Buffet Is Somber & Gloomy @ Berkshire Meeting: Says Worst Is To Come

http://www.nytimes.com/2009/05/03/business/03buffett.html?_r=1&hp

Buffett Says Bets May Cost His Company Money


By REUTERS
Published: May 2, 2009

OMAHA (Reuters) — Warren E. Buffett acknowledged Saturday that his company, Berkshire Hathaway, would probably lose money on some of the derivatives contracts that have prompted some analysts to speculate that the world’s most famous investor has lost his touch.

At Berkshire’s annual shareholder meeting, Mr. Buffett offered a gloomy forecast for parts of the American economy and Berkshire itself, and he said federal efforts to stimulate activity could pay off at a possible cost of higher inflation.

“It has been a very extraordinary year,” Mr. Buffett said. “When the American public pulls back the way they have, the government does need to step in.” He added, “It is the right thing to do, but it won’t be a free ride.”

The meeting attracted a record 35,000 people to downtown Omaha to see Mr. Buffett, the world’s second-richest person.

But it had a decidedly more serious and somber tone from years past as many investors expressed worries about the economy, Berkshire’s investments, and how long Mr. Buffett, 78, planned to stay on the job.

Mr. Buffett said that housing prices had yet to stabilize broadly, that retailers may be under pressure for a “considerable period of time,” and that he would not buy most American newspaper companies “at any price.”

He also said that in insurance, which represents about half of Berkshire’s operations, the earnings power “was not as good last year as normal” and “won’t be as good this year.”

Mr. Buffett also said that the four candidates to succeed him as Berkshire’s chief investment officer failed to outperform the Standard & Poor’s 500-stock index last year but that he remained confident they could perform well over time. Berkshire still has three internal candidates to succeed him as chief executive.

Berkshire’s stock has fallen 39 percent since December 2007. Profit last year fell 62 percent from a year earlier. Mr. Buffett said he would not buy back Berkshire stock because its price is not “demonstrably below” the company’s intrinsic value.

Mr. Buffett had transformed Berkshire since 1965 from a failing textile maker into a conglomerate with close to 80 businesses that sell things like Geico car insurance, paint, ice cream and underwear. It also has tens of billions of dollars of investments.

Charles T. Munger, vice chairman of Berkshire, on Saturday defended the decision by Bank of America’s chief executive, Kenneth D. Lewis, to complete the acquisition of Merrill Lynch and not to disclose Merrill’s mounting losses before the merger closed. “I think the Treasury people behaved honorably and intelligently, and so did Bank of America.”

In addition, Mr. Buffett said that “we were dealing with a fragile situation,” and that if Bank of America had backed away, Merrill might have suffered a fate similar to that of Lehman Brothers, which went bankrupt.

 

......................"at least until I get to breakeven and flat on my trades" :eek:

 

He keeps talking about an economic war. Who is the war with? If he knows something, he should be much more clear.

 

He has, up until this date, lost 25 billion personally.

http://news.bbc.co.uk/2/hi/americas/8030727.stm

 

YES......he knows about the "FINANCIAL GRID TAKEDOWN!" :eek: I guess he never thought he would be a part of THEIR collateral damage!