Buffett acknowledges in his now-famous annual letter as CEO of Berkshire Hathaway that “fiscal imbalances have repercussions.”
During his annual letter to shareholders, billionaire CEO of Berkshire Hathaway Inc. Warren Buffett issued a stern inflation warning and slammed the “disgusting” behavior of some of the company’s money managers.
“Fiscal imbalances have implications,” the late financial maestro Warren Buffett said.
Charlie Munger, vice chairman of Berkshire Hathaway and the company’s second-oldest employee at 99, shares Buffett’s responsibility for managing Berkshire’s operations and finances in a way that achieves an acceptable result over time and preserves the company’s unparalleled staying power when financial panics or severe global recessions occur. Whereas Berkshire can be used as a hedge against inflation, doing so is not ideal.
Warren Buffett, at 92 years old, believes that “big and chronic fiscal deficits have repercussions.”
He insisted that Berkshire had no flaws despite this.
Throughout the decade ending in 2021, the federal government is projected to have collected roughly $32.3 trillion in revenue, while Berkshire paid $32 billion in U.S. corporate income taxes.
A thousand people matching Berkshire’s payments would have eliminated the need for Berkshire and the other 131 million American families to pay federal income taxes, Buffett said. It’s true what they say: you can’t make any money these days.
As long as they keep the big picture in mind, the 92-year-old is optimistic about the US economy.
“Due to my long history of investing, I have seen three decades’ worth of transformation in the United States. I’ve never encountered a situation where it made sense to gamble against the United States over the long haul, despite the American propensity (or passion) for self-criticism and self-doubt.” Indeed, he did express such a view. The chances of any reader having a different experience from the ones described here are quite low.
During his annual letter to shareholders, Buffett reflected on the past year, calling it a “wonderful” year and disclosing the company’s year-end financials, which showed an operating profit of $30.8 billion, an all-time high. For the past fiscal year, the firm lost $22.8 billion.
In his annual shareholder letter, Warren Buffett termed the behavior of financial managers “disgusting” and delivered a “crucial warning” about the sector.
“Last but not least, keep in mind that management may easily inflate our favored operational earnings indicator. CEOs, board members, and company advisers generally view initiatives like this as strategic and wise actions. It’s supported by both academics and the mainstream media.” Indeed, they were his precise words:
“What a despicable thing you’ve done, I say. If one has a strong enough motivation, they can lie about anything.”
Buffett has called it the “shame of capitalism” when fraud is portrayed as “bold inventive accounting.”