That’s why Warren Buffett no longer comments on controversial political issues

Unlike in previous years, Buffet is now exercising caution when it comes to political issues
Buffett’s reason: protecting the company
Berkshire’s Insurance Division: ‘No Answer for Nuclear War’

Warren Buffett often comments on numerous economic issues that move the international capital markets. His investment wisdom – as well as his good living thinking skills – are legendary and have influenced millions of investors. He also often warned of the growing economic inequality in the USA and the danger of a global nuclear war. Recently, however, Buffett has been reluctant to comment on politically charged issues. The “Oracle of Omaha” recently announced its caution.

Berkshire Hathaway’s Annual General Meeting – A day of Buffett wisdom

After the last two general meetings had to be held virtually due to the pandemic, Berkshire Hathaway was able to invite its shareholders again to the so-called “Woodstock for capitalists” at the end of April. The numerous companies that belong to Buffett’s investment holding company Berkshire presented all kinds of goods, many events such as a fun run offered the supporting program – but of course the Q&A with the two investment legends Warren Buffett and Charlie Munger was the focus of interest.

Among other things, Buffet announced the strong purchase of Apple shares and an arbitrage deal regarding the takeover of Activision Blizzard by Microsoft, in which Berkshire is speculating on the success of Microsoft’s purchase plans. The 91-year-old star investor also justified his rejection of cryptocurrencies such as Bitcoin, Ether and Co. But Buffett said nothing about the Ukraine conflict. He also kept a low profile with regard to the renewed threat of the use of nuclear weapons.

Viewers watched with interest as Buffett justified his reticence on politically charged issues. What reasons does Buffett cite?

Buffett doesn’t want to harm Berkshire companies with his own opinions

Buffett wants to protect Berkshire’s companies through his silence on geopolitical issues: “I don’t want to say anything that is essentially attributed to Berkshire and let someone else bear the consequences of what I’m talking about,” citing Buffett’s statements in the context of “Yahoo Finance”. the shareholders’ meeting. He continued, “I’m not blindly trusting my citizenship when I accept the job as CEO of Berkshire. But I’ve also learned that you can make a lot more people angry for a long time than you can make temporarily happy by talking about anything.” Topic speaks. And on certain topics, they will take it out on our companies.”

“Best to shut up”

Buffett, currently the fifth freest man in the world with a fortune of around 118 billion US dollars according to “Forbes”, is known for his balancing character. He has a keen interest in harmony within the Berkshire Hathaway “family” and each company has its own management. In contrast to other billionaires such as Peter Thiel or Elon Musk, Buffett does not attract attention with provocations or boasts – recently Buffett was even full of praise for his billionaire colleagues Musk and Jeff Bezos.

It is precisely this interest in harmony that makes the investor legend act cautiously: “Why on earth do I want to hurt the people in this other room who are doing all sorts of things for Berkshire? Why do I want to hurt you? Because I say something which 20 percent of the country will object to immediately. And sometimes they get so angry with us that they try to campaign against our companies.” Buffett’s bottom line is, “Basically, the best thing you can do is shut up and not see a bunch of people face consequences they didn’t cause in the first place.”

Berkshire’s insurance business would be directly affected by potential nuclear attacks

However, the current geopolitical debate about the potential use of nuclear weapons by Putin’s Russia could also have direct economic dimensions for Berkshire. Taken together, Berkshire’s insurance division is one of the largest insurance companies in the world, and Buffett’s investment vehicle has developed a considerable market share in the past few decades, particularly in the area of ​​reinsurance. Most recently, Buffett bought US insurance company Alleghany for $11.6 billion.

Consequently, possible nuclear attacks could also affect Berkshire directly. But Buffett has no direct answer to this danger: “There will be more accidents related to nuclear [Waffen] give – we’ve come close several times,” Buffett warned at Berkshire’s annual meeting. But, “There’s nothing we can do about it.”

The chairman of Berkshire’s insurance arm, Ajit Jain, agrees with his CEO: “When it comes to a nuclear thing, I surrender it’s very difficult for us to assess how bad it can be,” Buffett’s confidant Jain quoted Yahoo Finance as saying. “A very large number of different exposure lines will be affected.” For this reason there is legal uncertainty in the insurance industry about how possible damage from nuclear attacks can be insured. Jain emphasizes that Berkshire tries to exclude potential nuclear attacks as an insured risk in all contracts. However, Jain suspects, “If something like that happens, I’m still pretty sure the regulators and the courts will hold it against the insurance company, and we’ll end up having to pay.”

Buffett adds with black humor: “But then there will probably be no more regulators or anyone else.”

Editorial office finanzen.net

Image Credits: Paul Morigi/Getty Images for Fortune/Time Inc, Michael Buckner/Getty Images