Thousands of people fill arena to hear from Warren Buffett

"You have to be very careful what you incentivize", Buffett said at the annual shareholder meeting of his Berkshire Hathaway conglomerate, which owns about 10% of Wells Fargo shares, worth about $26 billion. He offered thoughts and insights on everything from Republicans voting to repeal Obamacare, to the Wells Fargo scandal, to how artificial intelligence and technology might reshape America. Obamacare pays for health care for Americans in part by taxing wealthier people.

And Buffett has apparently done the math here.

In other businesses, the BNSF railroad saw profit rise 7 percent to $838 million, helped by higher revenue from fuel surcharges and increased shipments of consumer products. Buffett was previously on the board of the Washington Post Co., and the stock was one of his best investments.

Berkshire's largest unit, railroad Burlington Northern Santa Fe, added $838 million to net income, 6.9 percent more than in the same period of 2016, according to a regulatory filing. At that time, healthcare was 5 percent of GDP and now it's 17 percent of GDP.

"I'm sure that they give money to people I wouldn't vote for, but that is the reality of doing business", he said. Meanwhile, medical costs have exploded.

"Medical costs are the tapeworm of American economic competitiveness", said Mr. Buffett.

He argued against the tax system crippling competitiveness "or anything of the sort". Airlines, on the other hand, are in a highly competitive environment (although it's gotten better), and the fundamentals of the business aren't as attractive.

Now, Buffett likes to keep at least $20 billion in cash on the balance sheet at all times at an absolute minimum, but that still leaves massive potential for acquisitions and/or stock investments.

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"If you even have a billion dollar fund and get two per cent of it, for bad performance, that's $20 million", Buffett said.

"It is true that we own some stocks that I have no intention of selling for as far as the eye can see (and we're talking 20/20 vision)", Buffett wrote in the letter.

This "incentivized the wrong type of behavior", and former Chief Executive John Stumpf, who lost his job over the scandal, was too slow to fix the problem, Buffett said.

Berkshire plans to name one of its existing managers CEO after Buffett is gone, and the decentralized structure of the company allows Berkshire's subsidiaries to largely run themselves.

"Autonomous vehicles widespread would hurt us". "I'm looking forward to hearing him as much as everybody else".

Another Democratic senator who has been a vocal critic of the new bill said it would just make the rich wealthier while taking away basic healthcare from those in need.

Munger said it was a "very good sign" that Buffett jumped into Apple.

  • Rita Burton