Buffett says US economy weaker than he expected but growing

Buffett adds that actual year-over-year earnings could decline at times due to “weakness in the USA economy or, possibly, because of insurance mega-catastrophes”.

“Utilities were usually the sole supplier of a needed product and were allowed to price at a level that gave them a prescribed return upon the capital they employed”, Buffett said. “I think IBM will be worth more money, but, like I said, I could be wrong but we’ll accept that”, he said. But ultimately, Warren Buffett’s belief in America’s future comes down to its great success so far.

Buffett said Berkshire would likely not own Dow Chemical’s common stock, but that he liked the company’s preferred shares.

Buffett has a reputation for buying well-run companies and then largely letting them continue to run themselves.

While Buffett snags most of the attention for his mega deals – like the buyout of Precision Castparts – the comment is a reminder of how he’s set up Berkshire to have multiple avenues for reinvestment.

Even as America’s economy expands over the long haul, fights over the nation’s prosperity won’t abate, Buffett wrote. Last year, however, Clayton foreclosed on 8,444 mortgages at a cost of $157 million, and paid nearly $750,000 in fines and refunds to customers.

Buffett’s letter, which reviews the operations of the conglomerate over the previous year, is widely read.

To make up for that, Buffett says insurance rates for the more than 22 million vehicles insured by GEICO have already gone up. ” As a result of this “negative drumbeat”, many Americans really do believe that their children will not live as well as people are living today”. Buffett contends, though, that babies born in America today are the luckiest crop in history.

“We don’t want our million customers that don’t have solar to be buying it for 10.5 cents when we can turn it out for them at 4.5 cents”.

Berkshire prefers to own a non-controlling but sizeable stake of “a wonderful company” rather than 100% of “a so-so business”.

That’s right: the odds of correctly picking the entire tournament are more than one in 9.2 quintillion, a statistic that Warren Buffett probably knows all too well. Subsequently, we’ve had a few close calls but avoided catastrophic destruction.