Sunday, May 3, 2009

Buffett commends US finance steps

Investor Warren Buffett had said the US government is generally taking the right steps to aid economic recovery.

Mr Buffet was speaking to 35,000 shareholders of his Berkshire Hathaway company at their annual general meeting being held in Omaha, Nebraska.

The value of Berkshire Hathaway's investments fell by nearly 10% in the last year and Mr Buffett's personal wealth shrank by $25bn (£17bn).

He told the AGM he expected the company to make further losses this year.

Speaking at the opening of the meeting, Mr Buffett said it had been "a very extraordinary year" and the economy had experienced "a financial hurricane".

"When the American public pulls back the way they have, the government does need to step in. It is the right thing to do, but it won't be a free ride."

But he said the government had reacted well, telling his investors: "Overall, I commend the actions that were taken."

He said the economy had experienced a "financial hurricane" and no one could expect perfection.

The BBC's North America business correspondent Greg Wood says Mr Buffett is normally greeted by an adoring crowd at the AGM, know as "Woodstock for Capitalists".

But this has been particularly bad year, in which Mr Buffett's legendary stock-picking skills seemed to have deserted him, says our correspondent, especially when he lost nearly $3bn after buying a large stake in oil company ConocoPhillips just before the oil price crashed.

The year was the worst performance in more than 40 years for man known as the "Sage of Omaha".

He has previously said he made some "dumb" investment errors in 2008 and compared the US financial situation to an "economic Pearl Harbour".

Berkshire's range of investments are seen as a bellwether of the US economy.

In a change from previous years, half the questions at the meeting were drawn from email submissions and posed by journalists rather than stakeholders.

Mr Buffett has previously said that neither he nor Vice-Chairman Charlie Munger would know the questions in advance.

"We know the journalists will pick some tough ones and that's the way we like it," Mr Buffett said in a letter to shareholders.

Some people raised questions on the issue of appointing a successor for 78-year-old Mr Buffet.

The company has said it has three internal candidates for Mr Buffett's Chief Executive Officer role and four for Chief Investment Officer.

But Mr Buffett told the meeting he would not name a successor to begin following him now as all candidates were already running businesses and those not appointed would possibly choose to leave the company, the Associated Press reported.

"It'd be a waste of talent. I don't really see any advantages in having some crown prince around," he said.

Despite its troubles, Berkshire Hathaway has fared much better than many other funds in a year of huge stock market declines.

Mr Buffett has said he is prepared to hold his investments for a long time - until they come good, says our correspondent.

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