Warren Buffett, the renowned investor and the world's sixth-richest person, has issued a warning concerning the soaring fiscal deficits in the United States. As many investors express concerns about U.S. lawmakers' inability to curb these deficits, Buffett cautioned against worsening the situation by extending tax cuts endorsed by former President Donald Trump.
The 94-year-old Buffett, who acknowledged his advanced age, informed shareholders that he would be using a cane and would spend less time answering questions at Berkshire Hathaway's annual meeting on May 3. Despite this, he reassured stakeholders about the capable leadership of Vice Chairman Greg Abel, who is set to take over the reins of the conglomerate. Buffett emphasized Abel's proven ability to deploy capital effectively, suggesting that the transition would occur soon.
Accompanying Buffett's letter was Berkshire Hathaway's annual report, displaying a record annual operating profit for the third consecutive year. The profits rose by 27% to $47.44 billion, with quarterly operating profit surging 71% to $14.53 billion, marking another record. Analysts have regarded these results as solid, reflecting high business valuations and consistent selling of stocks, including Apple, Berkshire's largest stock investment.
In his letter, Buffett expressed concerns about the current fiscal policies, referring to them as "fiscal folly." He urged lawmakers to preserve a stable U.S. dollar, warning that irresponsible fiscal behavior could undermine the value of paper money. He emphasized the importance of maintaining a stable currency for the long-term success of both Berkshire Hathaway and the broader American economy, which he described as the "American miracle."
This year marks Buffett's 60th year at the helm of Berkshire, which he transformed from a struggling textile company into a trillion-dollar conglomerate. Despite the company's impressive growth, its size now limits its ability to outperform market indexes significantly. Over the past year, Berkshire's stock price has risen 15%, compared to the Standard & Poor's 500's 18% increase.
At the upcoming annual meeting, Buffett plans to spend less time on stage alongside Abel and Vice Chairman Ajit Jain, addressing shareholder questions. Tens of thousands of attendees are expected at the event, which includes a weekend of shareholder activities and shopping. Despite his age, Buffett continues to enjoy his role, although he acknowledges that some activities have been minimized.
The meeting will not feature the traditional movie created by Buffett's daughter, Susie. Reflecting on his age, Buffett humorously mentioned his discussions with his 91-year-old sister Bertie, using an old-fashioned phone to talk about the joys and challenges of old age.
Reporting by Jonathan Stempel in New York; Writing by Carolina Mandl in New York; Editing by Diane Craft.
