No. of Recommendations: 5
Buffett will read Dimon's letter if he hasn't already.
Warren has been highly complimentary of Jamie in the past. I'd wager that Buffett will quote from Dimon's letter at the upcoming annual meeting.
Reading through it now. Pretty good stuff. Sobering.
This jumped out:
"This may be a once-in-a-generation sea change, with material effect.
Of course, there is always uncertainty. I am often frustrated when people talk about today's uncertainty as if it were any different from yesterday's uncertainty. However, in this case, I believe it actually is.
Less-predictable geopolitics, in general, and a complex adjustment to relationships with China are probably leading to higher military spending and a realignment of global economic and military alliances.
Higher fiscal spending, higher debt to gross domestic product (GDP), higher investment spend in general (including climate spending), higher energy costs and the inflationary effect of trade adjustments all lead me to believe that we may have gone from a savings glut to scarce capital and may be headed to higher inflation and higher interest rates than in the immediate past.
Essentially, we may be moving, as I read somewhere, from a virtuous cycle to a vicious cycle."
Potential tough times ahead in other words. Berkshire should do better than most in a world starved for capital.
Looking on the bright side, perhaps we will see more opportunities to intelligently deploy large amounts to capital than we have in the past few decades.
