It’s “never been more clear that America is consumed with the need to invest heavily across a variety of industries to power growth in the years to come,” according to a recent Bloomberg article that says Berkshire Hathaway could be the investor America needs.
“Not may companies have the resources to do it in the private sector,” the article says, or even have the expertise needed, but adds that in his annual letter to Berkshire shareholders, Warren Buffett hinted that the conglomerate might be up to the challenge—specifically, he noted that two of the company’s four crown jewels—Burlington Northern Santa Fe Railway Co. and Berkshire Hathaway Energy– are “infrastructure juggernauts.” And thanks in part to the level of ownership in those companies, Berkshire owns more U.S. property, plant and equipment than any other domestic company (with AT&T coming in second).
The article recalls that in the wake of the 2008 financial crisis, Berkshire was a “liquidity provider of last resort” as no other company was in a position to infuse billions of dollars into companies like GE, Goldman, and Bank of America—and Berkshire “was rewarded for its efforts.”
Last March, when the pandemic sent the markets plummeting, the article notes that shifts in monetary and fiscal policy “didn’t give Berkshire the same kinds of opportunities,” which is why it says infrastructure and fixed investment “might become the ideal Berkshire investment opportunity in the years to come.” The article cites the failure of the Texas power grid as an example of America’s need to invest and modernize.
“That could make 2020 inflection point for the company in ways that will only become apparent years from now,” the article says, adding that Berkshire “now finds itself better-positioned than any other company to be a bottomless source of capital for funding whatever opportunities present themselves in a decade where infrastructure investments might define the decade’s economy.”