Lower tax rate fuels record profit for Buffett's Berkshire

Two Things We Learned From Billionaire Warren Buffett's Annual Shareholder Letter

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

In its annual report filed alongside Buffett's letter, Berkshire details exactly how it got to the $29 billion tax bill-related benefit.

Buffett said Berkshire would stick with a 'simple guideline: The less the prudence with which others conduct their affairs, the greater the prudence with which we must conduct our own'.

Warren Buffett's Berkshire Hathaway Inc on Saturday reported a record quarterly and annual profit, fueled by a big cut in the US corporate income tax rate championed by President Donald Trump.

Warren Buffett's Berkshire Hathaway Inc. was a big victor from the recent tax overhaul.

The billionaire and CEO of Berkshire Hathaway highlighted a $29 billion tax gain for his company, bemoaned a lack of good deals and reminded his readers that owning stocks through low-priced index funds was the best way to build wealth over time.

Despite sitting on more than $100 billion in cash, Warren Buffett says he was turned off by high asking prices for businesses he considered buying and that kept him from pulling the trigger on any major deals in 2017.

Berkshire's cash pile swelled to $116 billion from $109 billion in the third quarter.

"That. requirement proved a barrier to virtually all deals we reviewed in 2017, as prices for decent, but far from spectacular, businesses hit an all-time high", Buffett wrote.

Here's what to watch for in the latest letter from Buffett, 87, which is set for release online Saturday at 8 a.m.at Berkshire's home page http://www.berkshirehathaway.com/.

The iPhone maker, which wasn't even a Berkshire holding until the first quarter of 2016, has quickly grown to one of Berkshire's top stock holdings, if not its biggest.

Previous year was another good one for Berkshire shareholders, as the company's "A" shares rose almost 22%, vs. a gain of 19.4% for the S&P 500, a broad stock market index. Or lower the bar he has set to buy back company stock, paving the way for a share buyback announcement?

Known to fans as "the Oracle of Omaha", Buffett, 87, has suggested U.S. 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. Buffett challenged the asset manager to pick a group of hedge funds that it thought would beat an S&P 500 Index fund over 10 years.

Warren Buffett handily won the bet he entered against hedge funds in 2007.

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