Investor wrote that ‘it is beyond arrogance for American businesses or individuals to boast that they have “done it alone”’

This article is more than 1 year old

This article is more than 1 year old

The billionaire investor Warren Buffett has used his widely-read annual letter to shareholders to take a swipe at Donald Trump, saying no one person should claim credit when the US economy goes well.

Kraft Heinz share plunge loses Warren Buffett $4bn in one day Read more

Buffett, who supported Hillary Clinton in 2016, wrote that “it is beyond arrogance for American businesses or individuals to boast that they have ‘done it alone’.”

He also makes a possible criticism of the president’s trumpeting of US economic performance relative to, or at the expense of, other countries.

Buffett’s Berkshire Hathaway is an investor in the Chinese electric car maker BYD Co. Trump has targeted China with tariffs and regular criticism. The US, Buffett wrote, should “rejoice” when other countries have bright futures.

“Americans will be both more prosperous and safer if all nations thrive,” he wrote. “At Berkshire, we hope to invest significant sums across borders.”

The White House did not immediately comment.

The investing guru, whose personal fortune is around $83bn according to Forbes, also said he is looking for an “elephant-sized acquisition”, one day after Berkshire Hathaway reported one of its largest quarterly losses in history, taking a multi-billion-dollar write-down on its stake in the food giant Kraft Heinz.

Coupled with other poorly performing stocks, which include Apple, Coca-Cola and Wells Fargo, Berkshire Hathaway’s vast portfolio slid in value in the final three months of the year, registering a net loss of $25.4bn for the quarter.

That is the largest quarterly loss since at least the early 1990s, according to data provider Refinitiv. Berkshire reported a full-year profit of $4bn, down from $44.9bn.

Buffett’s faith in Kraft Heinz may be seen as a rare misstep. Despite consumers’ shift away from pre-packaged food, the 88-year-old investor was still extolling the company’s virtues as recently as last May.

In his annual letter to shareholders, a communique closely scrutinized by investors, Buffett said most targets are too expensive for his tastes. That suggests Berkshire, which sits on a cash reserve valued at $112bn, will likely focus on buying stakes in a variety of companies instead of trying to pull off an outright takeover.

Without a major purchase in more than three years, the conglomerate has ploughed operating earnings into its own shares, a practice Buffett had long eschewed. Last year, Berkshire repurchased $1.3bn of its own stock.

Buffett wrote that it is probable, over time, that “Berkshire will be a significant repurchaser of its shares, transactions that will take place at prices above book value but below our estimate of intrinsic value”.

That is likely to draw the anger of politicians such as Senators Bernie Sanders and Chuck Schumer, who called for limits on corporate stock buybacks in a New York Times op-ed earlier this month.

Buffett wrote on Saturday that he hoped to move much of the company’s excess cash into businesses Berkshire will permanently own. But he warned: “The immediate prospects for that, however, are not good: prices are sky-high for businesses possessing decent long-term prospects.”

Buffett added: “That disappointing reality means that 2019 will likely see us again expanding our holdings of marketable equities.

“We continue, nevertheless, to hope for an elephant-sized acquisition.”