Berkshire Hathaway’s annual meeting also contained a note that Buffett sees his role, along with that of Munger, as being trustees for the company’s shareholders. Some investors could easily interpret that as a message that Buffett’s main ambition is now capital preservation rather than growing businesses. Stepping into the first two months of an instant recession, accompanied by witnessing an outright and unexpected vaporization revenue and earnings, can change the views of even the most aggressive person in the world.

If you take Buffett’s views at face value, that consumer behavior will be drastically different, then Buffett is hunkering down for harder times. He even went through an economic history, while still maintaining that America will overcome this like it has all other challenges, and the end result is that Buffett’s views and his actions are perhaps more financially conservative when it comes to deploying capital than has been seen perhaps ever.

Even during and shortly after the Great Recession, Buffett pulled out Berkshire Hathaway’s checkbook and pom-poms and acted as a lender and distressed capital investor for financial companies such as Goldman Sachs Group Inc. (NYSE: GS) and Bank of America Corp. (NYSE: BAC). He also acted as a distressed lender for companies like Tiffany & Co. (NYSE: TIF), Harley Davidson Inc. (NYSE: HOG) and even General Electric Co. (NYSE: GE).

One important lesson about Buffett, or any classic valuation analysis, is that a 35% drop in a stock may only make a stock “cheap” on paper. If the share price drops 35% but the new normalized earnings may be down 40% or worse, that stock has actually become more expensive on that classic price-to-earnings (P/E) basis.

One issue that will have shaken Buffett and his portfolio managers is the absolute paralysis a record-breaking market drop can cause. Those fears are compounded when it may not be easy to sell billions of dollars worth of stock at any given time when buyers are in panic mode.

Berkshire Hathaway’s operating earnings were more than $5.8 billion in the first quarter of 2020. The conglomerate’s net loss after backing out gains and losses from the investment portfolio came to a loss of almost $50 billion, after a $54.5 billion writedown of the public stocks and other investments at the end of March.

It might seem easy to point fingers and say that the market has become too complicated for a so-called trustee of a company with more than $400 billion in market cap. Capital preservation and income are not noble long-term strategies, considering the time value of money, but navigating the instant recession and rapid bear market before it has proven tiring for even the greatest investors in the world. The degree of the recovery rally based on trillions of stimulus and a gradual reopening of the economy have caught even the biggest bottom-fishers and value buyers by surprise. That has been true for those who are 29, 39, 49 and 89 alike.

Many investors have begun to lower their expectations for an elusive “whale of a deal,” wherein Buffett would make another acquisition potentially in the high-tens of billions of dollars. Of course, there is the problem that management of a selling company often cannot sell a merger to their shareholders if it locks many of them in at sales prices that are too low solely due to the market and sudden economic shift.

When an investor reaches even 10% of the clout of Buffett, that investor is considered to be among the most successful of the time. When Buffett communicates that he cannot find many opportunities and isn’t even more excited about buying back his own Berkshire Hathaway shares at a big discount, it has to instill at least some caution.

At $177.95 apiece, Berkshire Hathaway shares are down 23% from their high of $231.61. That compares to the S&P 500 down only about 16% from its peak, as of Monday’s close.

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