Warren Buffett says ‘never bet against America’ in letter touting Berkshire’s US assets

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90-year-old “Oracle of Omaha” Warren Buffett remains a staunch supporter of the American Dream, declaring in his closely watched annual letter to shareholders to “never bet against America”.

“In its brief 232 years of existence … there has been no incubator to unleash human potential like America,” Berkshire Hathaway Chairman and CEO wrote in a letter published on Saturday. . “Despite serious disruptions, our nation’s economic progress has been mind-blowing. Our unwavering conclusion: never bet against America.”

Buffett shared a fact in the letter to illustrate Berkshire’s American credentials. He said the conglomerate owns the highest amount of US assets (tangible fixed assets) by value than any other company in the country.

“Berkshire’s depreciated cost of these national ‘fixed assets’ is $ 154 billion. Next on this list is AT&T, with tangible fixed assets of $ 127 billion,” he wrote.

The billionaire pointed to Berkshire’s two 100% US-owned companies – BNSF Railway and Berkshire Hathaway Energy (BHE) – which earned $ 8.3 billion in 2020 despite falling demand amid the Covid-19 pandemic.

“Your railroad carries approximately 15% of all non-local ton-miles (one ton of freight carried over a mile) of freight moving through the United States, whether by rail, truck, pipeline, barge, or plane, ”Buffett said. “The history of America’s railways is fascinating. After about 150 years of rampant construction, scuffling, oversizing, bankruptcies, reorganizations and mergers, the rail industry finally emerged a few decades ago as mature and streamlined. “

Buffett believes BHE will be a leader in providing clean energy in the future. BHE launched an $ 18 billion effort to rework and expand a substantial portion of the outdated grid that now carries electricity across the West, Buffett noted.

“Unlike the railways, our nation’s electric utilities need a massive overhaul in which the ultimate costs will be staggering,” Buffett said in the letter. “The effort will absorb all of BHE’s benefits for decades to come. We welcome the challenge and believe the additional investment will be appropriately rewarded.”

Buffett reminded investors that miracles are happening in Central America despite great attention being paid to coastal areas. After all, the legend started his conglomerate in Omaha, Nebraska and his head office remains based in Cornhusker State.

“Success stories abound across America,” said the legendary investors. “Since the birth of our country, individuals with an idea, an ambition and often just a mouthful of capital have succeeded beyond their dreams by creating something new or improving the customer experience with something old. .

The annual letter, a tradition for Buffett for six decades, offers a new perspective on the market after a historic rebound from the depths of the pandemic on the heels of an unprecedented revival.

Buffett began a search for bargains in the midst of the market’s comeback. He recently took a significant position in Chevron, a classic value game, while adding Verizon as well as a handful of drug stocks. Apple is still the largest common stock investment in the conglomerate, which has played a significant role in offsetting pandemic damage to Berkshire’s rail and insurance business in 2020.

Berkshire repurchased $ 9 billion of its own shares in the third quarter of 2020, bringing the company’s total buybacks to $ 15.7 billion through September – a record year for buybacks.

The conglomerate is still sitting on a massive war chest with over $ 145 billion at the end of the third quarter. Berkshire put a small chunk of the cash stack to good use in July with its purchase of Dominion Energy’s natural gas transmission and storage assets.

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