Warren Buffett praises new Berkshire vice chairmen in annual letter

Sean Reid
February 25, 2018

Said Buffett in Saturday's annual letter: "You and I are lucky to have Ajit and Greg working for us".

Buffett bemoans the acquisition frenzy on Wall Street that's been fueled by extraordinarily cheap debt, making it hard to find possible acquisitions at a "sensible purchase price".

Berkshire's cash pile swelled to $116 billion from $109 billion in the third quarter. "For that to happen, we will need to make one or more huge acquisitions".

Buffett predicted the company's stock will fall again by similar large declines in the next 53 years.

In his annual letter to shareholders, the billionaire investor wrote: "Berkshire's gain in net worth during 2017 was $65.3bn".

Buffett went on to extol Berkshire's investing methods.

He also leveled criticism at what he called the "can-do" type of Wall Street CEO, who he said can be over eager to justify gobbling up another company.

"In America, equity investors have the wind at their back", he said.

It's important to remember that even Buffett's Berkshire Hathaway (BRK-A, BRK-B) hasn't been immune to significant swings in its stock price either.

It has been more than two years since Buffett made a major purchase, the $32.1 billion takeover of aircraft parts maker Precision Castparts Corp, and his advancing age gives him less time to find more of the "elephants" he prefers. Jain will run all of Berkshire's insurance businesses; Abel will run all of its non-insurance businesses. "Each has been with Berkshire for decades, and Berkshire's blood flows through their veins".

While the Wells Fargo investment has struggled in recent months because of scandals over how it treats customers, Apple has performed better.

The company's full-year earnings shot up 87 per cent to $44.9bn, though Buffett admitted only $36bn came from Berkshire's operations.

Buffett supported Hillary Clinton, a Democrat, in the 2016 USA presidential election.

"It is a awful mistake for investors with long-term horizons.to measure their investment "risk" by their portfolio's ratio of bonds to stocks", Buffett wrote in the February 24 letter. Operating profit, however, fell 18 percent to $14.46 billion, hurt by a rare loss from insurance underwriting.

Even so, insurance float, or premiums collected before claims are paid, and which give Buffett more money to invest, rose 25 percent previous year, to $114.5 billion.

Other reports by

Discuss This Article