Warren Buffett: ‘Our Country Has Faced Far Worse Travails’
A paralyzing fear has engulfed the country. But America’s best days lie ahead.
Warren Buffett’s annual letter to Berkshire Hathaway share-holders is a highly anticipated, market-moving event. This year Buffett, who is a director of The Washington Post Company, NEWSWEEK’s parent, offered his views on the brutal business climate. Edited excerpts:
By Warren E. Buffett
Over the last 44 years (that is, since present management took over), the book value of Berkshire Hathaway Inc. has grown from $19 to $70,530, a rate of 20.3 percent compounded annually. But 2008 was the worst of those 44 years for both Berkshire’s book value and the S&P 500 index. The period was devastating as well for corporate and municipal bonds, real estate and commodities. By year-end, investors of all stripes were bloodied and confused, much as if they were small birds that had strayed into a badminton game.
As the year progressed, a series of life-threatening problems within many of the world’s great financial institutions was unveiled. This led to a dysfunctional credit market that in important respects soon turned non-functional. The watchword throughout the country became the creed I saw on restaurant walls when I was young: “In God we trust; all others pay cash.”
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