Berkshire Hathaways Warren Buffett appears to be beating President Joe

Berkshire Hathaway’s Warren Buffett appears to be beating President Joe Biden – Barron’s

Berkshire Hathaway CEO Warren Buffett’s annual letter, released Saturday morning, contained the usual simple wisdom his shareholders have come to expect, with humble and demure reflections on his own undeserved happiness and fallibility. But at least one section of the letter was sharper and appeared to be aimed directly at the President.

In this section, Buffett discusses companies buying back their own stock, which he describes as a benefit to shareholders — provided the stock is purchased at a reasonable price. He also assures that share buybacks will not hurt the country. Berkshire Hathaway repurchased $7.9 billion of its own stock last year, down from 2021.

See also: Berkshire posts an 8% drop in operating profits

Buffett has had harsh words for critics of buybacks — though he didn’t directly name President Joe Biden, who has publicly belittled stock buybacks. “When you’re told that all buybacks hurt shareholders or the country, or particularly benefit CEOs, you’re either listening to an economically illiterate or a well-spoken demagogue (characters that aren’t mutually exclusive),” Buffett wrote.

In response to a question from Barron’s, a Berkshire Hathaway representative wrote that the comment was not directed at a single person.

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“It was written six months ago and was not addressed to any specific person,” the rep wrote. “Mr. Buffett has been writing about buybacks for 20 years. Mr. Buffett has a policy of not criticizing individuals but criticizing practices.”

Biden signed legislation last year to impose a 1% excise tax on stock buybacks. Earlier this month, Biden said in his State of the Union address that he now wants to quadruple that tax. “Companies should do the right thing,” he said.

Biden has particularly lashed out at oil companies buying back their shares rather than ramping up production — a phenomenon he says has fueled high gasoline prices over the past year.

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“They have invested too little of that profit to increase domestic production and keep gas prices low,” Biden said. “Instead, they used those record earnings to buy back their own stock and reward their CEOs and shareholders.”

However, Buffett sees buybacks as an important and benign benefit to shareholders, who own a larger chunk of the company when shares are retired. Berkshire owns large stakes in oil companies, including Occidental Petroleum (Ticker: OXY) and Chevron (CVX).

Write to Avi Salzman at [email protected]