Buffett sees no bull market
By Joe Baker
By Joe Baker
As Alan Greenspan and other political economists are predicting an economic turnaround and improving conditions, billionaire investor Warren Buffett forecasts a darker picture.
Reuters reports that Buffett, in his annual letter to shareholders of his operating groupBerkshire Hathaway Inc., a group of 50 or more companiessaid the war on terror never can be won.
Buffett said he sees only skimpy returns from the stock market in the next few years. He also strongly criticized corporate executives for taking millions of dollars from businesses even as they are going under, something he said goes far beyond Enron.
Buffett, 71, said further terror attacks on the U.S. are possible and must be taken into account by insurers. Fear may recede with time, but the danger wont, he said. The war against terrorism can never be won. The best the nation can achieve is a long succession of stalemates, he added.
The Berkshire group, based in Omaha, Neb., had a difficult year in 2001. It reported its net profits were down from $3.3 billion the year before for a net profit in 2001 of $795 million.
The group was hit with $2.4 billion in claims from U.S. policy holders as a result of Sept. 11.
Hereafter, Buffett said, his reinsurance operations, which include General Re, the largest reinsurer in the country, will underwrite only some coverage for terrorist assaults.
Buffett, the second wealthiest of the worlds multibillionaires, said he and his partner, Charles Munger, are disgusted by the situation, so common in the last few years, in which shareholders have suffered billions in losses while the CEOs, promoters, and other higher-ups who fathered these disasters have walked away with extraordinary wealth.
He added that Enron is merely the symbol of stockholder abuse. There is no shortage of egregious conduct elsewhere in corporate America, he said.