Buffett upbeat in annual letter, defends buybacks

STORY: In billionaire Warren Buffett’s annual letter to Berkshire Hathaway shareholders, the investor on Saturday signaled he has lost none of his enduring confidence in the U.S. economy, nor his company.

He urged investors to focus on the big picture over the long term, rather than higher inflation and other factors that in 2022 dampened stock prices, though not Berkshire's.

The 92-year-old also said America’s dynamism has benefited Berkshire - which owns dozens of operating businesses including the car insurer Geico, BNSF railroad and well-known consumer brands like Duracell.

Buffett wrote: "I have yet to see a time when it made sense to make a long-term bet against America. And I doubt very much that any reader of this letter will have a different experience in the future."

Buffett also defended stock buybacks – a target of politicians in Washington. Berkshire had repurchased $7.9 billion of its own stock in 2022, signaling confidence it was undervalued.

Buffett, a Democrat, appeared in his letter to indirectly criticize President Joe Biden who this month urged a quadrupling of a 1% tax on corporate stock buybacks that became law in his Inflation Reduction Act last August.

While Biden hasn't demanded an end to buybacks, Buffett said those who claim all repurchases "are harmful to shareholders or to the country, or particularly beneficial to CEOs" are "either an economic illiterate or a silver-tongued demagogue."

The letter was accompanied by Berkshire's year-end results, including a record $30.8 billion operating profit.

But the company also posted a $22.8 billion annual net loss, compared with an $89.8 billion gain in 2021, as the prices of Apple and many other stocks in its vast investment portfolio declined.

In all, Buffett called 2022 a "good year" for Berkshire.