Reiterating his belief that the U.S.’s stimulus policies will lead to inflation, Warren Buffett says investors should steer clear of long-term American fixed-income investments, because the dollar will not hold its purchasing power over the next decade or two.
“I would recommend against buying long-term fixed-dollar investments,” Buffett said at a news conference during his recent trip to India, Bloomberg reports. “If you ask me if the U.S. dollar is going to hold its purchasing power fully at the level of 2011, 5 years, 10 years or 20 years from now, I would tell you it will not. … I would much rather own businesses. It’s very easy to take away the value of fixed-dollar investments.”
Buffett also warned against investing in social networking sites, according to Bloomberg. “Most of them will be overpriced,” he said. “It’s extremely difficult to value social-networking-site companies. Some will be huge winners, which will make up for the rest.”