Buffett’s got a pep in his step
Warren E. Buffet’s Annual Letter to the Berkshire Hathaway, released on Saturday, could not have been more upbeat to its shareholders.
But the optimism, Buffett stressed, wasn’t limited to his company itself. The performance of the U.S. economy was nothing short of “miraculous”, he said.
This is a welcome news, especially in contrast to President Trump’s dire depictions of our economy and society.
On the up
Berkshire had yet another year of huge profits— a net earning increase of $6.29 billion in the fourth quarter of 2016, up from $5.48 billion from the year before.
Stock prices were up 23 percent in 2016, almost doubling the return on S&P 500 index.
Much of the optimism stems from the phenomenal stock prices of the current market, which he stressed were “on the cheap side”. So much so, that Mr. Buffett himself has invested $20 billion into the market since the November elections.
Allaying some dark fears about the stock market, Buffett said, “we are not in bubble territory.”
Buy, buy birdie
In fact, he encouraged investors to buy more. Ten-year treasury yields are only at 2.3 percent.
Investors would regret, he said, “if interest rates were 7 or 8 percent” and they let low rates pass them by.
The time is ripe for making profits, Mr. Buffett said for “both large and small investors [who] should stick with low-cost index funds.”
There is even better news for the tech industry, which has attracted Mr Buffett’s investments. He doubled his holdings of Apple since just the beginning of 2017 alone, which is now worth $17 billion.
But his highest optimism and praise was reserved for America. “Above all, it’s our market system – an economic traffic cop ably directing capital, brains and labor – that has created America’s abundance,” Mr. Buffett wrote.
He added “From a standing start 240 years ago – a span of time less than triple my days on earth – Americans have combined human ingenuity, a market system, a tide of talented and ambitious immigrants, and the rule of law to deliver abundance beyond any dreams of our forefathers.”
Future is so bright, we gotta put our shades on
Despite the political upheavals, the economic future couldn’t be any brighter, according to the highly regarded investor.The dynamism of the U.S. economy is 'unbelievable,' he argued, adding there will be ups and downs in growth but 'the U.S. always comes back and wins.'Click To Tweet
“I’ll repeat what I’ve both said in the past and expect to say in future years: Babies born in America today are the luckiest crop in history.”