Warren Buffett criticises Wall Street as Apple investment pays off
Feb 26 2017
"Many of our investees, including Bank of America BAC", -1.42% have been repurchasing shares, some quite aggressively.
Buffett re-emphasized points he's made in the past, such as his advice to avoid high Wall Street fees by investing in low-priced index funds.
During the financial crisis, he bet a founder of the asset management company Protege Partners $1m that a Vanguard S&P 500 stock index fund would outperform several groups of hedge funds of over the 10 years through 2017.
Buffett's chosen index fund has recorded an 85.4 percent gain over than time while the hedge funds delivered an average of 22 percent.
"When a company grows and outstanding shares shrink, good things happen for shareholders", Buffett said.
Despite a roaring stock market in the United States, actively managed mutual funds bled $342 billion last year, their second straight year of outflows.
Buffett said he will continue looking for more acquisitions with Berkshire's roughly $86 billion in cash, but the company's size means it will be hard to match its previous results.
In a letter to Berkshire shareholders, Buffett wrote, "American business - and consequently a basket of stocks - is virtually certain to be worth far more in the years ahead". Concurrent with the posting of the Annual Report, Berkshire will also issue an earnings release.
The company also owns dozens of stocks including Apple Inc, Coca-Cola Co, Wells Fargo & Co and the four biggest USA airlines, and more than one-fourth of Kraft Heinz Co.
But Buffett lavishly praised Berkshire executive Ajit Jain, widely considered a leading CEO candidate, for smoothly running much of the conglomerate's insurance businesses.
Berkshire said it had previously classified such Treasury bills as cash equivalents, noting that they are highly liquid and not that sensitive to interest-rate changes.