Capitalism is working fine in reshaping the world: Buffett

Though many economic pundits are still skeptical about global recovery, Berkshire Hathaway Chairman Warren E Buffett thinks such aberrations are normal in capitalism.

Speaking at a CII Karnataka organized gathering in the City, Buffett said there will be set backs like recession, European debt crisis, 9/11 and unfortunate disasters like the tsunami in Japan, but most economies in the world will push forward and make progress over a long term perspective.

“In my long experience of investing I have seen several upheavals in the stock markets. This is quite natural in capitalism. But the strategy should be focused on fundamental strengths over a 10 to 20 years perspective,” said Buffett, the legendary investment guru who is on a three-day India tour.

Expressing his incompetence to prescribe any growth model for India, Buffett said that the fundamental to development in any society is to create equal opportunity for all individuals in terms of education, health, shelter etc, and India is no exception.

Explaining his management mantra for companies where he makes substantial investments, he said “I just hire best people to mange the business, they do all the hard work and we (Bekshire) enjoy the gains.” “Is there anything better than this?” he asked jocularly. “Letting people free is the best way to unleash their imagination and innovative creativity,” he said.

Earlier in the day, Buffett met Chief Minister of Karnataka who invited him to invest in Karnataka. Asked what his own assessment was on the impact of the Japanese cr0isis on the re-insurance sector, he said, “Much of the loss is uninsured... It is a wild guess at this point, but I would say that it will be probably be between half a billion and one billion dollars.

To put that in perspective, Katrina (hurricane) cost US$3 billion. It is a significant amount of money, but it is not what I call a super catastrophe from the financial standpoint,” he said.