Abu Dhabi, UAEWednesday 19 June 2019

In letter to shareholders, Warren Buffett takes a swipe at Trump

He says, market conditions are making it difficult for Berkshire Hathaway to acquire big businesses

Warren Buffett, chief executive of Berkshire Hathaway and so-called 'Oracle of Omaha', was weighed down by sinking stock prices and a struggling Kraft Heinz in his annual letter to shareholders. Reuters
Warren Buffett, chief executive of Berkshire Hathaway and so-called 'Oracle of Omaha', was weighed down by sinking stock prices and a struggling Kraft Heinz in his annual letter to shareholders. Reuters

In his annual letter to shareholders, billionaire businessman Warren Buffett took aim at US President Donald Trump for claiming credit for the country’s economic growth without naming the commander in chief directly. He also lamented that market conditions are making it difficult for his Berkshire Hathaway to find big companies to buy amid "sky-high" prices.

"It is beyond arrogance for American businesses or individuals to boast that they have 'done it alone'," said Mr Buffett, who is the third-richest American according to Bloomberg's Billionaires Index. He also sounded a note against protectionism and in favour of globalisation. President Trump has scrapped multi-lateral agreements and waged trade wars since coming to office under the pretext of protecting American industries and creating jobs.

Mr Buffett, who has been investing since the age of 11, said the US should “rejoice” when other countries have bright futures. “Americans will be both more prosperous and safer if all nations thrive. At Berkshire, we hope to invest significant sums across borders.”

Berkshire Hathaway, which was the fifth-biggest publicly traded company by market capitalisation in the world in the fourth quarter of 2018, suffered losses of $25.4 billion in the fourth quarter, according to the company's annual report released on Saturday. The conglomerate, which owns $173bn in stocks, was pulled down by the market’s plunge in the last quarter of the year – bringing losses of $22.7bn on its securities.

Berkshire also attributed a $3.02bn non-cash loss to its 26.7 per cent stake in Kraft Heinz. Last week, the struggling packaged food giant reported a $15.4bn writedown for Kraft, Oscar Mayer and other assets, cut its dividend, and said the US Securities and Exchange Commission was examining its accounting practices.

In his annual letter to Berkshire Hathaway’s shareholders that accompanied its results, Mr Buffett told investors to focus on the performance of its wide variety of companies – from insurers and Coca Cola to railroads and American Express –which did well last year, posting a 36 per cent increase in earnings. He said Hathaway is actively seeking an "elephant-sized acquisition" but 2019 is unlikely to be the year for it.

He also took an opportunity to provide a history lesson from the Oracle of Omaha's perspective.

Mr Buffett, 88, wrote that Berkshire’s long-term success was in part a product of “the American tailwind” that has enabled the country to enjoy “almost unbelievable prosperity”.

He noted that since he began investing in 1942, such prosperity has been overseen by seven Republican and seven Democratic presidents, through peace, war and financial crises – all gains made through bipartisanship, he said.

Mr Trump often ties his economic policies to stock market surges and job gains, taking personal credit for positive news. Mr Buffett, who supported Democrat Hillary Clinton in her 2016 presidential campaign, said no one person should claim credit when things go well.

Mr Buffett has a net worth of about $82.8bn as of February 24, according to the Bloomberg Billionaires Index.

Updated: February 24, 2019 12:34 PM

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