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Buffett says bet on natural juices

And no, he’s not talking about companies making fruit juice.

Warren Buffett, the billionaire chairman of Berkshire Hathaway has said that the US economy was coming back because of the natural juices of capitalism and not because of government. “We have a wonderful system that eventually is self-cleansing and always moves forward”, he said, in an interview with Business Wire’s Cathy Baron Tamraz.

In his annual letter to shareholders, Buffett said that Berkshire would keep its foot to the floor on capital spending as the company takes advantage of opportunities in the US. Berkshire spent US$9.8 billion on plant and equipment in 2012 as it bolstered its railroad and energy units, and is likely to exceed that amount this year, said Buffett, adding, “Opportunities abound in America.”

“We went from a wooded land to an incredible, absolute abundance of riches” because the U.S. has had a system that can “unleash human potential,” he said. “Never bet against what humans can accomplish if they’re operating in the right soil. And we have the right soil.”

While many have credited the US government with kick-starting the US economy, Buffett obviously believes that entrepreneurs and companies alike are the driving force in the recovery.

You only have to look at projections that recent oil and gas finds in the US will see it become energy self-sufficient in the not-to-distant future, and may even become a net exporter of oil and gas – which is a huge threat to Australia’s LNG companies like Woodside Petroleum (ASX: WPL), Origin Energy (ASX: ORG), Santos Limited (ASX: STO) and Oil Search Limited (ASX: OSH).

Foolish takeaway

The rise and domination of their industries by companies like Apple, Google, Amazon, Microsoft and Exxon to name but a few, show the US manages to overcome many of the economic issues facing the country, and US companies continue to prosper. It would be hard to bet against them.

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The Motley Fool’s purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead.  This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. Motley Fool writer/analyst Mike King owns shares in Woodside and Origin.

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