Warren Buffett said on Saturday that the U.S. economy is faring far better than he might have predicted early in the coronavirus pandemic, benefiting his conglomerate Berkshire Hathaway Inc (BRKa.N).
Speaking at Berkshire’s annual meeting, Buffett said the economy has been “resurrected in an extraordinarily effective way” by monetary stimulus from the Federal Reserve and fiscal stimulus from the U.S. Congress.
“It did the job,” and 85% of the economy is running in “super high gear,” Buffett said.
But Buffett lamented how an influx of so-called special purpose acquisition companies and inexperienced investors hoping for quick riches have made markets feel more like a “casino,” making it hard for Berkshire to deploy more of its $145.4 billion cash hoard.
The annual meeting was held in Los Angeles, where the 90-year-old Buffett joined Berkshire’s 97-year-old vice chairman Charlie Munger, to answer more than three hours of shareholder questions.
Berkshire scrapped for a second year its annual shareholder weekend in its Omaha, Nebraska, hometown, an extravaganza that normally attracts around 40,000 shareholders. Saturday’s meeting was broadcast online on Yahoo Finance.
Many of Berkshire’s dozens of operating units have been rebounding as anxiety over COVID-19 lessens, more people get vaccinated, stimulus checks are spent, business restrictions are eased and confidence about the economy grows.
Gross domestic product, a broad measure of the U.S. economy, grew at an annualized 6.4% rate from January to March, according to an advance estimate by the government.
Some economists project the economy will grow in 2021 at the fastest rate in nearly four decades.
“People feel good,” Buffett said, in discussing the economic environment. “Charlie and I consider it the most interesting movie we’ve ever seen.”
Munger, for his part, downplayed concern that Congress and the White House might raise the corporate tax rate to 25% or 28%, saying it wouldn’t be “the end of the world” for Berkshire.
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Buffett was markedly more upbeat than at least year’s relatively subdued annual meeting, early in the pandemic.
Saturday’s meeting came after Berkshire said first-quarter operating profit rose 20% to about $7 billion, while net income including investments totaled $11.7 billion.
Results benefited from better-than-expected underwriting at insurer Geico, more shopping at retailers including Berkshire’s car dealerships, See’s Candies and the Nebraska Furniture Mart, and a near-doubling of profit at the Clayton Homes mobile home unit.
But there were signs Berkshire has grown more cautious about the markets.
While Berkshire repurchased $6.6 billion of its own stock from January and March, the pace of buybacks slowed.
Berkshire also said it sold $3.9 billion more stocks than it bought, though it still owned $151 billion of stock in just two companies, Apple Inc (AAPL.O)…
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