Warren Buffett offers hymn to economy, praises immigrants
Warren Buffett, the billionaire investor, on Saturday lauded the “miraculous” qualities of the U.S. economy in highlighting another stellar year for his company, Berkshire Hathaway.
Buffett, whose record of beating the stock market over the past 50 years is unparalleled, is known for being persistently optimistic about the prospects of the U.S. economy.
But his usual hymn to the dynamism of the U.S. economy in his annual letter to Berkshire Hathaway shareholders released Saturday morning reached new heights.
“Americans have combined human ingenuity, a market system, a tide of talented and ambitious immigrants, and the rule of law to deliver abundance beyond any dreams of our forefathers,” Buffett wrote.
He supported Hillary Clinton during last year’s presidential campaign, and he did not mention President Donald Trump in his letter. But his celebration of the economy’s ability to deliver growth stands in stark contrast to Trump’s darker descriptions of the country’s economic prospects.
Last year was another outstanding one for the man known widely as the Oracle of Omaha. Berkshire Hathaway’s stock price was up 23 percent in 2016, about double the return on the Standard & Poor’s 500 index.
Berkshire’s operating companies, which include insurance firm Geico, railroad company BNSF and numerous others, also performed well in an improving economy, with operating earnings increasing to $17.5 billion in 2016 from $17.3 billion in 2015.
Buffett also revealed in his letter that a recent bet on Apple had paid quick dividends. He owns a 1.1 percent stake in the company he purchased at a total cost of $6.7 billion. His 61 million shares are now worth more than $8 billion.
Underscoring his long-held thesis that, over time, highly paid hedge-fund hotshots lose out to a cheap index fund, Buffett presented the latest results of a bet he made nine years ago: Since then, a standard S&P index fund overseen by Vanguard is up 85 percent, easily outpacing the hedge funds’ return of 22 percent.