Buffett voices optimism on U.S. businesses

“Both large and small investors should stick with low-priced index funds”, he says.

Buffett, in the annual letter, sharply criticizes hedge funds for charging high fees and urges both small and large investors to stick with low-priced index funds.

There’s still a few months to go, but Buffett also declares victory in his crisis-era bet that the S&P 500 would outperform a portfolio of funds of hedge funds over a 10-year period.

After nine years, Buffett’s index fund is up by 85.4 per cent, while the selection of the five funds is up 22 per cent.

“The degree to which people’s lives center around the product his huge”, Buffett said of the Apple iPhone, even as he revealed that he didn’t have one himself.

The Oracle of Omaha blasted hedge funds, arguing they’ve been a disservice to those who spend money on them.

Warren Buffett released his letter to Berkshire Hathaway share holders with a positive message that investment gains will continue to be substantial.

Omaha, Nebraska-based Berkshire Hathaway’s operating earnings for the quarter declined to $4.38 billion from $4.67 billion in the a year ago period.

These included businesses such as the BNSF railroad and Geico auto insurance that posted weaker results last quarter.

“And he predicts American business is virtually certain to be worth far ore in the years ahead”. CEO Elon Musk said two people approached the company about sending them on a weeklong flight just beyond the moon.

But past year he began buying up shares of the smartphone-producer, and greatly increased his stake in the last quarter. Berkshire previously bought shares in Q3 and Q4, when Apple was hit by fears of slowing smartphone sales. For all of 2016, net profit came in at $24.1 billion, slightly lower than the prior year. Berkshire’s operating companies also performed well in an improving economy, with operating earnings increasing to $17.5 billion in 2016 from $17.3 billion in 2015. The move increased Berkshires shares outstanding by more than 20 percent for a reinsurer that stumbled initially after the purchase.

Buffett, 86, used his investment savvy to build Berkshire into a powerhouse conglomerate and become the world’s second-richest person.

Berkshire reported a US$9.3 billion airline stake at the end of December 31, according to Securities and Exchange Commission filings, with investments topping US$2.1 billion in each of American Airlines, Delta Air Lines, Southwest Airlines and United Continental Holdings.

“If there were ever to be another Ajit and you could swap me for him, don’t hesitate”, Buffett wrote.

Buffett’s 2011 discussion of the three different types of investments, and why Buffett prefers to invest in assets like businesses and real estate instead of things like gold and bonds.