Lower tax rate fuels record profit for Buffett's Berkshire

Bill Pugliano  Getty

Buffett also said that while Berkshire's insurance holdings would take a $2 billion after-tax hit from losses caused by hurricanes a year ago in Florida, Texas and Puerto Rico, other reinsurance companies did far worse. The compounded annual return over the last 53 years is 19.1%.

Behring also said the board looks forward to continuing its partnership with Buffett's Berkshire Hathaway.

Most of Berkshire's 90-odd businesses reported improving profits in the quarter, but the company's key insurance units, which include Geico and several major reinsurance companies, reported a $491 million loss on policy underwriting.

Berkshire attributed roughly $29.11 billion of its net income to the reduction of the USA corporate tax rate, to 21 percent from 35 percent, that President Donald Trump signed into law in December.

Warren Buffett published his annual letter on Saturday, and it came with some of the usual trimmings: sage advice and reflections on the past year's success. "The remaining $29 billion was delivered to us in December when Congress rewrote the US Tax Code".

But he said the prices asked for businesses a year ago "hit an all-time high", and Berkshire will be looking for those available at "a sensible purchase price".

At the end of his letter Buffett reiterated that Berkshire will be in good hands after his eventual departure.

The letter, which was notably shorter than in years past, meditated on the investing lessons that the Berkshire chairman and chief executive officer thinks people should take away from his charitable bet against Protege Partners.

"Prices for decent, but far from spectacular, businesses hit an all-time high", he said.

"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", he wrote. In summary, pretax income of $20B in 2017 was up about $950M from 2016. And it holds major investments in such companies as Coca-Cola Co., Apple and Wells Fargo & Co.

Net earnings per Class A equivalent share attributable to shareholders jumped to $19,790 from $3,823 previous year. Berkshire's "A" shares also became the first stock ever to reach a price of $300,000.

Buffett says using borrowed cash to buy stocks, or "buying on margin", is a no-no for individual investors.

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