With $116 billion cash, Buffett says Berkshire needs 'huge acquisitions'

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Buffett said it would not be hard to "shave" off 3 or 4 percentage points, contrasting the situation to 1960, when he said healthcare costs accounted for just 5 per cent of GDP, or $170 per person.

Kraft Heinz also got a big positive impact from the reduction of corporate income tax rates, and Berkshire listed that savings separately from its other positive impacts from tax reform. "The remaining $29 billion was delivered to us in December when Congress rewrote the U.S. Tax Code".

The venture is initially being guided by three senior executives from the companies: Berkshire's Todd Combs; Marvelle Sullivan Berchtold, a managing director at JPMorgan who previously worked at drugmaker Novartis; and Beth Galetti, a senior vice president for human resources at Amazon.

Buffett said that in starting the venture, "we have the ideal partnership" with JPMorgan CEO Jamie Dimon and Amazon CEO Jeff Bezos.

Known as the "Oracle of Omaha" - after his birthplace in the Midwestern state of Nebraska - Buffett is one of the world's most successful investors and one of its richest men.

For all of 2017, Berkshire's net income rose 87% to $44.94 billion. And he cautioned that it will be a slow process before showing results. "I'm hopeful, but don't expect any miracles". "If it was easy, it would have been done".

He shared the data that revealed Berkshire Hathaway's stock declined by a range of 37 percent to 59 percent multiple times over the last five decades. He said the investment was made by one of his deputy stock pickers, and that he didn't know the reasons they made it.

Speaking on CNBC television, Buffett said "we can't afford to make a mistake" in finding the right CEO to help combat spiraling healthcare costs that now account for close to 18 per cent of USA gross domestic product, or $10,000 per person.

Buffett also refrained from calling stocks overvalued, as he's done in past yearly updates, but he did say acquiring other companies had gotten overly expensive.

The year also saw the company's war chest swell to $116 billion in cash and US Treasury bills, financial manna that Buffett wants to use to make significant new acquisitions.

One goal is to reduce the growth of health care costs, now at 18 percent of the national economy, Buffett said.

Among Berkshire Hathaway's top holdings, Apple is valued at $28.2 billion on 166.71 million shares, which puts it just behind Wells Fargo at $29.3 billion on 482.54 million shares.

"Berkshire's gain in net worth during 2017 was $65.3 billion, which increased the per-share book value of both our Class A and Class B stock by 23 percent", Buffett wrote in a letter to Berkshire Hathaway shareholders that accompanied the company's annual report.

He said the damage to Berkshire and other insurers could have been "far worse: Had Hurricane Irma followed a path through Florida only a bit to the east, insured losses might have well been an additional $100 billion".

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