Business & Investment

Warren Buffett touts the unexpected strength of the U.S. economy as Berkshire rebounds by Reuters

© Reuters.File Photo: Berkshire Hathaway Chairman Warren Buffett (left) and Vice Chairman Charlie Munger at Berkshire Hathaway’s Annual Berkshire Shareholder Shopping Day in Omaha


By Jonathan Stempel and John McCrank

(Reuters)-Warren Buffett said on Saturday that the US economy is much better than expected early in the coronavirus pandemic, and that improvements are benefiting his conglomerate. Berkshire Hathaway Inc. .. (NYSE :)

Buffett said at Berkshire’s annual meeting that the economy was “revived in a very effective way” with financial stimulus from the Federal Reserve Board and fiscal stimulus from the US Parliament.

“It did the job,” Buffett said, adding that 85% of the economy is running in “super high gear.”

The annual meeting was held in Los Angeles, where 90-year-old Buffett joined Berkshire’s 97-year-old Vice Chairman Charlie Munger to answer shareholder questions for more than three hours.

Berkshire has abandoned its annual shareholder weekend in its second year in Omaha, Nebraska, a luxury home that typically attracts about 40,000 shareholders. Saturday’s meeting was broadcast on Yahoo Finance.

Many of Berkshire’s dozens of operating units are rebounding as concerns about COVID-19 ease, more people are vaccinated, stimulus checks are performed, business restrictions are relaxed, and confidence in the economy grows. I will.

Gross domestic product, a rough indicator of the US economy, grew at an annual rate of 6.4% from January to March, according to government estimates.

Some economists predict that the economy will grow at the fastest rate in 2021 in nearly 40 years.

Buffett was relatively restrained at last year’s annual meeting, despite expressing confidence that the country’s historic resilience to the big problem he called the “American miracle” would win again. ..

The Berkshire meeting was held after the company announced that first-quarter profits increased 20% to about $ 7 billion and net profits, including investments, totaled $ 11.7 billion.

The results benefited from more than expected underwriting at Geico, increased shopping at Berkshire car dealerships, retail outlets such as See’s Candies and Nebraska Furniture Mart, and nearly double the profits on Clayton Homes mobile home units. ..

Berkshire also repurchased $ 6.6 billion in shares in the first quarter, following a record $ 24.7 billion last year.

Despite the repurchase, Berkshire closed in March with $ 145.4 billion in cash. Buffett’s last major acquisition was more than five years ago.

Shareholders were expected to vote at the meeting on a proposal requiring Berkshire to further disclose its efforts to address climate change and promote diversity and participation in the workforce.

Buffett disagrees with both proposals. He controls almost one-third of Berkshire’s voting rights and the proposal will probably be defeated.

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Warren Buffett touts the unexpected strength of the U.S. economy as Berkshire rebounds by Reuters Warren Buffett touts the unexpected strength of the U.S. economy as Berkshire rebounds by Reuters

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