Published: Fri, March 02, 2018
Sci-tech | By Javier West

Tax cut brings $29bn to Buffett's company

Tax cut brings $29bn to Buffett's company

Annual shareholder letters are usually meant to pump the stock of the company concerned.

Over the weekend, everyone was forced to spend their Saturday perusing grandpa Warren's annual letter which was mercifully shorter than usual.

Berkshire's cash and cash equivalents rose to $116 billion at the end of the year.

Buffett's Berkshire Hathaway, along with Amazon.com and JPMorgan Chase, said in late January that they planned to start a joint venture to improve health care for their workers.

Cramer said it didn't sound like Buffett was super confident. And yet his $116bn in the bank does suggest he is now trying to do just that, or at least be very patient in anticipation of a major slump in stock prices.

Buffett has always been highly critical of the high fees charged by hedge fund operators. When they're sold, you pay tax on that.

Buffett explained the reason, in part, for the gain. These lessons are a gift to investors.

"Berkshire's blood flows through their veins", Buffett wrote.

In six of the ten years, the S&P500 index outperformed every one of five of Protege's selected funds.

Buffett said this "purcasing frenzy" was being fuelled by "can-do" chief executives, egged on by analysts and board members.

The event is marked by the attendance of scores of Warren Buffett admirers who line hours before the investment guru's and Berkshire CEO Warren Buffett's speech
Buffett's Berkshire Hathaway reports record profit

Buffett flagged risks associated with bonds.

Known to fans as "the Oracle of Omaha", Buffett, 87, has suggested US stocks are probably the best bet over time, encouraging people to make easy choices and stick with them, eschewing high-fee fund managers, for instance. Often, high-grade bonds in an investment portfolio increase its risk.

But where does all this wisdom leave the average Gulf-based investor today?

Berkshire wholly owns dozens of companies, and holds significant shares in large and diverse corporations, while Buffett's newsletters are read with intense interest on Wall Street and beyond.

Buffett said investors shouldn't assume that bonds are less risky than stocks.

Why keep all that cash? Known as the "Oracle of Omaha" - after his birthplace in the Midwestern state of Nebraska - he is one of the world's most successful investors and one of its richest men.

Buffett, 87, also avoided dropping any hints about who will take the reins at Berkshire when he retires. But its stock price came back with a vengeance afterwards. That's a lot of growth over a long time - more than half a century. "The interesting thing is you could go to the top business schools and none are studying and teaching what Warren has done".

Consistent with his overall views on investing in what he perceives to be solid businesses, Buffett noted in the letter that he and his partner Charlie Munger approach stock trades in a similar way. Will it carry on beating the market as he has so spectacularly in the past 53 years? "He participated probably more in the discussion than I did, but I love the idea of tackling what I regard as the major problem in our economy", Buffett said.

Buffett gave the final details of a 10-year long bet he made against hedge funds in 2007.

Like this: