With $116 billion cash, Warren Buffett says Berkshire needs 'huge acquisitions'

With $116 billion cash, Warren Buffett says Berkshire needs 'huge acquisitions'

Warren Buffett said that the Republican tax law passed past year made his company billions of dollars. The compounded annual return over the last 53 years is 19.1%.

The new law lowered the tax rate paid by USA companies from 35 percent to 21 percent, allowing many to undertake major new outlays and others to book significant fiscal gains.

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

Berkshire Hathaway, the business headed up by legendary investor Warren Buffett, today reported a record annual profit after Donald Trump's tax changes boosted its earnings by more than $29bn (£21bn).

He also spent much of the letter explaining Berkshire's results for 2017, which were aided by a huge gain on the recent United States tax overhaul.

Warren Buffett got right to the point Saturday in his folksy and blunt annual letter to investors.

The biggest thing missing from the deals Buffett eyed was one of the key qualities he looks for when buying a company: "a sensible purchase price".

For all of 2017, Berkshire's net income rose 87 percent to $44.94 billion.

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

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

"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. The billionaire investor has long advocated for higher taxes on the wealthy, while the new law reduced the top income-tax rate. Real-time viewership in 2017 was about 3.1 million, a gain of 72 percent over the previous year, Buffett said.

Turning to investments, Berkshire's Apple holding was up to $28.2B at year-end, second only to Wells Fargo at $29.3B.

Net earnings per Class A equivalent share attributable to shareholders jumped to $19,790 from $3,823 a year ago.

A major reason for that decline was a $2.22 billion loss from insurance underwriting, Berkshire's first full-year deficit since 2002, hurt by Hurricanes Harvey, Irma and Maria and wildfires in California. 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.

Buffett urged investors to stick with stocks even though they can be riskier in the short-term.