Billionaire investor, Chairman, and CEO of Berkshire Hathaway Warren Buffett believes that the US economy is strong. It estimated that the US economy is estimated to be growing at 2% but Warren Buffett believes that it is growing at a faster rate. According to Warren Buffett, the financial strength of Berkshire Hathaway Inc. is getting stronger. Due to the different nature of businesses that Berkshire engages in, Warren Buffett is able to have a birdseye view of the US economy. Speaking to the shareholders of Berkshire Hathaway, Warren insisted that the financial status of the company is about to get better as a direct consequence of the growth of the economy. In the first quarter of 2018, Apple has added 75 million shares. Buffett believes that Apple business is doing very well.
In the annual letter to shareholders of Berkshire, Warren indicated that the company made $65.3 billion gain in 2017. The biggest gain came from the US corporate tax cut that was passed by the government. There were other gains in many other businesses which Berkshire engages in. He writes about non-insurance businesses which had gained over $950 million pre-tax.
90% of the business operations of Berkshire Hathaway are in the United States. This means that the growth witnessed is directly proportional to the economic growth in the country. Warren sentiments put confidence on investors about the future of the economy.
With the US economy currently strong, long-term investors should buy stocks over bonds according to Warren Buffett. He believes that the bonds are not low-risk as it usually said. Inflation has a more significant effect on bonds than on bonds. Warren says that if he were to be given a choice between buying equities and bonds, he would pick equities any day. Equities outperform governments bond over long-term.
Warren Buffett is the most successful stock investor in history.