Investors wasted billions on Wall Street money managers – Warren Buffett

Berkshire’s latest purchase also didn’t coincide with a drop in Apple’s stock, which has shot up since 2017 began.

“When trillions of dollars are managed by Wall Streeters charging high fees, it will usually be the managers who reap outsized profits, not the clients”, he said.

He also pushed back against the assertion that share buybacks are “un-American” and offered a lesson in when they make sense.

Legendary investor Warren Buffett told CNBC on Monday that his Berkshire Hathaway (BRK.A) group almost doubled its stake in Apple (AAPL) to 133 million shares worth around $17 billion. 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. The lack of any additional details on Berkshire’s plan to eventually replace the 86-year-old Buffett as chairman and CEO suggests little has changed in the company’s plan to split Buffett’s job into three parts: chief executive officer, chairman and several investment managers. He bets Apple since the company is in a stronger position. Berkshire has a 26.7% stake in Kraft Heinz, which is technically the company’s largest common stock holding.

“That simply isn’t the case: both American corporations and private investors are today awash in funds looking to be sensibly deployed”. Berkshire gained $27.5 billion in net worth during 2016, Buffett said.

“He talks about something called the ‘scuttlebutt method, ‘ which made a big impression on me at the time, and I used it a lot”, Buffett said.

And it can be extremely hard for investors to determine whether a money manager has the rare ability to outperform the stock market. “It’s at a price different than I would buy it now”.

“Charlie and I love our railroad, which was one of our best purchases”, Buffett said, referring to longtime Berkshire vice-chairman Charlie Munger. And Berkshire bought a new stake in satellite radio firm Sirius XM (SIRI) during the fourth quarter. And despite being famous for his buy-and-hold investment style, Buffett and his team did quite a bit of buying and selling stocks in 2016.

But he expressed concern that “too many” public companies are deviating from generally accepted accounting principles (GAAP) to present better earnings numbers.

The recent movement in the stock suggests otherwise. “It was, nevertheless, a awful mistake on my part to issue 272,200 shares of Berkshire in buying General Re, an act that increased our outstanding shares by a whopping 21.8%”.