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Warren Buffett slams Trump in his acclaimed yearly letter to Berkshire Hathaway shareholders

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Warren Buffett on Saturday appeared to fault U.S. President Donald Trump for taking too much credit for the nation’s economic growth, while acknowledging that market conditions are making it tough for his Berkshire Hathaway Inc to find more big companies to buy.

Buffett lamented these states of affairs in his widely read annual letter to Berkshire shareholders.

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Accompanying the letter was more bad news, that sinking stock prices and a big writedown for the company’s Kraft Heinz Co investment fueled a $25.39 billion fourth-quarter net loss, and caused Berkshire to post its lowest annual profit since 2001.

But many of Berkshire’s more than 90 businesses, such as the Geico auto insurer and BNSF railroad, performed well, and quarterly operating profit rose 71 percent.

Buffett uses his shareholder letters to focus on Berkshire’s operating businesses, tout the strength of the U.S. economy, and criticize thinking and business practices that get in the way.

The 88-year-old said Berkshire’s success has been in part a product of “the American tailwind” that has enabled the country to enjoy “almost unbelievable prosperity.”

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He said that since he began investing in 1942, that prosperity has been overseen by seven Republican and seven Democratic presidents, through times of war and financial crisis, and gained in a bipartisan manner.

Trump often takes credit for upbeat news on the economy and stock market, sometimes tying them to his economic policies.

Buffett, who supported Democrat Hillary Clinton in her 2016 White House run, said no one person should claim credit when things go well.

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

Buffett also made a possible oblique criticism of Trump’s bragging about U.S. economic performance, including relative to other countries such as China, where Berkshire invests in electric car maker BYD Co.

The United States, according to Buffett, should “rejoice” when other countries have bright futures.

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“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 was not immediately available for comment. Berkshire did not immediately respond to a request for comment.

Thomas Russo, a partner at Gardner Russo & Gardner in Lancaster, Pennsylvania and longtime Berkshire investor, said: “It sent an extraordinarily strong message about how open markets and free trade end up helping all participants do better.”

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LOOKING FOR ELEPHANTS

Part of the reason Buffett may be looking to invest abroad is that he is struggling to find big investments at home, and does not expect that to change soon.

Berkshire has not make a major acquisition since paying $32.1 billion for aircraft parts maker Precision Castparts in January 2016.

Buffett said the near-term prospects for more acquisitions were “not good,” because prices are “sky-high” for businesses that had decent long-term prospects.

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While Buffett said the thought of an “elephant-sized” acquisition causes his heart to beat faster, the “disappointing reality” was that Berkshire would likely in 2019 use some of its $111.9 billion of cash to buy more stocks.

Berkshire ended 2018 with $172.8 billion of equities, but many of these suffered double-digit price declines in the quarter, including a 30 percent slide in its largest holding, iPhone maker Apple Inc.

Those declines were a major factor in Berkshire’s huge quarterly loss, and its 91 percent drop in full-year net income to $4.02 billion from $44.94 billion the prior year, when it benefited from a lower corporate tax rate.

Accounting rules require Berkshire to report unrealized stock gains and losses with net income, causing huge quarterly swings that Buffett says are usually meaningless.

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Operating profit in the quarter totaled $5.72 billion, or $3,484 per Class A share, topping analyst forecasts, and for the year rose 71 percent to $24.78 billion.

The operating businesses are overseen by Vice Chairmen Greg Abel and Ajit Jain, freeing Buffett and Vice Chairman Charlie Munger, 95, to focus on capital allocation.

Results also were hurt by a $3.02 billion writedown for intangible assets that Buffett said was “almost entirely” attributable to Kraft Heinz, in which Berkshire owns a 26.7 percent stake.

The packaged food company on Thursday shocked investors when it reported a $15.4 billion writedown for Kraft, Oscar Mayer and other assets, slashed its dividend, and said the U.S. Securities and Exchange Commission was examining its accounting practices.

While dated Saturday, Buffett’s shareholder letter is written well in advance, and did not discuss Kraft Heinz’s travails or the day-to-day management of that company by 3G Capital, the Brazilian firm and Buffett business partner.

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Berkshire bought back about $418 million of its stock in the quarter. It has recouped some losses on its stock holdings this year, though the Standard & Poor’s 500 remains 4 percent below where it was at the end of September.

Reporting by Jennifer Ablan, Trevor Hunnicutt and Jonathan Stempel in New York; Editing by Andrea Ricci


Report typos and corrections to: [email protected].
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Here are the two Trump claims that the Pentagon chief refused to vouch for

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The White House meeting Wednesday afternoon didn't go well for either party, according to their counterparts. Both sides are dishing on details, including a Democratic aide who said that there were two of President Donald Trump's claims that his own Pentagon chief wouldn't vouch for.

At the onset of the meeting, Sen. Chuck Schumer (D-NY) began by reading a quote from Gen. James Mattis, who briefly served in Trump's administration.

"But POTUS cut Schumer off," reported PBS News correspondent Lisa Desjardins. Trump then "said that Gen Mattis was: 'the world’s most overrated general. You know why? He wasn’t tough enough. I captured ISIS. Mattis said it would take 2 yrs. I captured them in 1 month."

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Former Clinton lawyer scolds Trump’s White House counsel on impeachment: ‘we never considered’ behaving this way

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On Tuesday, Lanny Breuer, a special counsel who worked for President Bill Clinton's White House, wrote an open letter in the Washington Post to President Donald Trump's White House Counsel Pat Cipollone — telling him that, while he understands an impeachment is a horrible thing for an administration to go through, Clinton and his lawyers would never have behaved the way Trump is now.

"In 1998, we felt under siege," wrote Breuer. "We argued at the time, as you do in your letter, that Congress should provide additional procedural protections to the president ... For example, instead of conducting its own investigation, the committee relied almost exclusively on [independent counsel Ken] Starr’s report, which had serious flaws. The House took only three months to adopt articles of impeachment, and we had only two days to present our witnesses. The president’s personal lawyer, David Kendall, had only 30 minutes to question Starr. We felt this was deeply unfair and a derogation of the House’s constitutional duty to investigate thoroughly whether impeachment was warranted."

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White House leaked ‘insane letter’ to Fox host — that makes Trump look ridiculously ‘dumb’

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President Donald Trump was ridiculed on Wednesday after a letter was leaked that President Donald Trump sent to Turkish President Recep Erdo?an.

The letter was sent a week ago, on October 9th.

A copy of the letter, where Trump warned Erdo?an not to be a fool, was obtained by Fox Business personality Trish Regan.

https://twitter.com/trish_regan/status/1184559361638748161

Commentary on the letter was swift -- and brutal.

Here's some of what people were saying:

https://twitter.com/chrislhayes/status/1184570895043571713

Can’t tell if parody of dumb guy trying to cover his tracks or real dumb guy who is covering tracks

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