The US economy- What Does Warren Say?

Despite my general disgust at and of corporatists and their dirty government welfare profit systems, I do have investments in the stock market and other long term money making endeavors. While perusing the 2012 Berkshire Hathaway Annual Report (as usual, much of it is written as a personal letter from Buffet to the investors) I found an interesting statement from everyone's good buddy Warren Buffet.

There was a lot of hand-wringing last year among CEOs who cried “uncertainty” when faced with capitalallocation decisions (despite many of their businesses having enjoyed record levels of both earnings and cash). At Berkshire, we didn’t share their fears, instead spending a record $9.8 billion on plant and equipment in 2012, about 88% of it in the United States. That’s 19% more than we spent in 2011, our previous high. Charlie and I love investing large sums in worthwhile projects, whatever the pundits are saying. We instead heed the words from Gary Allan’s new country song, “Every Storm Runs Out of Rain.” We will keep our foot to the floor and will almost certainly set still another record for capital expenditures in 2013. Opportunities abound in America.

We certainly heard lots of crying and saw lots of hand wringing, didn't we? And yes many corporations made almost unprecedented earnings. Mr Buffet then proceeds to give CEOs a smack-down!

A thought for my fellow CEOs: Of course, the immediate future is uncertain; America has faced the unknown since 1776. It’s just that sometimes people focus on the myriad of uncertainties that always exist while at other times they ignore them (usually because the recent past has been uneventful). American business will do fine over time. And stocks will do well just as certainly, since their fate is tied to business performance. Periodic setbacks will occur, yes, but investors and managers are in a game that is heavily stacked in their favor. (The Dow Jones Industrials advanced from 66 to 11,497 in the 20th Century, a staggering 17,320% increase that materialized despite four costly wars, a Great Depression and many recessions. And don’t forget that shareholders received substantial dividends throughout the century as well.) Since the basic game is so favorable, Charlie and I believe it’s a terrible mistake to try to dance in and out of it based upon the turn of tarot cards, the predictions of “experts,” or the ebb and flow of business activity. The risks of being out of the game are huge compared to the risks of being in it.
My own history provides a dramatic example: I made my first stock purchase in the spring of 1942 when the U.S. was suffering major losses throughout the Pacific war zone. Each day’s headlines told of more setbacks. Even so, there was no talk about uncertainty; every American I knew believed we would prevail. The country’s success since that perilous time boggles the mind:

On an inflation-adjusted basis, GDP per capita more than quadrupled between 1941 and 2012. Throughout that period, every tomorrow has been uncertain. America’s destiny, however, has always been clear: ever-increasing abundance.

If you are a CEO who has some large, profitable project you are shelving because of short-term worries, call Berkshire. Let us unburden you.

Ouch! That hasta hurt!

So what do you say, ATS pundits? Does the man have a point? He certainly has the record to command attention.

Methinks he may indeed have a point.

Berkshire Hathaway Annual Report

Page 4 and 5

Oh, and if you would like a list of the companies owned by Berkshire (ala the thread about Monsanto companies) you can find that starting on page 106.

On an inflation-adjusted basis, GDP per capita more than quadrupled between 1941 and 2012.

Utilizing GDP as a means to reaffirm financial stability and continuous growth ?!

Tsk tsk, Mr. Buffet... you know better than this.

Just that quoted sentence alone gives me pause to raise an eyebrow as to what exactly his true intentions are behind this "pep rally" speech of his.

reply to post by Montana


Never!!!!!!! Trust anything that comes out of this guys mouth!

He got wealthy by being a cheat and a liar!

It amazes me, how the media paints this guy as one the "good wealthy people"!

Do some research on him and George Soros and their dealings on the railroads for the oil sands pipeline......

reply to post by CranialSponge


True, not the thing to do, but his $75.3 BILLION net worth suggests that he might have at least a small clue.

Doesn't it?

Originally posted by seeker1963


Do some research on him and George Soros and their dealings on the railroads for the oil sands pipeline......

I have.

And I didn't see anything they did that ANY other coporatist in the country wouldn't have done if they had the chance. I hate them all!
I'm pretty sure I would exchange paychecks with him, though.

reply to post by Montana


It's got nothing to do with his having a clue or not.

He knows damn well what he's talking about... Thus, I see his GDP reference as a freudian slip of the tongue that reveals his own lucrative intentions.

He's attempting to wave the red, white, and blue (patronizingly, I might add) because he bloody well knows what direction the economy is going.

It's no different than government and politicians encouraging the laymen to "Buy Buy Buy !" to pull the corporatist banksters sorry asses out of a sling.

reply to post by CranialSponge


Hmm, you may have a point or two, but sometimes a good locker room speech can indeed turn the game around.

And whether he is right or wrong (or just greedy), at least he is PUTTING HIS MONEY WHERE HIS MOUTH IS....

Kind of refreshing in a post mortem kind of way.

reply to post by Montana


Yes, sometimes it can turn a game around.

It's worked in the past, but surely he knows it's a completely different type of game this time around.

And that's why I question his half-hearted lazy attempt at repeating age-old propaganda-ish rhetoric knowing fully well that is not what's going to fix the problem this time around.

He knows this would only cause a temporary fix (the same temporary fix that's been going on for the past 50+ years)... But maybe that little extra time is just what he needs to sew up his own loose ends before the cookies crumble ?

Anyways, food for thought.

It just angers me when I see someone like Warren Buffet patronizing the plebeians (the CEO's he's supposedly addressing).