Berkshire CEO Warren Buffett, 90, called the U.S. an unrivaled “incubator for unleashing human potential.”
“Despite some severe interruptions, our country’s economic progress has been breathtaking,” Buffett wrote.
The billionaire’s snippets of wisdom came as his conglomeration announced a 23% rise in quarterly profits to $35.84 billion and a net income of $5.02 billion.
|BRK.A||BERKSHIRE HATHAWAY, INC.||400,000.00||+3,999.00||+1.01%|
|BRK.B||BERKSHIRE HATHAWAY, INC.||266.15||+2.67||+1.01%|
Buffett used the latest iteration of his annual publication to highlight some examples of success stories he and his company have seen from middle America over the decades.
“Today, with much of finance, media, government and tech located in coastal areas, it’s easy to overlook the many miracles occurring in middle America,” he wrote.
In Omaha, Neb., where Berkshire is based, Buffett wrote about how a local property-casualty insurance company funded with $125,000 in capital, “somewhat pompously christened as National Indemnity,” overcame handicaps and bigger competitors by taking “odd-ball” policies other companies saw as unimportant. Berkshire acquired the company in 1967.
“Today National Indemnity is the only company in the world prepared to insure certain giant risks,” Buffett wrote. “And, yes, it remains based in Omaha, a few miles from Berkshire’s home office.”
In another Omaha example, Buffett pointed to Rose Blumkin, who emigrated from Russia, settled in Omaha and started a furniture store with $2,500 she’d saved. After World War II, Blumkin and her son, Louis Blumkin, had grown their business, Nebraska Furniture Mart, to $60 million in value by 1983 when Berkshire bought an 80% stake. The family has continued to run the business.
“NFM now owns the three largest home-furnishings stores in the U.S.,” Buffett wrote. “Each set a sales record in 2020, a feat achieved despite the closing of NFM’s stores for more than six weeks because of COVID-19.”
Buffett also pointed to businesses like Clayton Homes and Pilot Travel Centers, which are both based in Knoxville, Tenn. Berkshire outright owns Clayton, while it has a growing stake in Pilot that Buffett said would be 80% by 2023.
Each of those companies was started by young University of Tennessee graduates with little capital, Buffett wrote. Today, they each have annual pre-tax earnings of more than $1 billion.
“When you next flu over Knoxville or Omaha, tip your hat to … the army of successful entrepreneurs who populate every part of our country,” Buffett wrote. “These builders needed America’s framework for posterity … to achieve their potential. In turn, America needed citizens like [those company founders] to accomplish the miracles our founding fathers sought.”