The Oracle of Omaha, speaking to reporters yesterday after Berkshire Hathaway’s annual meeting, predicted that the credit crunch may have passed its low point.
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Still, he said, the country is in recession and further losses will occur.
Buffett endorsed the Federal Reserve’s bailout of Bear Stearns, saying it prevented “the contagion where you’re going to have runs on investment banks.”
He and his vice chairman, Charlie Munger, agreed that not every troubled financial institution should be rescued. “Capitalism without failure is like Christianity without hell,” Buffett said.
The two sharply criticized bankers, lenders and regulators for allowing the credit crisis to happen.
“Both the regulators and the accountants have failed the rest of us terribly,” Munger said.
Buffett and Munger build Berkshire into a $200 billion holding company, with investments such as Geico, Dairy Queen and Fruit of the Loom. The company has a AAA credit rating.
Yet with surprising candor, Buffett said his own company may not be the best bet for investors.
“Anyone who expects us to come close to replicating the past should sell their stock. It’s not gonna happen,” he said. “You may have something better to do with your money than buy Berkshire.”
Buffett plans to travel to Europe this month to hunt for investments. As Bloomberg reports, he has $35 billion in cash and has complained that he can’t find big enough investments in the U.S.
Berkshire has been investing in the U.K., China and Israel.
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