Omaha-based legendary investor and Berkshire Hathaway (BRK)'s CEO Warren Buffett has taught his shareholders and the grand public another relevant lesson of value investing by not closing any substantial acquisition in 2017.
"My guess is they have scrubbed and scrubbed and found all the things that were done wrong", Buffett said.
"So, he says about once a decade you have these significant drawdowns and if you have leverage at that point in time, you can be forced out of your position at a really bad time". His holdings company, at any given moment, has millions invested in many companies, and, as of September 2017, is the biggest owner of of Bank of America and Wells Fargo shares.
"Apple has an extraordinary consumer franchise", Buffett told CNBC. Most grandparents expect you to come listen to their bullshit every weekend in person, and God forbid they figure out how to use e-mail because then you're going to be getting something in your inbox on Mondays that clearly suggests they don't remember you were just at their house the day before. He is advising caution.
Almost every company can make mistakes in the insurance business, including Buffett's own firm, he said.
Beside investments, Berkshire owns more than 90 different businesses in a variety of industries, including BNSF railroad, Geico insurance and several electric utilities and manufacturing firms. Indeed and from his standpoint, CEOs have taken on too much debt to finance expensive deals.
Buffett recalled the Ben Graham's famous saying: "In the short run, the market is a voting machine; in the long run, however, it becomes a weighing machine".
One goal is to reduce the growth of health care costs, now at 18 percent of the national economy, Buffett said.
During 10-year bet, hedge-fund managers made thousands of buy and sell decisions.
Consistent with his overall views on investing in what he perceives to be solid businesses, Buffett noted in the letter that he and his partner Charlie Munger approach stock trades in a similar way.
The ace investor chose to sell his bond investment to move money into shares of Berkshire, which he believes is a diversified solid business.