Buffett praises Bank of America’s buybacks

He said Berkshire’s Apple stake, now at about 133 million shares, was worth about $18 billion based on Friday’s closing price and amounted to Berkshire’s second-biggest holding. He also owned up to the fact that Apple (aapl) is one of the legendary investor’s own stock picks, and not one chosen by his lieutenants. It initially appeared that Unilever might be open to negotiating a deal, Buffett said, but once a rough offer was delivered it became clear the owner of Lipton and Hellman’s wasn’t interested. “Apple strikes me as having quite a sticky product”. He reiterated his optimism about the future of America, rebuffed criticisms of share buybacks and declared that he has not committed to holding any of Berkshire’s stock investments forever.

“As the subject of repurchases has come to a boil, some people have come close to calling them un-American – characterising them as corporate misdeeds that divert funds needed for productive endeavours”, Mr Buffett said. Buffett bought his most recent stake between January 1 and January 31-the day Apple reported that its sales rose $2.5 billion, or 3%, in the last three months of 2016, which was higher than expected. Since 1965, Berkshire has returned a whopping 19 percent annual gain, a function of what Buffett said was a free market that created American prosperity.

Buffett also said he’s investing heavily in Apple, believing that once consumers begin using the company’s products they aren’t likely to stop.

Yet Buffett said most stock investors are better off with low-priced index funds than paying higher fees to managers who often underperform.

He continued his attack by releasing documents of his 10-year performance bet between a pick of his own – a low-priced S&P 500 index fund managed by Vanguard – and asset manager Protégé Partners that chose to bet on the average performance of five hedge funds. Apple is now Berkshire’s second-largest holding after only Coca-Cola, and the company’s stake in Apple is worth nearly $18 billion.

Buffett then described how he “atoned” for that mistake by buying a majority stake in utility MidAmerican Energy for all cash in 2000. “There is a vast untapped market out there”, he said. “There, price would always factor into a buy-or-pass decision”.

Among other comments on Berkshire Hathaway’s insurance operations, Mr. Buffett said Berkshire Hathaway Specialty Insurance Co., which was launched in 2013 and is headed by Peter Eastwood, has beaten expectations.

When it comes to picking his investments, Warren Buffett has a reputation for sticking with what he knows. “If that level is reached, we will instead attempt to blend a desire to make meaningful purchases at a value-creating price with a related goal of not over-influencing the market”, Buffett wrote.

The recent movement in the stock suggests otherwise. So far this year, Apple stock has risen 18%. Based on his latest estimate of book value, the buyback threshold stands at roughly $207,000 per Class A share.

“If they can get to the Sweet 16, if there’s only one of them, whoever it is, he or she gets a million dollars a year for the rest of their life”, Warren Buffett said Monday on CNBC.