My column in the FT this week is on the Sage of Omaha:
In the annals of double-edged compliments, Warren Buffett’s description of his planned $27bn acquisition of Burlington Northern Santa Fe as an “all-in wager on the economic future of the US” ranks highly. If the best expression of the future of the US economy is a railway operator dating back to the mid-1800s, then growth investors might be advised to look instead to China, India or Brazil.
Perhaps to balance his criticism of the US trade deficit and doubts about the dollar, Mr Buffett often eulogises the US economic system. “It has unleashed potential as no other system has and will continue to do so. America’s best days lie ahead,” he wrote in his 2008 letter to
shareholders of Berkshire Hathaway.Actions, however, speak louder than words. The BNSF deal is the largest acquisition Berkshire Hathaway has made and comes as 79-year-old Mr Buffett has started to identify possible successors. So it may be the ultimate symbol not only of his investment style but of how he sees his country.
“When investing, pessimism is your friend, euphoria the enemy,” he wrote in the letter and, underneath his optimistic gloss, the deal has a downbeat moral for the US. It is a safe, predictable but somewhat dull market for the global investor with a lot of solid but ageing companies.
Please read the rest here and comment below.
