Tax cuts boost Berkshire Hathaway book value in 2017

Tax cuts boost Berkshire Hathaway book value in 2017

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

Buffett noted, however, that only $36 billion came from Berkshire's operations.

Berkshire Hathaway reported a $65.3 billion increase in book value over 2017, boosted by a $29 billion gain from changes to the US tax regime.

"You and I are lucky to have Ajit and Greg working for us", Buffett wrote.

Buffett also lamented his inability to find big companies to buy, and said his goal was to make "one or more huge acquisitions" of non-insurance businesses to bolster results.

He let investors know why Berkshire, which is now sitting on a record $116 billion in cash, didn't pull the trigger on any mega-deals previous year. "If Wall Street analysts or board members urge that brand of CEO to consider possible acquisitions, it's a bit like telling your ripening teenager to be sure to have a normal sex life".

Buffett recounted Berkshire's performance in his letter that was released Saturday morning and some noteworthy topics didn't get much attention. Equity holdings include Apple, Wells Fargo and Coca-Cola.

Operating earnings, which excludes some fluctuations in investments and derivatives, slumped 24 percent to $3.3 billion during the fourth quarter compared to the same period a year earlier.

Tax cuts boost Berkshire Hathaway book value in 2017
Tax cuts boost Berkshire Hathaway book value in 2017

A major reason for that decline was a $2.22 billion loss from insurance underwriting, Berkshire's first full-year deficit since 2002, hurt by Hurricanes Harvey, Irma and Maria and wildfires in California. Over the past 53 years, Berkshire has grown its per-share book value at a 19.1% rate compounded annually, better than the 9.9% gain for the S&P 500 stock index, including dividends.

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. And sometimes I will make expensive mistakes.

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

Warren Buffett says the Trump tax cuts passed late a year ago were a huge win for him and his company, Berkshire Hathaway (BRK-A, BRK-B).

Warren Buffett handily won the bet he entered against hedge funds in 2007.

All told, the S^and^P 500 had an overall gain of 125.8% while the group of hedge funds - which have never been publicly named - gained just 27%.

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

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