3/3 © Reuters. FILE PHOTO: Berkshire Hathaway Chairman Warren Buffett (left) and Vice Chairman Charlie Munger at Berkshire’s Annual Shareholder Buying Day in Omaha 2/3
By Jonathan Stempel and John McCrank (Reuters) – Warren Buffett said on Saturday that the US economy is doing much better than it could have predicted at the start of the coronavirus pandemic and that the improvement is benefiting his conglomerate, Berkshire Hathaway. Inc. (NYSE 🙂 Speaking at the Berkshire annual meeting, Buffett said the economy has been “resuscitated in an extraordinarily effective way” by monetary stimulus from the Federal Reserve and fiscal stimulus from the US Congress. “It did the job,” Buffett said, adding that 85% of the economy is running at “super high speed.” The annual meeting was held in Los Angeles, where Buffett, 90, joined Berkshire’s 97-year-old vice president, Charlie Munger, in answering more than three hours of questions from shareholders. Berkshire canceled for the second year its annual shareholders weekend in its hometown of Omaha, Nebraska, a spectacle that normally draws around 40,000 shareholders. Saturday’s meeting aired on Yahoo Finance. Many of Berkshire’s dozens of operating units have recovered as COVID-19 anxiety subsides, more people are vaccinated, stimulus controls are spent, trade restrictions are eased and confidence in the economy grows. Gross domestic product, a broad measure of the US economy, grew at an annualized rate of 6.4% from January to March, according to an early government estimate. Some economists project that the economy will grow in 2021 at the fastest rate in nearly four decades. Buffett had been relatively dovish at last year’s annual meeting, despite expressing confidence that the country’s historic resistance to big trouble, which he called the “American miracle,” would prevail again. The Berkshire meeting came after the company said first-quarter earnings rose 20% to about $ 7 billion, while net income, including investments, totaled $ 11.7 billion. Results benefited from better-than-expected underwriting at Geico, plus purchases at retailers, including Berkshire car dealers. See’s Candies and Nebraska Furniture Mart, and nearly doubling profits at the Clayton Homes mobile home unit. Berkshire also bought back $ 6.6 billion of its own shares in the first quarter, after a record $ 24.7 billion last year. Despite the buybacks, Berkshire ended March with $ 145.4 billion in cash. Buffett’s last major acquisition was more than five years ago. Shareholders at the meeting were expected to vote on proposals that require Berkshire to disclose more about its efforts to address climate change and promote diversity and inclusion in its workforce. Buffett opposes both proposals. It controls nearly a third of Berkshire’s voting power, and the proposals are likely to be rejected.