Markets

Warren Buffett Still Has Plenty of Confidence in the American Economy

Warren Buffett Still Has Plenty of Confidence in the American Economy

Buffett's Berkshire was sitting on more than $109 billion in cash at the end of the third quarter of 2017.

On acquisitions, too-high prices were a barrier to almost all deals Berkshire looked at previous year, says Buffett. "The remaining $29bn was delivered to us in December when Congress rewrote the U.S. tax code".

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.

"That. requirement proved a barrier to virtually all deals we reviewed in 2017, as prices for decent, but far from spectacular, businesses hit an all-time high", Buffett noted in his closely watched annual letter to shareholders released Saturday morning.

The billionaire and CEO of Berkshire Hathaway highlighted a $29 billion tax gain for his company, bemoaned a lack of good deals and reminded his readers that owning stocks through low-priced index funds was the best way to build wealth over time. Berkshire also owns scores of businesses that it has acquired over the years, including auto insurer Geico, ice cream retailer Dairy Queen and BNSF Railway Company.

Last month Mr Buffett promoted long-time Berkshire executives Ajit Jain and Greg Abel to vice-chairmen as "part of a move to succession over time". He admitted that the struggle in finding a "sensible purchase price" had "proved a barrier to virtually all deals" previous year. As a result, Berkshire's full-year 2017 net income could jump to an estimated $52 billion, or more than double earnings in 2016.

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.

Treasury yields have been rising since the start of the year, stemming from brewing inflationary pressures and massive bond supply to help fund US President Donald Trump's tax overhaul.

Buffett says using borrowed cash to buy stocks, or "buying on margin", is a no-no for individual investors. The S&P 500 index fund Buffett backed easily outpaced the hedge funds.

In last year's letter, Buffett said Jack Bogle, the Vanguard Group founder considered to be the father of indexing, was the person who had done the most for American investors.

Known to fans as "the Oracle of Omaha", Buffett, 87, has suggested USA 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.


  • Canadian Hockey Player Chucks a Silent Tanty After Losing To Team USA

    Canadian Hockey Player Chucks a Silent Tanty After Losing To Team USA

    The team qualified for the Olympics - a second for Landsteiner and alternate Joe Polo, and a first for Hamilton and George. The only curling medal for Canada in PyeongChang came in mixed doubles where Kaitlyn Lawes and John Morris won gold.

    Cold snap could bring snow next week say Met Office

    Forecaster Liz Gavin said there is an "increased chance of wintery precipitation" next week especially in eastern areas. However, temperatures will begin to drop from tonight with a noticeable return to wintry conditions.
    Red Bull launches new-look F1 vehicle  earlier than usual

    Red Bull launches new-look F1 vehicle earlier than usual

    Daniel Ricciardo said he barely noticed the new Halo device as he got his hands on Red Bull Racing's new RB14 on Monday.
  • Giants receive compensatory pick in 2018 NFL Draft

    Giants receive compensatory pick in 2018 NFL Draft

    The Patriots are set to pick 31st in the first round, and also own two picks in the second round, their own and San Francisco's. At the end of the final round, the Bengals have two picks, while the Chargers, Buccaneers, Cardinals and Falcons each have one.
    Antidepressants are effective in treating mental health, major study finds

    Antidepressants are effective in treating mental health, major study finds

    He reports honoraria from Allergan, Bristol-Myers Squibb, Lundbeck, Otsuka, Pfizer, Servier, Sunovion and Xian-Janssen. A landmark study has found that antidepressants are effective and more people should take them.
    Florida shooting suspect may lose public defender after reports of $800K inheritance

    Florida shooting suspect may lose public defender after reports of $800K inheritance

    They warned politicians they'll vote out lawmakers who don't address school safety. "We took 17 bullets to the heart", Corin said. But no authority put those clues together, and the result was another school shooting that most likely could have been prevented.
  • Dow, S&P climb on energy and industrials; Nasdaq falls

    Dow, S&P climb on energy and industrials; Nasdaq falls

    Volume on United States exchanges was 6.79 billion shares, below the 8.48 billion average over the last 20 trading days. Energy stocks, up 1.08%, also helped support gains, as oil prices advanced on a surprise draw in U.S. crude inventories.
    WNYC/New York, KPCC/LA, WAMU/DC To Resurrect Gothamist, LAist, DCist Websites

    WNYC/New York, KPCC/LA, WAMU/DC To Resurrect Gothamist, LAist, DCist Websites

    In a deal announced on Friday, WAMU is acquiring DCist and plans to revive what it calls the "beloved neighborhood news site". The acquisition was a result of a competitive process and Joe Ricketts was advised on the transaction by Pursuit Advisory.
    Allonzo Trier: Tests positive for banned substance, declared ineligible by NCAA

    Allonzo Trier: Tests positive for banned substance, declared ineligible by NCAA

    He is second to freshman Deandre Ayton for the team scoring lead at 19.6 points per game and second with 3.2 assists. Trier eventually cleared a drug test and was ruled eligible to play beginning with UA's January 21 game at UCLA.
  • McLaren, Ferrari, Merc-AMG reveal 2018 Formula 1 cars

    McLaren, Ferrari, Merc-AMG reveal 2018 Formula 1 cars

    Goss said changing power units was "a big deal" because the differences between the Honda and Renault concepts were so dramatic. If you wish to report any comment, simply click on the down arrow next to the offending comment and click "Report".
    Kylie Jenner Tweet Sends SNAP Stock Sliding

    Kylie Jenner Tweet Sends SNAP Stock Sliding

    Users complained about its unwieldiness, but the company's boss Evan Spiegel argued that fans would get used to the new lay-out. But those meager rewards encourage people to check into social media more frequently, driving viewership and ad sales.

    "Live" photos of smartphone Sony Xperia XZ2 Compact

    The handset is expected to be priced at around £710 ($985), while the Xperia XZ2 Compact should fetch £530 ($740). It also appears that in terms of RAM, two of the models will come with 3GB, while the other will come with 4GB.