NO ELEPHANT IN THE ROOM
But Buffet said he would not get caught short of cash that he could use should market conditions deteriorate. Some of Buffett’s transactions over the last decade or so have included complex deals with distressed companies, including in the aftermath of the global financial crisis.
Buffett’s insurance business, meanwhile, collects premiums from businesses and individuals, cash that Buffett and his deputies use to make other investments.
But the US stock market has been on a stride since the financial crisis a decade ago, leaving little room for the bargain-hunting value investor to make his mark, much as had been the case for Buffett during the run-up in technology stocks in the 1990s.
Buffett often invests in stocks, such as Apple Inc , when he cannot find whole companies to buy. On Saturday, he said his inability to find a company to buy meant more stock buying is likely in 2019.
The Omaha, Nebraska, investor has also been snapping up more shares of his own stock. Berkshire bought back about $1.3 billion of its common stock in 2018, the company said.
But Buffett slammed corporate bosses who buy stock back when prices are lofty. Stock buybacks “should be price-sensitive,” and “blindly buying an overpriced stock is value-destructive, a fact lost on many promotional or ever-optimistic CEOs,” Buffett said in the closely watched letter.
Several US lawmakers have proposed restricting share buybacks, saying companies are incurring debt or wasting money to prop up their stock prices, while not making investments in their business or properly paying employees. Companies often argue they are just returning cash they cannot use to shareholders who can put the money to work.