Government actions serve economy well, Buffett says
OMAHA, Neb. – Billionaire Warren Buffett spent Saturday praising the decisions U.S. officials made to right the economy in the midst of a “financial hurricane” and defending the ones he made to help his company navigate the storm.
The state of the economy and Berkshire Hathaway Inc.’s recent performance were among the first things addressed at the shareholders meeting. Roughly 35,000 people packed an arena and overflow rooms to listen to Buffett and Berkshire Vice Chairman Charlie Munger answer questions for more than five hours.
“Overall, I commend the actions that were taken,” Buffett said. But he said no one should expect perfection because the economy experienced a “financial hurricane.”
But Buffett said he can’t predict how quickly the economy and the markets will improve. He said last fall that the U.S. was facing an “economic Pearl Harbor.”
“It’s been a very extraordinary year,” he said.
The economy and the state of the company, which last year had its worst year since Buffett took over in 1965, were on the minds of many shareholders.
Berkshire’s Class A stock lost 32 percent in 2008, and Berkshire’s book value – assets minus liabilities – declined 9.6 percent, to $70,530 per share. That was the biggest drop in book value under Buffett and only the second time its book value has declined.
But despite Berkshire’s rough year – which was depressed by unrealized multibillion-dollar derivative losses – the company still outpaced the market index Buffett uses as a measuring stick. The S&P 500 fell 37 percent in 2008.
Berkshire reported a 2008 profit of $4.99 billion, or $3,224 per Class A share. That was down 62 percent from the previous year.
The meeting began as usual with a movie, but instead of the traditional comical cartoon, Berkshire offered a reassuring message from animated versions of its products.
An animated Mrs. See of See’s Candy told the crowd that it didn’t seem right to have a humorous cartoon when so many things in the world don’t seem sweet.
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