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Billionaire Warren Buffett issued a stark inflation warning and denounced “disgusting” behavior by money managers in his annual letter to Berkshire Hathaway Inc. shareholders.
Buffett, one of the world’s most successful investors, warned that “fiscal shortfalls have consequences”.
“It is our job to manage Berkshire’s operations and finances in a manner that will produce an acceptable outcome over time and maintain the company’s unparalleled endurance when financial panics or severe global recessions arise,” he wrote about himself and the 99-year-old. Berkshire Hathaway Vice Chairman Charlie Munger. “Berkshire also offers some modest protection against runaway inflation, but this property is far from perfect.”
“Massive and entrenched budget deficits have consequences,” said 92-year-old Buffett.
| 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 Berkshire for those shortages, he indicated.
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“During the decade ending 2021, the U.S. Treasury received approximately $32.3 trillion in taxes while it spent $43.9 trillion,” he wrote, saying that Berkshire paid $32 billion in U.S. corporate taxes during that period.
And that means — brace yourself — if there had been about 1,000 taxpayers in the U.S. meeting Berkshire’s payments, no other businesses or any of the nation’s 131 million households would have had to pay taxes to the federal government. said Buffett. “Not a penny.”
FILE – In this May 5, 2019 photo, Warren Buffett, chairman and CEO of Berkshire Hathaway, speaks during a game of bridge after Berkshire Hathaway’s annual shareholder meeting in Omaha, Nebraska. (AP Photo/Nati Harnik, File / AP Newsroom)
The 92-year-old told investors to focus on the big picture over the long term, indicating that he hadn’t lost faith in the US economy just yet.
“I have been investing for 80 years – more than a third of our country’s lifespan. Despite our citizens’ penchant – almost enthusiasm – for self-criticism and self-doubt, I have yet to see a time when it made sense to make a long-term bet against America,” he said. “And I highly doubt that any future reader of this letter will have a different experience.”
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FILE PHOTO: Berkshire Hathaway shareholders walk past a video screen during the company’s annual meeting in Omaha on May 4, 2013. (REUTERS/Rick Wilking/File Photo/Reuters Photos)
The letter was accompanied by Berkshire Hathaway’s year-end results, which Buffett said reflected a “good” year, including a record operating profit of $30.8 billion. The company also posted an annual net loss of $22.8 billion.
Notably, in a recap of the past year, Buffett said he issued 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 annual corporate meeting weekend in Omaha, Nebraska, US, May 6, 2018. (REUTERS/Rick Wilking/File Photo/File Photo / Reuters Photos)
“Finally, an important caveat: Even the operating profit figure we prefer can be easily manipulated by managers who want to. Such manipulation is often considered sophisticated by CEOs, directors and their advisors. Embrace reporters and analysts its existence as well,” he said.
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“That activity is disgusting. It takes no talent to manipulate numbers: it just requires a deep desire to deceive.”
Buffett said deception under the guise of “bold, imaginative accounting” has “become one of the shames of capitalism”.
TO READ THE ANNUAL LETTER FROM WARREN BUFFETT – APP USERS, CLICK HERE:
Reuters contributed to this report.
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