Warren Buffett Predicted 'Major' Stock Market Declines and 'Traumas' But Said You Should Never Forget These 2 Things During Such 'Scary' Periods

Core Insights - Warren Buffett emphasizes the importance of long-term investment in quality businesses despite market volatility [1][2] - He believes that quality businesses in the U.S. are "virtually certain" to increase in value over time, although some may be adversely affected by market downturns [2][4] - Buffett advises investors to view widespread fear as an opportunity for bargain purchases while cautioning against personal fear [3][4] Market Dynamics - The S&P 500 has experienced double-digit gains annually since Buffett's 2016 letter, with exceptions in 2018 (down 4.4%) and 2022 (down 18%) [3] - Buffett warns that major market declines and "traumas" are unpredictable and will affect nearly all stocks [5] Investment Strategy - Investors who can manage personal fear and maintain investments in large, conservatively financed businesses are likely to succeed [4] - Buffett encourages investors to disregard pessimistic forecasts and highlights the role of entrepreneurial spirit, productivity, capital, and innovation in driving the U.S. economy [4] Company Performance - Berkshire Hathaway's normalized earnings per share are expected to grow annually, supported by a strong business portfolio and financial strength [6] - Overall, Berkshire's EPS has risen since Buffett's 2016 letter through the end of 2024, despite year-to-year fluctuations [7]