Berkshire energy chief Abel receives $17.5 million compensation

"Last year, we had two fellows that tied - one of them knew a lot about basketball, the other didn't know anything about basketball - but they each got $50,000 out of it", Buffett said. Buffett said companies should be more transparent about the price it is willing to repurchase shares at.

"In 2016 Berkshire's insurance unit reported an underwriting profit for the 14th consecutive year and continues to generate substantial no-cost float of $92 billion available for investing (increasing to over $100 billion including an AIG reinsurance transaction)", Gelb wrote. He told CNBC that "Apple strikes me as having quite a sticky product, and an enormously useful product to people that use it".

After nine years, Buffett's index fund is up by 85.4 per cent, while the selection of the five funds is up 22 per cent.

Unless other stock buyers have changed, Berkshire would be Apple's fifth-largest shareholder, behind investment firms Vanguard, 6.43 percent; BlackRock, 4.22 percent; State Street, 4.19 percent; and FMR, 3.01 percent, according to Yahoo Finance.

The billionaire devoted a large section of his widely read Berkshire Hathaway shareholder letter to arguments against stock pickers that charge high management fees and fail to beat the broader market. Buffett said he and Berkshire Hathaway vice-chairman, 93-year-old Charlie Munger, believed dark clouds often rained gold.

Of his friends, Buffett says, only ordinary investors tend to heed this recommendation.

Buffett revealed on Monday during an appearance on CNBC that Berkshire Hathaway Inc. had purchased about 120 million shares of Apple Inc.in 2017 and that USA stocks were not in 'bubble territory'.

Last month, the legendary investor revealed he has added $12bn (£9.6bn) worth of stock to Berkshire Hathaway since the U.S. election in November.

Also in the letter, Buffett, 86, copped to buying a company that lost all of its value, not something investors would expect from the money making legend.

Buffett then described how he "atoned" for that mistake by buying a majority stake in utility MidAmerican Energy for all cash in 2000.

In the fourth quarter, Dow Chemicals converted Berkshire's $US3 billion preferred stake to more than $US4 billion of common shares, resulting in a gain of about $US1.2 billion and boost to total profit. "That means $1 million invested in those [hedge] funds would have gained $220,000".

In 2016 Berkshire Hathaway earned 27.5 billion dollars in net worth. That doesn't count $28 billion worth of Kraft Heinz, which is owned more indirectly.

  • Carolyn Briggs