Warren Buffett criticises Wall Street as Apple investment pays off

Andrew Cummings
February 26, 2017

Warren Buffett's Berkshire Hathaway released its closely-watched annual letter on Saturday, in which the Oracle of Omaha told investors that the holding company's investment gains would continue to be "substantial" in the coming years. Operating earnings per Class A equivalent share fell to $2,665 from $2,843 in the a year ago period. That overshadowed the 6 percent profit decline at Berkshire's operating businesses.

Analysts on average had forecast operating profit of $2,716.60 per share, according to Thomson Reuters I/B/E/S. (AAPL.O) stands at more than $1.6 billion after shares of the iPhone maker surged.

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.

Combs alerted Buffett to Precision Castparts, and Buffett may discuss what drove Berkshire's unexpected, multi-billion-dollar investments in Apple Inc and the four biggest USA airlines.

But Buffett lavishly praised Berkshire executive Ajit Jain, widely considered a leading CEO candidate, for smoothly running much of the conglomerate's insurance businesses.

Since then, Jain has "created tens of billions of value for Berkshire shareholders".

The insurance units ended 2016 with $91.6 billion of float, the amount of premiums held before claims are paid, and which Buffett uses to fund acquisitions and other investments.

That sum now tops $100 billion, likely reflecting a giant transaction last month with the insurer American International Group Inc.

The railroad has been stung by falling coal and industrial volumes, and shed 2,000 jobs, or 4.5 percent, last year.

His Berkshire Hathaway (BRK.A) continued to grow at a double-digit rate, after all, and the 86-year-old billionaire draws further reason for optimism from USA history.

Berkshire's airline investments suggest that Buffett has overcome his two-decade aversion to the sector after an unhappy - though, he has said, profitable - investment in US Air Group.

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