Warren Buffett is the CEO of Berkshire Hathaway an investment firm that Buffett owns the controlling interest in. Buffett has done so well with his investments decisions at Berkshire Hathaway he is currently the second wealthiest person in the country. Today we will look at Buffett annual shareholder letter for the fiscal year 2017.
Berkshire Hathaway Annual Letter To Stockholders
Probably the most unusual profit made by the firm in 2017 as a result of changes in tax codes for the firm. This resulted in a $29 billion gain for the company. This was due to when President Trump rewrote the tax code and when it was implemented for the 2017 tax year.
New Rules In Tax Laws will Cause Severely Distorted Berkshire’s Net Income Figures
To display to shareholders the effect on distorted figures Buffett uses his example of their stock holdings in Kraft Heinz. Under the rules of the recently implemented tax laws, all unrealized investment gains and losses in stock must be included in all net income figures. As Buffett stated in his letter this new change will produce some highly unusual swings in figures reported on their bottom-line. In the case of Kraft-Heinz stock holdings, this could cause a swing of $10 billion dollars on the Brookshire’s bottom line quarterly numbers. As Buffett states in his letter this new changes in the way the numbers have to be reported will make Berkshire’s bottom line numbers as Buffett states useless”.
The Four Building Blocks that Add Valve To Berkshire
As stated in the letter to shareholders Hillshire still based their valve of stock acquisitions on Buffett’s four building blocks. The four-building Hillshire uses are as usual the same. The first building block is sizable stand-alone acquisitions. The second is add-on acquisitions that work with business Hillshire already owns. The third is internal sales growth in Hillshire’s many different businesses. The fourth is the investment profits made from Hillshire’s high portfolio of stocks and bonds.