Famed investor and Berkshire CEO Warren Buffett in his annual letter to Berkshire Hathaway shareholders highlighted the best bets of his career and defended his group’s stock buybacks.
Buffett said who criticize stock buybacks are “either an economic illiterate or a silver-tongued demagogue” or both, adding that all investors benefit from buybacks provided they are made at right prices.
“Buybacks are beneficial to shareholders, if made at value-accretive prices,” writes Buffett in his annual letter to shareholders.
“Our shareholders will continue to save and prosper by retaining earnings,” he writes.
Buffett writes in the letter that during his almost 60 years, some of his mistakes have been mitigated by “very large doses of luck.”
The noted investor gives a valuable lesson to investors: “The weeds wither away in significance as the flowers bloom”. “Over time, it takes just a few winners to work wonders. And, yes, it helps to start early and live into your 90s as well,” he said.
The 92-year-old also defended buybacks after the US government imposed a 1% tax on them last year, and President Biden signaled his support for raising it to 4%.
Buffett and his conglomerate bought back nearly $8 billion of Berkshire shares last year, spending a record $27 billion on them in 2021, and around $25 billion in 2020. With these buybacks, Berkshire emerged as one of the largest repurchasers in recent years in the US.
“When you are told that all repurchases are harmful to shareholders or to the country, or particularly beneficial to CEOs, you are listening to either an economic illiterate or a silver-tongued demagogue (characters that are not mutually exclusive),” Buffett said.
