Warren Buffett gained $29 billion in 2017 from Trump's tax reforms

Marcus Newton
February 25, 2018

"But only $36 billion came from Berkshire's operations".

Buffett's letter, which previous year clocked in at 28 pages as opposed to modern-day tweets that now max out at 280 characters, is substantive and insightful, but written in his folksy, easy-to-understand style.

While the announcement provided clarity to Berkshire's succession plan, Wall Street is hungry for additional details.

He noted that Berkshire didn't go on a buying "frenzy" and acquire a bunch of companies past year, mostly because there were no desirable options that came at a "sensible" purchase price.

American tycoon Warren Buffett has played down speculation that he is putting in place plans to step down as boss of conglomerate Berkshire Hathaway, insisting that he has "never felt better".

Warren Buffett's Berkshire Hathaway Inc. was a big victor from the recent tax overhaul.

The fees - typically 2% of the investment's value and 20% of the profits - eat into clients returns, Buffett argued, and said returns do not typically justify those fees compared to the returns an investor could get from a low-priced S&P 500 index fund.

Still, Seifert reminded clients that "the demise or incapability of Warren Buffett would be a negative for Berkshire shares".

More news: Zenit star Domenico Criscito confident of beating Celtic
More news: Rachel McAdams expecting her first child
More news: Jeddah to host Saudi Arabia's 1st public fashion show

Buffett says investors should pay more attention to operating earnings, which exclude the tax changes and investment values, to get a better sense of how Berkshire's 90-odd businesses are performing.

The insurance businesses reported an underwriting loss of $2.2 billion as hurricanes and other natural disasters in 2017 weighed on results, leading to the first annual underwriting loss after a 14-year streak of gains, Buffett said in the letter.

Berkshire on Saturday reported a record quarterly and annual profit, both of which received a $29.1 billion boost from the recent lowering of the USA corporate income tax rate, which reduced its deferred tax liabilities.

Its net earnings rose from $24.07 billion in 2016 to $44.94 billion as of December 31. Berkshire's effective tax rate for 2018 could drop to roughly 20%, down from an estimated 30%, according to Morgan Stanley.

Two men are widely considered the frontrunners: Greg Abel, CEO of Berkshire Hathaway Energy Company, and Ajit Jain, executive vice president of Berkshire Hathaway's National Indemnity Company insurance subsidiary.

Here are five unbelievable wisdoms from Buffett's annual letter for 2017.

Wall Street wants to know why Berkshire, which long eschewed tech stocks and recently dumped virtually all of its massive holdings in IBM, is now so heavily invested in Apple.

Other reports by MaliBehiribAe

Discuss This Article