Billionaire Warren Buffett’s word is rare.
The Oracle of Omaha, as he is nicknamed in the financial markets, is a kind of medium or prophet whose prophecies are likely to change the fate of a company on the stock market, shake up the markets or make them forget the problems of the moment. .
At 92, the billionaire has never been more aware of his influence. Therefore, it is rare.
His few interventions are now punctuated by the quarterly results of his holding Berkshire Hathaway (BRK.A) – Get a free report, a conglomerate whose investments are a barometer of the US economy. Companies in which Berkshire Hathaway has an interest or ownership include Apple, Bank of America, Chevron, Citigroup, Coca-Cola, Geico, Occidental Petroleum Corporation, etc.
Recently, the gradual withdrawal of the holding company from the capital of the Chinese manufacturer of clean vehicles BYD has shaken the firm on the stock market.
“I rarely take sides in local issues”
Berkshire Hathaway’s annual general meeting also remains one of the moments when investors are sure Buffett will speak to them and no doubt deliver messages that would bolster investment choices for some, lead others to dare touch a few sectors. economic or to flee from certain assets. .
Buffett’s word is worth gold.
It’s even harder to hear the legendary investor express himself on political or social issues. So, to his surprise, he has just spoken out against the return of the streetcar to his hometown of Omaha, Nebraska, where he lives.
Like any ordinary citizen, he sent a letter to the editor of the Omaha World-Herald, one of the local media, to express his opposition. Buffett doesn’t mince words. He kept his frankness and let it be known that the return of the trams to the city represents a huge economic cost for the municipality. The latter sees trams as an ideal medium to attract young urbanites.
“I rarely take sides on local issues,” the billionaire wrote in his letter titled “Take It to a Vote.” “It’s understandable that many find it unpleasant to be told by a rich 92-year-old man what’s good for his future. I’m going to make an exception on the subject of the tram.”
“It’s a big deal and it’s going to be enormously expensive if it’s implemented,” Buffett said.
He then continued: “For 60 years, I have been interested in the transit industry. In three cities, Dallas, Buffalo, and New Bedford, I was a modest landlord for many years and in other large cities I have been a creditor to public transit operators. I have seen screenings and heard proposals, some from well-meaning promoters and consultants and some from for-profit promoters and consultants. Disappointments have almost invariably followed. Mistakes crept in and costs mounted.”
Berkshire Hathaway owns BNSF, one of the largest railroad companies in the United States.
‘If granted, I will vote no’
“It must be emphasized that public transport makes sense as a matter of social equity. It requires subsidies, but it helps a lot,” Buffett said. But trams, he added, “are expensive and have very limited utility.”
“The population served is actually small and routes are inflexible. Residents may be much better served by extended or more intensive service by the bus system. As population, commerce, and desired destinations change, a The bus system can be redesigned. Trams are mindlessly kept rolling, fueled by huge public subsidies. Mistakes are literally cast in cement.”
He ends his letter by applauding the “good leadership” of the current mayor but believes a vote is needed on “this enormous commitment.”
“If it is granted, I will vote ‘no,'” the billionaire concluded.
You can read the full Buffett letter here.
The streetcar system has been discussed for years in Omaha. The final discussions have taken place recently. the city council passed, by a large majority, its financing through the issuance of municipal bonds last December. This project is valued at $306 million in Omaha. His goal is to build a tram system starting next year.
“There’s no question that people listen to Warren Buffett. I listen to Warren Buffett,” Mayor Jean Stothert told the New York Times. “He is a very intelligent and wise man. But on this issue, he just sees it differently than we do.”
Omaha is one of many American cities bringing back streetcars, a mode of transportation that had gradually disappeared since the 1920s to make way for buses. To attract young people, cities are trying to find more local transportation options.
