> Warren Buffett Blog: February 2018

Monday, February 26, 2018

Warren Buffett 2017 Shareholder letter

Berkshire has just released its shareholder letter for 2017.

Berkshire’s gain in net worth during 2017 was $65.3 billion, which increased the per-share book value of both our Class A and Class B stock by 23%. Over the last 53 years (that is, since present management took over), per share book value has grown from $19 to $211,750, a rate of 19.1% compounded annually.

The format of that opening paragraph has been standard for 30 years. But 2017 was far from standard: A large portion of our gain did not come from anything we accomplished at Berkshire.

The $65 billion gain is nonetheless real – rest assured of that. But only $36 billion came from Berkshire’s operations. The remaining $29 billion was delivered to us in December when Congress rewrote the U.S. Tax Code. (Details of Berkshire’s tax-related gain appear on page K-32 and pages K-89 – K-90.)

After stating those fiscal facts, I would prefer to turn immediately to discussing Berkshire’s operations. But, in still another interruption, I must first tell you about a new accounting rule – a generally accepted accounting principle (GAAP) – that in future quarterly and annual reports will severely distort Berkshire’s net income figures and very often mislead commentators and investors.

Read the full 2017 Share holder letter here.

Wednesday, February 21, 2018

Teva shorts run to cover | Berkshire buys Teva stake

It has been revealed that Warren Buffett's Berkshire Hathaway made a $358 million investment in Israel-based drug company Teva Pharmaceutical Industries.

Since the drug industry has not traditionally been a big focus for Berkshire, it suggests the investment is led by Combs, 47, and 55-year-old Weschler, the younger generation of stock pickers to which the 87-year-old Buffett has been giving more power over Berkshire's giant portfolio of stock bets, said Lawrence Cunningham, author of Berkshire Beyond Buffett: The Enduring Value of Values.

Monday, February 19, 2018

Buffett buys more Apple stock and Sells IBM

Warren Buffett has increased his stake in Apple by adding 31 million Apple shares in the last three months of 2017, while drastically cutting his stake in International Business Machines Corp. (IBM), according to new 13F SEC filings.

Buffett’s investment firm, Berkshire Hathaway, ended the year with 165.33 million Apple shares, collectively worth some $27.6 billion. Berkshire Hathaway is now Apple’s fourth-largest institutional investor. The firm began buying Apple stock in early 2016.

Meanwhile, Berkshire Hathaway sold off around 35 million shares of IBM in the fourth quarter, and entered 2018 with just 2.05 million shares. The firm began buying up IBM stock in 2011, and at one point held more than 80 million shares.

Monday, February 12, 2018

BlackRock to launch a Buffett style Berkshire Fund

BlackRock is planning to launch a fund designed to replicate the private equity approach of Warren Buffett’s firm Berkshire Hathaway.

It is understood the new fund, which is set to be called the BlackRock Long-Term Private Capital fund, will buy and hold stakes in companies and will be the firm's first direct-investment vehicle.

The launch was first reported by the Wall Street Journal which stated that BlackRock Long-Term Private Capital fund will aim to raise $10 billion (£7.2 billion) from sovereign wealth funds, pensions and other big investors.

The global head of active equities at the firm Mark Wiseman, who is also chairman of BlackRock Alternative Investors, is set to take charge of the new strategy.