Warren Buffett criticises Wall Street as Apple investment pays off

The world’s most famous investor, Warren Buffett, has used his annual letter to shareholders to pour scorn on professional stock pickers, claiming clients have wasted more than $US100 billion in fees over the past decade to pay for poor financial results. So Buffett said most investors are better off not trying. Investors who avoid high and unnecessary costs and simply sit for an extended period with a collection of large, conservatively financed American businesses will nearly certainly do well. Buffett also called Vanguard Group founder Jack Bogle “a hero” for his early efforts to popularize index funds.

Buffett writes that while there are some skilled managers who could beat the S&P 500 over long periods of time, they are few and far between. Buffett’s regard for the iPhone comes even though he admitted he himself didn’t own one. Buffett was initially drawn to Apple by one of his investing lieutenants, either Todd Combs or Ted Weschler, who built a 10 million share position by the first quarter of 2016.

The Oracle of Omaha blasted hedge funds, arguing they’ve been a disservice to those who spend money on them. Aggregate underwriting profits increased this past year to $2.1 billion from $1.8 billion. Then in 2015, Heinz struck a deal to buy Kraft Foods for about $40 billion in cash and stock. Nonetheless, he said it was extremely hard to time the market and that stocks could plunge tomorrow.

And it can be extremely hard for investors to determine whether a money manager has the rare ability to outperform the stock market.

“We don’t dispute the data that has led Mr. Buffett and others to form their views”, Armour said in a statement. “Simply put, not all investment managers are average”.

Overall, Buffett told the television network, Berkshire has spent about $20 billion on stocks since just before the USA election in November, adding that he thinks the US market is cheap with interest rates at current levels.

Buffet will hold his annual shareholders meeting at the Century Link Center May 6. Buffett said Jain has created “tens of billions of dollars of value” since joining Berkshire in 1986.

The purchase gives Berkshire Hathaway about 2.5% of the outstanding Apple shares.

“Think airlines. Here a durable competitive advantage has proven elusive ever since the days of the Wright Brothers”, Buffett wrote.

Billionaire investor Warren Buffett, chairman and CEO of Berkshire Hathaway, said that he more than doubled his holdings in Apple between the start of 2017 and the tech company’s most recent earnings report.