Warren Buffett encourages investors to bet on America

Posted on Feb 27, 2019 2021 at 17:00

If he mentions little, in his letter, the pandemic that hit the world in 2020, Warren Buffett is nevertheless categorical: American companies will get by, despite the current crisis. “In its brief existence (232 years), there has never been another incubator capable of unleashing human potential like America. And despite times of crisis, the progress of our country’s economy has always been breathtaking, ”he writes.

This long-time Democrat also evokes his confidence in the political future of the country, a few weeks after Joe Biden took office as President of the United States: “Beyond that, we keep in mind our aspiration, innate , to become an “increasingly perfect union”. In this regard, progress has often been slow, uneven and discouraging. But we have made progress and will continue to do so. Our unwavering conclusion: never bet against America ”

No “premature retirement” before the age of… 103 years

Regarding the conglomerate Berkshire Hattaway, Warren Buffett admits to having made “a mistake” by buying Precision Castparts (PCC) in 2016, which led to an asset depreciation of 11 billion dollars.

“I paid too much for this business,” admits the billionaire. “Nobody misled me, I was just too optimistic about the potential of CCP,” he said. He also indicates that the group’s annual meeting, which usually attracts thousands of shareholders and which will be held on May 1, will be held as last year in virtual mode, due to the pandemic.

On the earnings side, in 2020, Berkshire posted a net profit of $ 42.5 billion in 2020, driven by its insurance business but down nearly 48%. “Last year, we did not achieve any target: Berkshire made no major acquisitions and operating profit fell 9%,” laments the leader.

“We did, however, increase the intrinsic value per share of Berkshire by retaining earnings and repurchasing about 5% of our shares,” he explains. However, he says he is convinced “that over time, Berkshire’s capital gains on its investments will be substantial.”

Finally, concerning the speculations on his possible retirement (Warren Buffett is 90 years old), “the oracle of Omaha” offers himself a joke at the turn of a paragraph, when he mentions the retirement of the ‘one of Berkshire’s oldest leaders, “at the ridiculously premature retirement age” … 103 years old. A delicate way to meet already in 2022 for the next letter.

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