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Billionaire Warren Buffett issued a stark inflation warning in his annual letter to Berkshire Hathaway Inc. shareholders and criticized the “disgusting” behavior of money managers.
Buffett, one of the world’s most successful investors, warned that “fiscal deficits have consequences.”
“Our job is to manage Berkshire’s businesses and finances to produce an acceptable outcome over time and maintain the company’s unmatched resilience in the face of financial panics or severe global recessions,” he wrote himself and 99-year-old Charlie Munger, vice chairman of Berkshire Hathaway. “Berkshire also offers modest protection against runaway inflation, but that attribute is far from perfect.”
“Huge and stuck budget deficits have consequences,” said Buffett, 92.
| ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| BRK.A | BERKSHIRE HATHAWAY INC. | 461.705.01 | +2.330.01 | +0.51% |
| BRK.B | BERKSHIRE HATHAWAY INC. | 303.90 | +0.81 | +0.27% |
But don’t blame those shortfalls on Berkshire, he hinted.
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“During the decade ending 2021, the US Treasury received approximately $32.3 trillion in taxes while spending $43.9 trillion,” he wrote, saying Berkshire owed $32 billion over that period US corporate taxes paid.
“And that means – get ready – if there had been about 1,000 taxpayers in the US making up Berkshire’s payments, no other companies, nor any of the nation’s 131 million households, would have had to pay any taxes to the federal government,” he said buffet “Not a dime.”
FILE – In this May 5, 2019 file photo, Warren Buffett, chairman and CEO of Berkshire Hathaway, speaks during a bridge game following Berkshire Hathaway’s annual stockholders meeting in Omaha, Nebraska. (AP Photo/Nati Harnik, file/AP Newsroom)
The 92-year-old urged investors to focus on the big picture for the long term and signaled he has not lost his confidence in the US economy.
“I’ve been investing for 80 years – more than a third of our country’s lifetime. Despite our citizens’ penchant – almost enthusiasm – for self-criticism and self-doubt, I have yet to see a time when it made sense to have a long-term bet against America,” he said. “And I very much doubt that any reader of this letter will in the future will have a different experience.”
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FILE PHOTO: Berkshire Hathaway shareholders walk past a video screen at the company’s annual meeting in Omaha May 4, 2013. (Portal/Rick Wilking/File Photo / Portal Photos)
Attached to the letter were Berkshire Hathaway’s year-end results, which Buffett said reflected a “good” year — including a record $30.8 billion in operating income. The company also posted an annual net loss of $22.8 billion.
Specifically, in a synopsis last year, Buffett issued what he felt was an important warning, criticizing the “disgusting” behavior of money managers.
FILE PHOTO: Warren Buffett, CEO of Berkshire Hathaway Inc, pauses while playing bridge as part of the company’s annual meeting over the weekend in Omaha, Nebraska, U.S. May 6, 2018. (Portal/Rick Wilking/File Photo/File Photo / Portal Photos)
“Finally, an important caveat: even our favorite operating profit number can easily be manipulated by managers who wish to do so. Such manipulations are often considered sophisticated by CEOs, directors and their advisors. Reporters and analysts welcome their existence as well,” he said.
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“This activity is sickening. It requires no talent to manipulate numbers: only a deep desire to deceive is required.”
Buffett said that deception under the guise of “bold, imaginative accounting” has “become one of the shames of capitalism.”
READ WARREN BUFFETT’S ANNUAL LETTER – APP USERS, CLICK HERE:
Portal contributed to this report.