Warren Buffett plays down rumours he is ready to step down

Ashley Carr
February 25, 2018

In 2017, Berkshire's net worth grew $65.3 billion, boosting its per share book value by 23%, Buffett said in the letter.

Elsewhere in his letter, Buffett said a lack of "sensible" purchase prices had prevented Berkshire Hathaway from making acquisitions in 2017.

The new law cut the corporate income tax rate to 21% from 35%, a change that has seen boosting the earnings of scores of USA companies.

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

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.

For all of 2017, Berkshire's net income rose 87 percent to $44.94 billion. "In part, it's because the CEO job self-selects for "can-do" types", Buffett wrote.

Turning to investments, Berkshire's Apple holding was up to $28.2B at year-end, second only to Wells Fargo at $29.3B. And who will eventually replace the "Oracle of Omaha" as CEO at Berkshire - a conglomerate he has run since 1965 and that owns scores of businesses ranging from battery-maker Duracell to ice cream retailer Dairy Queen to auto-insurer Geico - is of great importance to investors.

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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. The compounded annual return over the last 53 years is 19.1%.

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. And sometimes I will make expensive mistakes.

"We expect Buffett's annual letter to reassure investors that his health remains remarkable and he intends to be around for awhile", said Cathy Seifert, equity analyst at CFRA Research in NY.

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

Buffett in 2007 bet a founder of the asset management company Protégé Partners LLC $1 million that a Vanguard S&P 500 index fund would outperform several groups of hedge funds over a decade.

It's brutal - for the hedge funds.

Buffett urged investors to stick with stocks even though they can be riskier in the short-term.

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