Warren Buffett's letter to Berkshire Hathaway shareholders: 5 things to watch for

Warren Buffett's letter to Berkshire Hathaway shareholders: 5 things to watch for

Warren Buffett's letter to Berkshire Hathaway shareholders: 5 things to watch for

'Only $36 billion came from Berkshire's operations, ' he wrote.

Buffett had a mixed reaction to the tax overhaul passed by Congress a year ago.

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

In his much-anticipated annual letter to shareholders, Buffett explained that the company's net gain of $65.3 billion in 2017 was only partly due to his employees' efforts.

Here's what to watch for in the latest letter from Buffett, 87, which is set for release online Saturday at 8 a.m.at Berkshire's home page http://www.berkshirehathaway.com/. But the biggest contributor to the $29 billion windfall, by far, was Berkshire's huge unrealized gains on stocks (a net figure of more than $100 billion at yearend) and a tax item that goes with them.

Finding things to buy at a "sensible purchase price" had become a challenge, he wrote, and a major reason Berkshire was awash with $116bn of low-yielding cash and government bonds.

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

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

Buffett also said that while Berkshire's insurance holdings would take a $2 billion after-tax hit from losses caused by hurricanes past year in Florida, Texas and Puerto Rico, other reinsurance companies did far worse.

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

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

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. As a result, Berkshire's full-year 2017 net income could jump to an estimated $52 billion, or more than double earnings in 2016.

Most of Berkshire's 90-odd businesses reported improving profits in the quarter, but the company's key insurance units, which include Geico and several major reinsurance companies, reported a $491 million loss on policy underwriting.

Here are five fantastic wisdoms from Buffett's annual letter for 2017. Berkshire bought 31.2 million more shares of Apple in the final three months of 2017, upping its stake by 23% and boosting its holdings to 165.3 million shares.

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