Value of Buffett's Berkshire Jumps 13 Percent on Trump Tax Cut

by Ben Pena February 25, 2018, 1:23
Value of Buffett's Berkshire Jumps 13 Percent on Trump Tax Cut

He also spent much of the letter explaining Berkshire's results for 2017, which were aided by a huge gain on the recent United States tax overhaul.

A major reason for that decline was a $2.22bn loss from insurance underwriting, Berkshire's first full-year deficit since 2002, hurt by hurricanes Harvey, Irma and Maria and wildfires in California.

Thanks to legislation, signed by USA president Donald Trump in late December, Berkshire Hathaway was able to add an extra $29 billion to its net worth gains.

"Our smiles will broaden when we have redeployed Berkshire's excess funds into more productive assets", Buffett wrote.

Warren Buffett on Saturday said he needs to make "one or more huge acquisitions" to increase Berkshire Hathaway Inc earnings, but admitted that finding a deal at "a sensible purchase price" has become a challenge.

"In his early years, Jack was frequently mocked by the investment-management industry", Buffett said last year.

Berkshire's cash pile swelled to $116 billion from $109 billion in the third quarter.

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But he said the prices asked for businesses past year "hit an all-time high", and Berkshire will be looking for those available at "a sensible purchase price". And Buffett is unwilling to load up on debt to finance deals at current prices.

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".

"(P) rices for decent, but far from spectacular, businesses hit an all-time high" past year, he wrote.

Berkshire's other businesses, which include BNSF railroad, a number of electric utilities and an assortment of manufacturing and retail businesses, helped offset the insurance losses.

"We will stick with our simple guideline: The less the prudence with which others conduct their affairs, the greater the prudence with which we must conduct our own", Buffett wrote. The 87-year old reiterated that while he's "never felt better", the company has a succession plan in the works. What investors then need instead is an ability to both disregard mob fears or enthusiasms and to focus on a few simple fundamentals.

Buffett and Protégé both purchased a face amount of $500,000 in zero-coupon Treasury bonds that cost each of them $318,250 to fund the bet ten-years ago, according to the letter.

Buffett, 87, also avoided dropping any hints about who will take the reins at Berkshire when he retires.

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