Buffett seems to criticize Trump and deplores the shortage of letters in Berkshire's letter

(Reuters) – On Saturday, Warren Buffett blamed US President Donald Trump for over-crediting the country's economic growth, while acknowledging that the market conditions make it difficult for his Berkshire Hathaway Inc. business to find more big companies.

Buffett lamented these situations in his annual letter to Berkshire readers, widely read.

The letter was accompanied by another bad news: the fall in stock prices and a sharp depreciation of the investment of Kraft Heinz Co generated a net loss of $ 25.39 billion in the fourth quarter and brought Berkshire to record its lowest annual profit since 2001.

But many of Berkshire's more than 90 companies, such as car insurer Geico and the BNSF railway, performed well and their quarterly operating profit rose 71%.

Buffett uses his shareholder letters to focus on Berkshire's operations, to emphasize the strength of the US economy and to criticize the thinking and business practices that oppose it.

The 88-year-old Berkshire's success is partly due to the "American tailwind" that allowed the country to "enjoy an almost unbelievable prosperity."

He stated that since he had begun investing in 1942, this prosperity had been overseen by seven Republican Presidents and seven Democratic Presidents, in wartime and financial crisis, and that it had been won over. bipartisan way.

Trump often takes credit for optimistic information about the economy and the stock market, sometimes linking it to his economic policies.

Buffett, who backed Democrat Hillary Clinton during his 2016 White House run, said no one should claim credit when things are going well.

"It's beyond the arrogance for American businesses or individuals to boast of having" acted alone, "Buffett writes.

Buffett also formulated a possible criticism that Trump boasts of US economic performance, including in relation to other countries such as China, where Berkshire is investing in BYD Co., an electric car manufacturer.

According to Buffett, the United States should "rejoice" when other countries have a bright future.

"Americans will be both prosperous and safer if all nations prosper," 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 a long-time investor in Berkshire, said: "It sent an extremely strong message about how open markets and free trade ultimately help all participants to improve their performance. "

LOOKING FOR ELEPHANTS

One of the reasons Buffett is looking to invest abroad is that he struggles to find big investments at home and does not expect this to change soon.

Berkshire has not made a major acquisition since it paid $ 32.1 billion to the Precision Castparts aircraft parts manufacturer in January 2016.

Buffett said the short-term prospects for more acquisitions were "not good" because prices are "exorbitant" for companies that had decent long-term prospects.

While Buffett said that the idea of ​​an "elephant-sized" acquisition made his heart beat faster, the "disappointing reality" was that Berkshire would likely use some of his 111 , 9 billion dollars in cash to buy more shares.

Berkshire ended the 2018 fiscal year with $ 172.8 billion of stock, but many of them suffered a double – digit price drop during the quarter, including a 30 – year decline. % of its biggest stake, the manufacturer of Apple iPhone Inc.

The significant quarterly losses at Berkshire are largely attributable to this decline. Its net profit reached $ 4.02 billion in a full year, compared with $ 44.94 billion the previous year, when it benefited from a lower tax rate.

The accounting rules require Berkshire to report unrealized equity gains and losses against net income, which causes huge quarterly fluctuations that Buffett says are generally meaningless.

Operating income for the quarter was $ 5.72 billion, or $ 3,484 per Class A share, well above analyst expectations, and up 71% to $ 24.78 billion.

Operational activities are overseen by Vice Presidents Greg Abel and Ajit Jain, allowing Buffett and Vice President Charlie Munger, 95, to focus on capital allocation.

The results were also impacted by a $ 3.02 billion write-down of intangible assets that, according to Buffett, was "almost entirely" attributable to Kraft Heinz, in which Berkshire holds a 26.7% interest.

The packaged food company on Thursday shocked investors when it announced a $ 15.4 billion write-down on Kraft, Oscar Mayer and other assets, cut its dividend and said the Securities and Exchange Commission United States was reviewing its accounting practices.

Although dated Saturday, Buffett's letter to shareholders was written well in advance and did not address Kraft Heinz's difficulties or the day-to-day management of this company by 3G Capital, a Brazilian company and Buffett's trading partner.

Berkshire repurchased approximately $ 418 million of its shares during the quarter. It has recovered some losses on its equity holdings this year, although the Standard & Poor's 500 remains 4% below its level at the end of September.