Warren Buffett Warns of Betting Against America, Still Believes in the American Dream

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Warren Buffett CEO of Berkshire Hathaway
Warren Buffett CEO of Berkshire Hathaway

Warren Buffett, billionaire and CEO of Berkshire Hathaway is one of the few billionaires still believing in the American dream. He said in his annual shareholder letter “never bet against America.”

“In its brief 232 years of existence … there has been no incubator for unleashing human potential like America. Despite some severe interruptions, our country’s economic progress has been breathtaking. Our unwavering conclusion: Never bet against America.” Buffett wrote in the letter.

His conglomerate, Berkshire Hathaway, owns the largest value of U.S. assets in property, plant, and equipment. This comparison comes from analysis of other US companies with similar portfolios.
“Berkshire’s depreciated cost of these domestic ‘fixed assets’ is $154 billion. Next in line on this list is AT&T, with property, plant, and equipment of $127 billion,” he wrote.

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The legendary investor noted that his two owned American companies — Berkshire Hathaway Energy and BNSF Railway — earned $8.3 billion in 2020 although the demand plummeted due to the Covid-19 pandemic.

“Your railroad carries about 15% of all non-local ton-miles (a ton of freight moved one mile) of goods that move in the United States, whether by rail, truck, pipeline, barge or aircraft,” Buffett said. “The history of American railroads is fascinating. After 150 years or so of frenzied construction, skullduggery, overbuilding, bankruptcies, reorganizations and mergers, the railroad industry finally emerged a few decades ago as mature and rationalized.”

Warren Buffett on clean energy

Regarding clean energy, Buffett believes BHE will be a leader in the field. The company secured an $18 billion endeavor to replace the outdated grid that is currently transmitting electricity throughout the West.

“Unlike railroads, our country’s electric utilities need a massive makeover in which the ultimate costs will be staggering,” Buffett said in the letter. “The effort will absorb all of BHE’s earnings for decades to come. We welcome the challenge and believe the added investment will be appropriately rewarded.”

Buffett, who started BHE in Omaha, Nebraska, has shifted attention to coastal areas – ‘although Middle America is a ground of miracles.’
“Success stories abound throughout America,” the investor said. “Since our country’s birth, individuals with an idea, ambition and often just a pittance of capital have succeeded beyond their dreams by creating something new or by improving the customer’s experience with something old.”

Last week, Warren Buffett’s right hand Charlie Munger slammed SPACs, GameStop and Robinhood. Berkshire’s vice-chairman said “the world would be better off without them”.