Buffett Assails Money-Manager Fees as Berkshire Reports Profit Rise

While Miles doesn't fully understand Buffett's newfound interest in Apple - Buffett has long steered away from tech companies and instead toward steady, dividend-paying stocks - he was "comforted" to hear the 86-year-old speak on CNBC this morning ... Altogether, he realized about $37.5 million from the sale of Apple shares in February.

"I'll repeat what I've both said in the past and expect to say in future years: Babies born in America today are the luckiest crop in history".

"If a statue is ever erected to honor the person who has done the most for American investors, the hands-down choice should be Jack Bogle", Buffett wrote. For example, the single largest mutual fund holder of Apple is the Vanguard Total Stock Market Index Fund, a passive index fund that had 109.5 million shares at the end of January (Apple is its largest holding).

Buffett devoted most of his letter to describing the evolution of Berkshire and the performance of the Omaha, Nebraska-based company past year.

Berkshire's net earnings rose almost 15% in the fourth quarter, boosted in part by the stock market's end-of-year gains, but the conglomerate's results were roughly flat for the full year.

Buffett said Berkshire still had about $86bn of cash and equivalents, despite recent heavy spending on Apple and airline stocks.

The Berkshire (BRKA) chairman and CEO said that even if no one wins the grand prize, he'll also award a $100,000 prize to whoever gets the furthest in guessing the winners in the NCAA men's college basketball tournament.

Billionaire Warren Buffett says his company bought more than $9 billion of airline stocks because he believes they are operating more efficiently than they used to. He criticized executives who are willing to repurchase shares at any price, holding up Berkshire's model as an example where shares will only be repurchased if the market value of the company declined to 120% or less of the book value. The stock was up slightly in premarket trading on Monday. That's up from $5.48 billion, or $3.65 per Class B share.

In the letter he's very optimistic about the growth of the United States economy and spoke highly of immigrants and their contributions.

Buffett used the letter to again explain the advantages of low-priced index funds. "Of course, 1,000 monkeys would be just as likely to produce a seemingly all-wise prophet". Investors pulled a net $342.4 billion from US -based actively managed funds a year ago, according to Morningstar, while pouring a record $505.6 billion into USA -based passively managed funds.

After nine years of the 10-year bet, the index fund selected by Buffett is up 85.4 percent, and the average of the five hedge funds is a distant second - up 22 percent.

Trump might agree that these economic systems make America great, but Buffett thinks America is getting better.

"Early Americans, we should emphasize, were neither smarter nor more hard working than those people who toiled century after century before them".

  • Zachary Reyes