Buffett: US economy better than presidential hopefuls say

“It’s an election year, and candidates can’t stop speaking about our country’s problems (which, of course, only they can solve)”, he wrote. “Rather, they work far more efficiently and thereby produce far more”, Buffett added.

Buffett said Berkshire has always craved efficiency, just like 3G.

BNSF is the largest unit at Berkshire and has been cited by Buffett, 85, as an asset that will be valuable for a century because it transports industrial equipment, consumer goods and agricultural products across the U.S. West. The unit contributed $4.25 billion of earnings in 2015, an increase of nearly 10 percent from a year earlier.

Warren Buffett bemoaned the “negative drumbeat” on the USA economy from presidential candidates in his annual Berkshire Hathaway Inc shareholder letter on Saturday, saying they are misleading Americans into believing their children will be worse off than they are.

In his letter, Buffett contrasted Berkshire’s pursuit of efficiency with that of 3G Capital, the Brazilian investment firm that he partnered with to acquire Heinz, which was later combined with Kraft past year.

“For 240 years it’s been a awful mistake to bet against America, and now is no time to start”, said the man called the “Oracle of Omaha” after his hometown in the midwestern state of Nebraska.

He assured shareholders that Berkshire’s businesses will adapt.

His example was Precision Castparts Corp., which was purchased a month ago for $32 billion – the company’s largest acquisition to date. That was much better than the previous year’s $192 million gain on investments and derivatives. He also said this makes Clayton different from lenders that sowed the 2008 financial crisis by making reckless loans that Wall Street later packaged into securities that were bought by investors, many of whom who should have known better.

Float from the insurance operations-money that Berkshire holds and invests for its own benefit because premiums are paid upfront while claims are paid later-increased to $88 billion.

Buffett also defended the Clayton Homes subsidiary, whose mortgage practices have been scrutinized because they aim at lower-income homeowners.

Edward Jones analyst Jim Shanahan says the fact that Buffett devoted space in his shareholder letter to those topics suggests he is still hearing criticism of 3G Capital and Clayton Homes.

The company’s BNSF railroad and utility businesses also performed well, and Berkshire’s revenue grew 7 percent to $51.8 billion. Imagine your reaction if I had predicted then that in 2015 the loss costs would increase to about $1,000 per policy. “Meanwhile, other major insurers and reinsurers would be swimming in red ink, if not facing insolvency”, Buffett said. “In like manner – well, not exactly like manner – our appetite for either operating businesses or passive investments doubles our chances for finding sensible uses for Berkshire’s endless gusher of cash”.