On Saturday, February 25th, Berkshire Hathaway released its much-anticipated 2016 letter to shareholders in which Warren Buffett presents his company’s results for the year and shares his inimitable insights and wisdom. Here are some highlights (Part I was posted yesterday):
- “Starting from scratch, America has amassed wealth totaling $90 trillion.”
- Meg McConnell of the New York Fed: “We spend a lot of time looking for systematic risk; in truth, however, it tends to find us.”
- Berkshire has $86 billion in cash on hand—perhaps the most ever.
- “We have made no commitment that Berkshire will hold any of its marketable securities forever.”
- With active management, Buffett says, come high fees. “When trillions of dollars are managed by Wall Streeters charging high fees, it will usually be the managers who reap outsized profits.”
- “Both large and small investors should stick with low-cost index funds.”
- Pension funds are “hit with a double whammy: poor investment performance and huge fees.”
- “Our expectation is that investment gains will continue to be substantial—though totally random as to timing.”
