(Reuters)-Warren Buffett’s enthusiasm for the future of the United States and his company Berkshire Hathaway Inc. has not been dimmed by the coronavirus pandemic.
Buffett said in his annual letter to investors that he and his successors will treat their Berkshire funds with caution, where “time passing” and “inner peace” will provide them with good service.
Despite the loss of more than 31,000 jobs in Berkshire Hathaway’s workforce last year, Buffett still maintains an optimistic attitude towards trademarks and repurchased a record $24.7 billion in stock in 2020, which shows that he Think you are underestimated.
He also praised the economy̵
He said: “Our firm conclusion: Never bet on the United States.” ((here))
Gardner, Lancaster, Pennsylvania, partner of Russo & Gardner, Berkshire (Berkshire) long-term investor Tom Russo (Tom Russo) said: “He believes in his company and the country.
This letter broke the silence of the 90-year-old Buffett, who has been almost completely unknown to the public since the Berkshire Hathaway annual meeting in May last year.
But despite touching on familiar themes, including the greed of Wall Street bankers’ transaction fees that benefited them more than the company they represented, Buffett did not indulge in the pandemic, which is the main reason for Berkshire’s unemployment.
He has not yet addressed the recent social unrest or fragmented political environment that some companies are now more directly dealing with.
Cathy Seifert, an analyst at CFRA Research, rated Berkshire as “hold”. He said: “This letter emphasizes the innovation and values that have become the backbone of the United States. This is completely acceptable. of.”
She added: “Given the respect that investors have for him, this letter was shocked because it omitted it.” “The new generation of investors needs a certain degree of social awareness. Companies like Berkshire must set up Set your own beliefs, standards and goals.”
Buffett also hinted at a long-term commitment to Apple. Despite recent sales of billions of dollars, Berkshire Hathaway’s stock issuance at the end of 2020 was $120.4 billion.
He called Apple and the BNSF railroad the most valuable assets of Berkshire Hathaway Energy-“almost toss”-in addition to its insurance business, and ahead of Berkshire Hathaway Energy. “Family jewelry,” he called these four investments.
Even if you lose your job, your profits will rise
Berkshire Hathaway also announced on Saturday that its net income for the fourth quarter was US$35.84 billion, and its net income for the whole year was US$42.52 billion, both reflecting the substantial growth of its stock.
Buffett believes that operating income fell 9% from the same period last year to 21.92 billion US dollars.
Share repurchases will continue in 2021, with Berkshire repurchasing more than $4 billion in shares. As of 2020, the company has $138.3 billion in cash.
However, Buffett lamented that fixed income is an investment. He said: “Today, bonds have nowhere to go.” The yield on the 10-year US Treasury bond fell by 94% from the 15.8% yield in September 1981 to the end of 2020. It is 0.93%. The yield on benchmark Treasury bonds has since jumped, but is still very low based on historical measures.
The letter said: “Global fixed-income investors, whether they are pension funds, insurance companies or retirees, will face a bleak future.”
Berkshire, located in Omaha, Nebraska, has more than 90 operating divisions, including BNSF Railroad, Geico Auto Insurance Company, Dairy Queen Ice Cream and See’s Candy.
Its number of employees dropped by 8% from the same period last year to approximately 360,000 employees. According to reports, BNSF’s unemployment rate has fallen even more, with 5,600 jobs dropping, while See’s employment rate has dropped by 16%.
The biggest impact of this pandemic on Berkshire’s business is Precision Castparts Corp, which laid off 13473 employees, accounting for 40% of the layoffs.
Berkshire Hathaway acquired the aircraft and industrial parts manufacturer for US$32.1 billion in 2016. This is Buffett’s largest acquisition, and has reduced travel due to the pandemic and punishes Precision’s aerospace. Customers write down 9.8 billion U.S. dollars.
Buffett wrote: “I have paid too much for this company.” “I am too optimistic about PCC’s normalized profit potential.
He said: “PCC is far from my first mistake.” “But it’s a big problem.”
Berkshire Hathaway said that some companies have begun to recover from the pandemic.
Jim Shanahan, an analyst at Edward Jones & Co, said: “Depending on the speed of vaccination and the opening of the U.S. economy, it will definitely become stronger by 2021.”
Buffett also stated that Berkshire Hathaway’s annual meeting will be held in Los Angeles instead of Omaha, which enabled the 97-year-old California vice chairman Charlie Munger to rejoin his ranks and replied It took about 3-1/2 hours for shareholder issues.
The 58-year-old vice chairman Greg Abel and 69-year-old Ajit Jain are widely regarded as the leaders who succeeded Buffett as CEO, and they will also answer questions.
Buffett said that he hopes Berkshire Hathaway will resume its annual shareholder weekend event in Omaha in 2022, which usually attracts about 40,000 people. This is “Berkshire Hathaway.” An honest and sincere annual meeting,” he wrote.
Jonathan Stempel reports from New York; Megan Davies, Alden Bentley, Marguerita Choy and Cynthia Edited by Cynthia Osterman