Warren Buffet Shareholder’s Address

In his annual letter to shareholders, Buffett states that Berkshire Hathaway Inc.’s gain in net worth in 2017 was $65.3 billion. Gain didn’t come from Berkshire exclusively, however. $36 billion came from Berkshire’s operations, the remaining $29 billion was given to the company when Congress rewrote the U.S. Tax Code. Berkshire has owned $170 billion of marketable stocks. Buffett states in his written address that his firm will continue the act of publishing financial reports late Friday. Buffett always emphasizes a reasonable purchase price when looking at stocks of any kind.

HomeServices, is Berkshire Hathaway’s growing real estate brokerage operation. Berkshire gained this business in 2000 when MidAmerican Energy interest was acquired and renamed Berkshire Hathaway Energy. HomeServices grew in 2017. Buffett managed to add 12,300 agents, raising the total to 40,950, making Buffett’s company the second largest brokerage operation in the country. Berkshire Hathaway’s main value in line with their mission is to represent both buyer and seller, making the dollar value of the transaction counted twice. Berkshire Hathaway has an insurance division as well, which started by purchasing a company named National Indemnity.

He also remarks on a prior purchase of a sister company at 8.6 million in early 1967. With this purchase in the past, Berkshire reached $6.7 million of tangible net worth. He reminds his stakeholders that Berkshire is not run like it needs to rely on the kindness of strangers. Float is an investment term that stands for “Firm’s Available Balance.” Float is double-counted money. Buffett states that float will increase slowly for a few years, with Berkshire experiencing a moderate decline. The downside of float is that it comes with risk. Buffett also didn’t comment on the state of the U.S. economy in his address, and his letter was designed to reassure stockholders.

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