Lower tax rate fuels record profit for Warren Buffett's Berkshire Hathaway


Book value, a metric he's called a "crude, but useful" way to track the conglomerate's worth, climbed 13 percent to $211,750 per Class A share at the end of 2017 compared to three months earlier, the company said Saturday in a statement.

Berkshire Hathaway reported a $65.3 billion increase in book value over 2017, boosted by a $29 billion gain from changes to the USA tax regime.

The rest was a gift from the new USA tax code.

The company's full-year earnings shot up 87 per cent to $44.9bn, though Buffett admitted only $36bn came from Berkshire's operations.

He noted that Berkshire didn't go on a buying "frenzy" and acquire a bunch of companies a year ago, mostly because there were no desirable options that came at a "sensible" purchase price. Sometimes the payoffs to us will be modest; occasionally the cash register will ring loudly. As a result, we recorded an income tax benefit of approximately $29.6 billion and we increased regulatory liabilities of our regulated utility subsidiaries by approximately $6.0 billion for the portion of the deferred income tax liability reduction that we will be required to, effectively, refund to customers in the rate setting process.

Warren Buffett says the Trump tax cuts passed late past year were a huge win for him and his company, Berkshire Hathaway (BRK-A, BRK-B). "In America, equity investors have the wind at their back". Berkshire estimates about $3B in losses from those events.

Ice storm warning in effect
There is a good chance of freezing rain-drizzle through the morning today with high around 25, the National Weather Service said. The beneficial rain could total as much as 5 inches by the start of next week, which would significantly help the drought.

"This table offers the strongest argument I can muster against ever using borrowed money to own stocks".

"There is simply no telling how far stocks can fall in a short period", Buffett said. "Even if your borrowings are small and your positions aren't immediately threatened by the plunging market, your mind may well become rattled by scary headlines and breathless commentary".

Buffett in 2007 bet a founder of the asset management company Protégé Partners LLC $1 million that a Vanguard S&P 500 index fund would outperform several groups of hedge funds over a decade.

Known to fans as "the Oracle of Omaha", Buffett, 87, has suggested United States stocks are probably the best bet over time, encouraging people to make easy choices and stick with them, eschewing high-fee fund managers, for instance.

"Addressing this question is of enormous importance", Buffett wrote. "In the aggregate, do these investors get their money's worth?"