The billionaire Warren Buffett, whose stock picks over several decades have turned Berkshire Hathaway into one of the most successful conglomerates in the world, criticised Wall Street on Saturday, saying investors should "stick with low-priced index funds".
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".
In Berkshire's annual report to shareholders posted online Saturday, Chairman and Chief Executive Buffett noted some confusion about his "forever" philosophy.
Mr Buffett, 86, reflected on a $U500,000 public bet he wagered nine years ago against Protégé Partners head Ted Seides over whether a group of five hedge funds or a low-fee index fund that tracks the US S&P 500 would deliver superior returns over a decade.
Buffett said that if the dividend rate on Bank of America common stock, now at 30 cents annually, rises above 44 cents before 2021, Berkshire would anticipate making a cashless exchange of its preferred shares into common.
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Buffett has said operating earnings offer a better view of quarterly performance because they exclude investments and derivatives, which can vary widely.
Buffett insists on a $20 billion cash cushion, in part for protection should natural or man-made catastrophes force big payouts by the company's insurance units. Berkshire said those operating earnings totaled $1.78 per Class B share. If there were ever to be another Ajit and you could swap me for him, don't hesitate.
Buffett said Saturday that Berkshire recorded a 10.7 percent increase in book value and a 23.4 percent gain in stock price in 2016.
Buffett, a vocal supporter of Hillary Clinton, did not mention U.S. President Donald Trump by name in his letter. And he again praised the country's market system for its ability to allow Americans to continue building "mind-boggling amounts" of wealth over time.