Buffett concluded with a little advice to fellow investors: 'Though markets are generally rational, they occasionally do insane things, ' he wrote.
"Thus, upon the enactment of the TCJA, we included a net income tax benefit in our 2017 earnings of approximately $28.2 billion". Careful decisions and an aversion to debt and speculation has gotten the firm this far - and that's the course it'll stay on, he said.
"P$3 rices for decent, but far from spectacular, businesses hit an all-time high" previous year, he wrote.
Buffett bemoans the acquisition frenzy on Wall Street that's been fueled by extraordinarily cheap debt, making it hard to find possible acquisitions at a "sensible purchase price". "In the meantime, we will stick with our simple guideline: The less the prudence with which others conduct their affairs, the greater the prudence with which we must conduct our own".
"If Wall Street analysts or board members urge that brand of CEO to consider possible acquisitions, it's a bit like telling your ripening teenager to be sure to have a normal sex life". "Buffett doesn't dwell very long on the politics", Smead said.
Buffett and Charlie Munger's aversion to using leverage may have "dampened" their returns over the last 53 years, but the long-term focused investors don't seem all that bothered by it.
Amateur investors who put their money in low-priced index funds can beat the so-called "smart money" hedge funds charging extraordinary management and performance fees.
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.More news: James Harden visited Timberwolves locker room postgame to check on Jimmy Butler
"Performance comes, performance goes".
As for other Berkshire operations, Buffett this year is refraining from going through them on an individual basis.
Buffett also warned long-term investors including pension funds, college endowments and "savings-minded individuals" that even with US stock prices near record highs, it would be a "terrible mistake" to assume bonds are safer.
Buffett, 87, also avoided dropping any hints about who will take the reins at Berkshire when he retires.
Warren Buffett is stepping down from the board of directors of Kraft Heinz Co.
Warren Buffett said in his annual letter the practice of managing portfolio risk using a specified ratio of bonds-to-stocks is flawed. Jain will run all of Berkshire's insurance businesses; Abel will run all of its non-insurance businesses.
"Berkshire's blood flows through their veins", Buffett wrote.