Buffett Downplays Impact of Election
May 01 2016 - 8:16PM
Dow Jones News
By Anupreeta Das
Longtime Democrat Warren Buffett doesn't sound that worried
about the prospect of a President Donald Trump.
The chief executive of Berkshire Hathaway Inc. told shareholders
Saturday that "Berkshire will continue to do fine" under an
administration led by either Mr. Trump or Hillary Clinton. Both are
their parties' front-runners in the current presidential campaign.
Mr. Buffett has already endorsed Mrs. Clinton.
The country, he said, is headed in the right direction and "no
presidential candidate or president is going to end it."
Concerns are mounting in boardrooms across the U.S. about the
populist rhetoric dominating the Republican and Democratic races.
Berkshire has large operations in several regulated industries,
including insurance, energy and freight trains.
When asked Saturday if Mr. Trump would be a problem for
Berkshire, Mr. Buffett quipped: Mr. Trump's impact on Berkshire
"won't be the main problem," drawing laughter from the tens of
thousands of shareholders gathered for Berkshire's annual meeting
in Omaha, Neb. But then he played down the actual impact.
"We've operated under price controls, we've had 52% federal
taxes applied to our earnings," he said. But "[in] the end,
business in this country has done extraordinarily well for a couple
hundred years. It has adapted to society and society has adapted to
business."
Mr. Buffett and Berkshire Vice Chairman Charlie Munger were
quizzed for more than five hours by shareholders as well as a panel
of analysts and one of journalists. It gave the duo ample
opportunity to air their pet themes and well-established views on
everything from presidential politics and investment banking to Mr.
Buffett's love of Cherry Coke.
"Removing your own beverage consumption from the equation,
please explain directly why we Berkshire shareholders should be
proud to own Coke?" a shareholder asked. Berkshire is Coca-Cola
Co.'s largest shareholder, with a 9% stake valued at roughly $18
billion. Shareholders regularly point out the widely accepted
negative health effects of sugar.
Mr. Buffett defended his Coke habit as well as the company,
saying that he chooses to get his daily calories from "things that
make me feel good when I eat them and that's my sole test." Those
who contend that it is bad to ingest large amounts of calories from
sugary drinks are making a "spurious" case, he said.
"I've not seen evidence that convinces me I'll be more likely to
make it to 100 if I suddenly switched to water and broccoli," said
Mr. Buffett, who gets 700 of his daily calories from fizzy drinks
and often jests that he is one-quarter Coke.
Mr. Munger, a Diet Coke fan, was more blunt, calling it
"immature and stupid" of people to "measure the detriment without
considering the advantage."
For the first time, Berkshire streamed the Q&A over the web,
hoping to attract a wider, global audience. Mr. Buffett earlier
said he decided on the move after last's year record attendance of
44,000 strained the downtown Omaha venue's capacity. Tens of
thousands of shareholders showed up in person, braving springtime
rain and long lines before the doors opened early Saturday
morning.
Shareholders slipped in and out of the main hall to shop for
special-edition wares sold by many of Berkshire's more than 80
businesses, buying $1 Dilly Bars from Dairy Queen or $107 cuff
links from Borsheims. Berkshire, a holding company with diverse
operations, continues to grow and make large acquisitions.
Many Berkshire businesses set up booths inside a massive
exhibition hall, selling or displaying their products. Companies
such as Coke and Kraft Heinz Co., in which Berkshire owns large
stakes, shared floor space with companies it owns fully, such as
undergarment maker Fruit of the Loom and aircraft-components maker
Precision Castparts Corp.
The billionaire spent much of this year's meeting dwelling
largely on the basics of Berkshire's assorted businesses, from its
railroad to its retailers. Mr. Buffett reported the conglomerate's
first-quarter net income rose 8% to $5.6 billion, helped by a gain
tied to the acquisition of Duracell from Procter & Gamble
Co.
Earnings at its core railroad and insurance operations fell,
leading to a drop in operating profit, which excludes the impact of
certain investments. He said BNSF Railway Co., one of the biggest
U.S. freight railroads, has been grappling with lower coal
shipments that cut into earnings and revenue during the first
quarter and would likely do so for the rest of 2016.
(END) Dow Jones Newswires
May 01, 2016 20:01 ET (00:01 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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