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Warren Buffett: America Is Not in Trouble

Turn on the news, and it would be justified to think America is going down the toilet.

Political turmoil in Washington.

National debt reaching all-time highs ($17.1 trillion at last count).

Just last fall, Donald Trump has said "Right now, frankly, the country isn't doing well. Recession may be a nice word." 

Warren Buffett disagrees. Strongly.

Putting his money where his mouth is
In 2009, during the depths of the recession, Buffett's Berkshire Hathaway purchased the railroad, Burlington Northern Santa Fe (BNSF), for $44 billion. And when the acquisition in 2009 was announced, Buffett said it wasn't just a bet on the success of BNSF or the railroad industry but:

Most important of all, however, it's an all-in wager on the economic future of the United States. I love these bets. 

The same people preaching doom-and-gloom today doubted Buffett's bet. Those doubters were wrong. Earnings from the railroad have risen by 30% over the last three years. The bet on America paid off:

Source: Company Investor Relations.

Buffett's "bets" on the United States haven't slowed down.

In February of last year Berkshire Hathaway acquired a 50% stake in Heinz for $12 billion.

Its energy unit purchased Nevada energy supplier, NV Energy for $5.6 billion.

And that $18 billion even excludes the $3.1 billion in bolt-on acquisitions made last year -- mostly on American companies. 

But even with investments topping $20 billion, it doesn't just stop there. Berkshire Hathaway made a record $11 billion in purchases of property, plant and equipment in 2013, with nearly 90% of it here in the United States.

Buffett said "though we invest abroad as well," the reason behind this was that, "the mother lode of opportunity resides in America." All of this is to say, Buffett made more than $30 billion in investments in the United States in 2013 alone.

Two weeks ago, at the Berkshire Hathaway annual meeting, Buffett said, "I think American business is doing extraordinarily well."

The key takeaway
Buffett has also said:

Indeed, who has ever benefited during the past 237 years by betting against America? If you compare our country's present condition to that existing in 1776, you have to rub your eyes in wonder. And the dynamism embedded in our market economy will continue to work its magic. America's best days lie ahead.

The United States has always faced questions about its future since it began. Yet it have been blessed by continued progress, innovation, and growth. In 2008, Buffett said "Buy American. I Am" and that mind-set continues today. So go ahead, bet against Buffett. But I wouldn't.

What Warren Buffett is actually buying
Buffett has shown time and time again with his dollars and his his actions he believes in America. And he is so confident in one company's can't-live-without-it business model -- a company that rents a very specific and valuable piece of machinery for $41,000... per hour (that's almost as much as the average American makes in a year!) -- he just loaded up on 8.8 million shares. An exclusive, brand-new Motley Fool report details this company that already has over 50% market share. Just click HERE to discover more about this industry-leading stock... and join Buffett in his quest for a veritable landslide of profits!

Read/Post Comments (8) | Recommend This Article (6)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 18, 2014, at 12:46 PM, Elll wrote:

    This sounds like "What's good for Berkshire Hathaway is what's good for America." Seems like I've heard something like that before, and it wasn't exactly right.

  • Report this Comment On May 18, 2014, at 1:10 PM, AlNewman wrote:

    "In February of last year Berkshire Hathaway acquired a 50% stake in Heinz for $12 billion."

    I went to a Dairy Queen the other day (a Berkshire Hathaway owned Corp) and got HUNTS Ketchup with my fries....why is this?

  • Report this Comment On May 18, 2014, at 1:12 PM, marke54805 wrote:

    Rich keep getting richer... what the hell! Yeah?

  • Report this Comment On May 18, 2014, at 1:14 PM, AdmitYourGuilt wrote:

    Buffet has invested in specific companies for specific, individual reasons. He won't live to see the fruits of a continued radical progressive jihadist movement.

  • Report this Comment On May 18, 2014, at 2:07 PM, flackattack1 wrote:

    Come on out Buffet bashers. Be sure to forget how well he did during the Nixon, Reagan, and both Bush presidencies. He is confident in America's future, even during somewhat dark times, and that is bad why? Oh yeah, because you don't like his politics because he has the nerve to say that things are out of wack on taxation and compensation issues. Remember that the millionaires you are trying to support all made serious money since 2009.

  • Report this Comment On May 18, 2014, at 2:54 PM, Fight4Justice wrote:

    Buffet is of a position that is indirectly related to that of the average citizen and as such very much wants you and me to think all is well when in fact all is anything but well for the masses. Many, if not most, people no longer trust the US government, no longer believe it works in the interest of the American people and in fact believe that the US is no longer a democracy but an oligarchy. The future for the average citizen is one with a much lowered standard of living, a limited, to negligible, level of individual liberties and no hope of ever regaining the American Dream. You may scoff at these assertions but each of you, whether you admit it or not, has serious misgivings of what has transpired over the past fifteen years and what the future holds for you and your family.

  • Report this Comment On May 19, 2014, at 3:28 AM, beast6228 wrote:

    Says the man who has companies all over the World. and doesn't care where his money comes from. I hope when the old Buzzard kicks the bucket all of his overseas companies go belly up.

  • Report this Comment On May 19, 2014, at 3:36 PM, veritasvincit wrote:

    Thank you TMFMorris, for reminding us of Buffett's truthful and profound statements about American resiliency.

    If only the disenchanted and cranky commenters above could look at the facts surrounding Buffett and his actions! Too bad they didn't follow Buffett's advice in 2008 to "Buy American; I Am". Imagine what their equity portfolios would look like now! Imagine if they'd bought shares of BRK.B at any point during the recession. Oh, well.

    How anyone who purportedly supports the improvement of the middle class's standard of living could find fault with Berkshire Hathaway's incredible investments in America's future is beyond me.

    Any nation can be compared to a human body. Occasionally it can become ill; hopefully, it can heal itself without permanent scars. The recent Great Recession isn't America's first rodeo. We've already healed substantially, and will continue to.

    Apparently, there are Fools and there are damned fools! Buy low, sell high; repeat.

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Patrick Morris

After a few stints in banking and corporate finance, Patrick joined the Motley Fool as a writer covering the financial sector. He's scaled back his everyday writing a bit, but he's always happy to opine on the latest headline news surrounding Berkshire Hathaway, Warren Buffett and all things personal finance.

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