policies to deal with a recession eventually cause interest rates to go up and maybe equity values to come down berkshire seems very well positioned to benefit would you comment in terms of how we're positioned you know we have 16 billion in cash not because we want 16 billion of cash or because we expect interest rates to go up or because we expect equities to go down we have 16 billion in cash because we don't see anything that makes us want to part with that cash where we feel we're getting enough for our money but we would spend it we spent a monday morning on the right sort of a business or even if if we could find equities that we liked or if we could find like last year we found some junk mods we like we're not finding them this year at all because prices have changed dramatically so we're we're not really ever positioning ourselves we're simply trying to do the smartest thing we can every day when we come to the office and if there's nothing smart to do cash is the default option charlie in terms of future opportunities the issue is is it all likely that there'll be an opportunity like 1973 for or 1982 even when equities generally are just mouth-watering i think there's a very excellent chance that neither warren or i will live to see either of those occasions again if so uh berkshire's not going to have a lot of no-brainer opportunities we're going to have to grind ahead the way we've been doing it recently which is not all bad it's not impossible that we'll get some mouth-watering opportunities i mean you just don't know in markets it's unbelievable what markets do over time and since you brought up interest rates uh you know in japan the 10-year bond is selling to yield five-eighths of one percent five-eighths of one percent i don't think there's anybody in our annual meeting of 20 years ago certainly including charlie and myself who would have dreamt of the 10-year bond uh of a country you know running a significant deficit would be selling at five-eighths of one percent i mean would you say so charlie whatever and it's but strange things happen strange things happen but if that could happen in japan something much less horrible for the investing class uh could happen in the united states it's not unthinkable i mean we could be in for a considerable period when the average intelligent diversified investor in common stocks using fancy paid advisors just doesn't do very well but you can argue that if what we warned against and hope doesn't happen with derivatives should happen it might create enormous opportunities for us in some arena i mean we wouldn't be it might very well turn out to be good for us if if you get chaotic markets you had you had a somewhat disorganized market in junk bonds last year because there were a lot of them created much faster than the funds available to absorb them uh were coming in now this year you have just the opposite situation money pouring into the junk bond funds billion dollars a week roughly and that's changed the whole price situation the world hasn't changed that much it's just that that the chaos has left the market uh for those instruments