Warren Buffett praises effect of immigration on US economy
Billionaire investor Warren Buffett has heaped praise on the contribution of immigrants to the US economy, and expressed confidence that American companies will continue to grow in years to come.
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Buffett outlined his thoughts for the year ahead in his annual letter to shareholders of his investment firm Berkshire Hathaway, also detailing the $17.6bn earned in 2016.
The 86-year-old painted an optimistic view of the prospects ahead for the US economy, at a time when all the major indices on Wall Street are hitting record numbers, despite predictions by many that Donald Trump's rise to the presidency would eventually harm businesses.
"One word sums up our country's achievements: miraculous," Buffett wrote. "From a standing start 240 years ago...Americans have combined human ingenuity, a market system, a tide of talented and ambitious immigrants, and the rule of law to deliver abundance beyond any dreams of our forefathers."
The investor and philanthropist was characteristically bullish on the future of the US economy, but did recognise that the capitalist system pioneered by the country naturally leads to a certain amount of failed companies.
"Many companies, of course, will fall behind, and some will fail. Winnowing of that sort is a product of market dynamism," the investor added. "Moreover, the years ahead will occasionally deliver major market declines – even panics – that will affect virtually all stocks."
"American business – and consequently a basket of stocks – is virtually certain to be worth far more in the years ahead. Innovation, productivity gains, entrepreneurial spirit and an abundance of capital will see to that."
The so-called "Trump rally" has seen the Dow Jones, S&P 500, and the Nasdaq all record all-time highs in recent weeks, but some analysts are predicting a sharp decline as the President's policies become reality as we delve deeper into 2017.
"The US stocks are set for new records on the count down to Donald Trump's speech," said London Capital Group's Ipek Ozkardeskaya. "On the other hand, the very high level of expectations suggests a rising risk of disappointment, which in turn could trigger a sharp sell-off in the US equity markets that have been running to records since Trump won the US presidential election in November."