'Terrible mistake' for long-term investors to be in bonds, Buffett warns

Javier Stokes
March 2, 2018

Berkshire's cash and cash equivalents rose to $116 billion at the end of the year.

USA billionaire Warren Buffet says his conglomerate has received a profit boost of US$ 29 billion as a result of President Donald Trump's tax reforms, he says.

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. Under it, Berkshire Hathaway receives 20% of IAG's consolidated Gross Written Premiums (GWP) and pays 20% of claims.

Buffett is arguably the most important person in the U.S. banking industry.

The underwriting losses were apportioned as $310 million for primary auto arm GEICO, nearly $3.65 billion for the Berkshire Hathaway Reinsurance Group, while the primary insurance arm made an underwriting profit of $719 million. "For that to happen, we will need to make one or more huge acquisitions".

"If you look at our holdings, you would assume that we like them in the order in which they rank by dollar value of holdings, but if you look at them in terms of recent purchases over the a year ago we've bought more Apple than anything else", said Buffett.

Buffett will "make a move" on the market's downturnThe Dow Jones industrial average, S&P 500 and Nasdaq are all lower for the month, but Buffett probably sees the downturn as a buying opportunity, said Cramer.

Berkshire also owns clothing, furniture and jewelry firms.

Buffett said investors shouldn't assume that bonds are less risky than stocks.

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Fourth-quarter net income increased to $32.55 billion from $6.29 billion, or $3,823 per share, a year earlier - but some $29 billion of this was attributed to this tax change which reduced the corporate tax rate to 21 percent from 35 percent.

Book value is a company's basic value, or assets minus liabilities. I found so many nuggets of wisdom - which formed part of a series of posts I wrote titled 'The Buffett Series'.

But he has given himself and long-time vice-chairman Charlie Munger, 94, more freedom to focus on investing and allocating capital.

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.

Buffett said he keeps his hands off investment decisions by Combs and Berkshire's other investment deputy, Ted Weschler.

Berkshire owns almost 10 percent of Wells Fargo's stock, its largest stock holding. But at that time, Buffett said any problems would be temporary and reverse once the US economy started turning around - which it did within the following years.

Buffett said Monday the joint venture with Amazon 's Jeff Bezos and J.P. Morgan 's Jamie Dimon should have a " top-notch CEO within the year".

Buffett said it could take the bank a long time to work its way back into regulators' good graces again. Often, high-grade bonds in an investment portfolio increase its risk. As of this writing, Apple is Berkshire Hathaway's second-largest stock holding at $28.2 billion. "Yet Berkshire shares have suffered four truly major dips", he wrote. He won that bet previous year.

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