His company reported a quarterly profit of $35.5 billion and announced that the company had bought back $4.4 billion of its own shares
Warren Buffett criticized US authorities for handling the turmoil in the banking sector. According to him, problems with the US debt ceiling will lead to a crisis in the financial system, reports Reuters.
Buffett made his comments during Berkshire’s annual shareholder meeting.
Buffett criticized the way politicians, regulators and the press reacted to the bankruptcies of Silicon Valley Bank, Signature Bank and First Republic Bank, saying their “very bad” announcements needlessly scared depositors.
“Fear is contagious,” he commented, adding that “you can’t run an economy” when people worry about whether their money is safe in the banks.
In his view, regulators did the right thing by guaranteeing all deposits at Silicon Valley Bank. Another scenario, he believes, would be “catastrophic.” He also believes that bank shareholders and managers should bear the risks of bank mismanagement.
“A lit match can start a fire or it can be blown out,” says Buffett. “There should be punishment for people who have made mistakes,” he added.
Buffett also warns of growing opposition in Washington, which puts the US economy at risk. He points out that he can’t even begin to imagine the consequences if policymakers and regulators “disrupt the global financial system,” including if Washington fails to break the impasse and raise the U.S. debt ceiling.
Berkshire, meanwhile, reported a quarterly profit of $35.5 billion. The company also announced that it had bought back $4.4 billion of its own stock — a sign that it believes the stock is undervalued.
Meanwhile, the company sold $13.3 billion worth of shares to other companies during the quarter, which saw the S&P 500 rise 7%. In the last six months, the company has sold some banking shares and is cautious about the sector, commented Warren Buffett.
Berkshire’s investee businesses may perform worse in 2023 than in 2022 as economic activity slows, he said. He stresses, however, that the company compensates with income from other investments, such as Treasury bills.
Buffett is the sixth richest person in the world and has run Berkshire since 1965. Businesses the conglomerate invests in include insurance, railroads, consumer goods, the oil sector, and more. Berkshire also owns $328 billion, or nearly 50 percent, of Apple Inc.
At the meeting, Buffett reaffirmed that Greg Abel will succeed him as CEO and that he has no plan B if Abel steps down.
2023-05-07 09:10:00
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