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BlackRock Management Discusses Q3 2013 Results - Earnings Call Transcript

BlackRock (BLK) Q3 2013 Earnings Call October 16, 2013 8:30 AM ET

Executives

Matthew J. Mallow - Senior Managing Director and General Counsel

Gary S. Shedlin - Chief Financial Officer, Senior Managing Director, and Member of Global Executive Committee

Laurence Douglas Fink - Chairman, Chief Executive Officer and Chairman of Executive Committee

Robert S. Kapito - President, Director, Chairman of Operations Committee and Member of Executive Committee

Analysts

Matthew Kelley - Morgan Stanley, Research Division

Alex Kigel

Brennan Hawken - UBS Investment Bank, Research Division

Michael Carrier - BofA Merrill Lynch, Research Division

William R. Katz - Citigroup Inc, Research Division

Marc S. Irizarry - Goldman Sachs Group Inc., Research Division

Operator

Good morning. My name is Brent, and I will be your conference facilitator today. At this time, I would like to welcome everyone to the BlackRock, Inc. Third Quarter 2013 Earnings Teleconference. Our host for today's call will be Chairman and Chief Executive Officer, Laurence D. Fink; Chief Financial Officer, Gary Shedlin; and General Counsel, Matthew Mallow. [Operator Instructions] Thank you. Mr. Mallow, you may begin your conference.

Matthew J. Mallow

Thanks very much. Good morning, everyone. I'm Matt Mallow, the General Counsel of BlackRock. And before Larry and Gary make their remarks, let me point out, as I do in each of these calls, that during the course of this call, we may make a number of forward-looking statements. We call your attention to the fact that BlackRock's actual results may differ from these statements. And as you know, BlackRock has filed reports with the SEC, which list some of the factors that may cause the results of BlackRock to differ materially from what we say today. Additionally, BlackRock assumes no duty and does not undertake to update any forward-looking statements.

So with those formalities out of the way, let's begin the call.

Gary S. Shedlin

Thanks, Matt. Good morning, everyone. It's my pleasure to be here to present our third quarter results. Before I turn it over to Larry to offer his comments, I'll review our quarterly financial performance and business results. I'll be referencing selected pages from our earnings supplement, which has been posted on the BlackRock Investor Relations website, and discussing primarily as adjusted results.

BlackRock delivered third quarter EPS of $3.88, up 12% compared to 2012. Operating income was $978 million, also 12% higher. Excluding the impact of fund launch costs in the year ago quarter, operating income was up 9% on a year-over-year basis. Nonoperating results reflected a $23 million increase in the market value of our seed and co-investments, largely driven by private equity, real estate and distressed credit and mortgage investments. Recall that non-operating income in the second quarter of 2013 reflected a $39 million pretax gain relating to PennyMac's IPO.

Our GAAP tax rate for the quarter was impacted by a noncash revaluation of our deferred tax liabilities based on various U.K. and domestic state tax law changes, which we exclude from as adjusted results. The third quarter as adjusted tax rate was approximately 30%, consistent with a 31% annual run rate, which remains in appropriate intermediate term planning assumption based on what we know today.

In the third quarter, we saw approximately $25 billion of long-term net new flows, representing an annualized organic growth rate of 3%. We, again, demonstrated the consistency of our highly diversified multi-client platform, with retail and iShares driving our organic growth this quarter, more than offsetting the outflows we saw in our Institutional business.

We've raised approximately $124 billion of long-term net new business over the past 12 months, representing a 4% organic growth rate. Because 86% of these net flows were generated by our retail and iShares channels, our organic revenue growth exceeded asset growth as these channels have higher effective fee rates compared to the firm's overall fee rate, the same dynamic held true in the third quarter.

As you can see on Page 10 in the supplement, third quarter revenues were $2.5 billion, up $152 million or 7% from a year ago. Revenues were driven by base fees, excluding securities lending, which increases a function of both organic growth and market appreciation, offset by reduced securities lending revenue, reflecting ongoing softness in the hard-to-borrow or special collateral markets. Sequentially, total base fees, which includes securities lending, declined by 1%, driven by mix and a seasonal decline in securities lending activity.

As a function of the market volatility we've witnessed in the latter half of the second quarter, we entered the third quarter with lower assets on our management and our average AUM for the second quarter. During the second quarter, we were also impacted by iShares outflows and a negative beta-driven mix change in markets linked to some of our higher fee businesses. We experienced the opposite phenomenon during the third quarter with iShares inflows and positive beta, which will benefit our base fee run rate as we enter the final quarter of the year.

Performance fees for the quarter reflected solid results in our diversified single strategy hedge fund platform. Our performance fee eligible products belong to a broad range of asset classes and investment strategies and are normally not dependent on a single fund or market theme. While the fourth quarter is generally our seasonally highest quarter of the year for performance fees, recall that last year's fourth quarter included a large one-time fee related to the wind down of the U.S. government PPIP portfolio.

Our BlackRock Solutions franchise benefited from robust activity in the third quarter. Revenues were $156 million, up $28 million compared to 2012. Our Aladdin business, which represented 72% of BlackRock Solutions revenue in the quarter, grew 19% year-over-year, benefiting from trends favoring global investment platform consolidation, client seeking multi-asset risk solutions and a growing client base that is progressing through multiple bases of implementation.

Our FMA business had a very strong quarter, with year-over-year revenue growth of 29%, driven by advisory fees related to completed assignments and deliverables. While our FMA business continues to benefit from ongoing regulatory change, especially in Europe, the revenue profile of FMA will be lumpier than the Aladdin business on a quarter-to-quarter basis.

Revenue classified as other fell sequentially, primarily driven by our decreased ownership stake in PennyMac and lower transition management activity in the quarter. As we discussed on last quarter's call, we now hold an ownership stake of approximately 20% in PennyMac, down from 33% prior to PennyMac's IPO and our subsequent charitable contribution.

Turning to 12 -- Page 12, excuse me, of the supplement. Expenses rose $50 million year-over-year, driven primarily by increased marketing and promotion spend and revenue-related items, including compensation and direct fund expense. As we have previously indicated, the investment in our brand may vary quarter-to-quarter but over -- but our full year 2013 investment will be in line with 2012. Direct fund expense is largely linked to AUM levels, primarily in our index and iShares businesses.

Adjusting for fund launch costs in the third quarter of 2012, expenses rose 5% year-over-year compared to a 7% increase in revenue over the same period and resulted in an operating margin of 41.2%, a 50 basis point increase versus a year ago.

We remain committed to using our cash flow to optimize shareholder value with our first priority to invest in our business. We completed the acquisition of the Crédit Suisse ETF business in July and $16 billion in assets under management, extending BlackRock's footprint in Switzerland and bringing a broader range of opportunities to Swiss investors.

In addition, while not included in the third quarter, on October 4, we completed the previously announced acquisition of MGPA, a private equity real estate investment advisory company. This deal doubles the size of BlackRock's real estate advisory business, extends our reach to the Asia Pacific and EMEA regions and reinforces our commitment to offering investors access to markets worldwide. As previously noted, both transactions will not be material to our earnings per share.

Our capital management policy remains consistent. We repurchased approximately $250 million worth of shares in the third quarter, in line with the past 2 quarters. As we have previously stated, in the current environment, we would expect to maintain this level of repurchases for the remainder of the year.

Our solid financial results once again reflect the benefits of our diverse platform and strong partnership with our clients. We saw positive inflows across all major asset classes and regions, with retail and iShares driving growth in our client businesses. Similar to the second quarter, the breadth of BlackRock's platform was demonstrated by 10 funds across retail and iShares, each generating more than $1 billion inflows.

We spoke at our Investor Day about our excitement around the global retail growth opportunity. This quarter, we saw long-term flows of $8.3 billion in retail, driving 7% year-to-date annualized organic growth, a significant increase compared to the 3% organic growth we saw for the full year 2012. Results were driven by many of our key themes, including income, alternatives and outcome-oriented solutions.

U.S. retail saw long-term net inflows of $3.4 billion, with strong flows, unconstrained fixed income and alternatives. This represents a continuation of the momentum we've witnessed in the second quarter with both our strategic income opportunities and global Long/Short Credit Funds, again, delivering more than $1 billion in new flows.

In the face of sizable industry outflows this quarter, BlackRock's strong investment performance, proactive client conversations and breadth of product offerings once again drove net inflows and fixed income. On the equity side, we saw moderate outflows. Larry will spend some time on the positive investment performance trends of our recent hires later in his remarks, but we are still punching below our weight in equities and we have consistently recognized it will take time to see an inflection.

International retail saw a strong long-term net inflows of $4.9 billion, representing an 18% annualized organic growth rate. Flows were similarly driven by our global themes, including alternatives and outcome-based solutions. We experienced strong flows into equities, led by our top-performing European equity franchise, and experienced ongoing momentum in multi-asset as clients leveraged our solutions-oriented strategies, including global allocation, managed volatility and dynamic asset allocation.

Global iShares benefited from strong industry flows in September as risk appetite improved and once again demonstrated its leadership position. iShares remains the vehicle of choice for investors who want to quickly and efficiently express their views in the market. Following the macro-driven redemptions we experienced late in the second quarter, investors once again turned to iShares to increase risk allocations, driving significant inflows. In addition, we continue to see robust secondary market liquidity, which adds to the depth of markets for our clients.

For the quarter, iShares raised $20.2 billion of long-term net new business, equities led the way with approximately $21 billion of net inflows, while fixed income experienced modest redemptions. Year-to-date, iShares has accumulated nearly $45 billion of net flows, representing a 31% share of global industry flows for the quarter and 27% year-to-date.

Our Institutional business experienced $3.3 billion of net long-term outflows globally. However, we saw a continued momentum at Defined Contribution and in liquid alternatives. We saw passive outflows of $3.4 billion in the quarter, with equity outflows more than offsetting fixed income inflows, as market uncertainties slowed institutional fundings and re-risking strategies and caused some clients to tactically rebalance the weight from passive equity.

Active flows were roughly flat for the quarter, with strong inflows into fixed income and multi-asset, offset primarily by equity outflows. Fixed income inflows were driven by EMEA and APAC clients, while multi-asset inflows were paced by our LifePath August 8 franchise, which experienced $3 billion of net inflows, representing a 17% annualized organic growth rate. BlackRock now manages more than $80 billion of LifePath assets, which are a key driver growth for our Defined Contribution business.

Active equity outflows were driven by both scientific and fundamental strategies and were primarily performance-related. Part billing remains a prominent theme with institutional clients and we saw another strong quarter for illiquid alternatives. Year-to-date, we have now -- we secured nearly $5 billion of commitments, which will generate future net new business as those dollars are invested.

Overall, it was a very solid quarter, and with that, I'll turn it over to Larry.

Laurence Douglas Fink

Good morning, everyone. Thanks, Gary, and thanks for joining the call. The current market environment remains challenging. Uncertainty is high and fundamentals are taking a back seat to policy decisions. The narrative in Washington that's running the debt ceiling debate is reducing the confidence in investors and business leaders, leading to a short-term focus and risk adversion. Rather than investing in new equipment or job creation, CEOs are focused on increasing stock buybacks and dividends, which does little to drive long-term economic growth. Even with a deal to avoid a default, the damage has been done by the fact that we have had a debate, questioning whether the U.S. will pay its bills, and the impact will be a slowdown in economic growth.

In the face of this market uncertainty, BlackRock diverse platform continues to perform. We saw a $25 billion of net inflows this quarter, driven by positive flows in all major product categories and in all regions of the world. The flows we're seeing today and the stability of our platform are the result of investments we made in the business over the past few years. After acquiring BGI in 2009, BlackRock went through a period of integration that led many clients and consultants to take a wait-and-see approach. Could BlackRock marry active and passive investing that created more holistic solution for our clients?

We addressed these challenges, emerging 2 organizations, performance issues and certain products and creating a single cultural identity. During this time, we never lost our focus of -- on identifying and focusing and attending to the needs of our clients. We rededicated ourselves to: One, the pursuit of alpha generation, leveraging our risk management and analytic capabilities to better advise clients and create solutions; two, we built our brand; and three, strategically position BlackRock to address key investment themes.

The combination of strong performance and risk management focus, continued investment in our brand, a strategic focus on strengthening of client relationships positions BlackRock well beyond 2014. Top quartile investment performance is critical for BlackRock to be the world's premier investment manager. Several years ago, we went through a restructuring of our active fixed income business. What was a weakness coming out of the financial crisis is now a strength, and we are seeing the payoffs. Our strong performance track record across our fixed income book once again drove positive flows in a challenging market for the asset class.

We saw more than $7 billion in active fixed income inflows this quarter despite outflows in the industry. Our 1-, our 3- and importantly, our 4- and 3-quarter year performance is meaningful in excess of our key competitors in total return, unconstrained and high-yield and low-duration products we are all well positioned for a continuing rotation within fixed income. BlackRock's early investment in the unconstrained fixed income space positions us to capitalize on what I believe will be one of the defining themes of the foreseeable future, as investors reassess risk in their fixed income portfolios and look to limit the impact of duration in a rising rate environment.

Our unconstrained bond strategy, the Strategic Income Opportunity fund, had its third straight quarter with more than $1 billion in net inflows, driving growth in retail. On the Institutional side, we are having active conversations with our clients about the diversification benefits of our unconstrained allocation, and we expect to see more momentum coming from Institutional on that front.

Moving to equity performance, as we've discussed in the past, one critical area for investments for BlackRock has been our U.S. fundamental equity franchise. Much of the confidence I have been making these changes in our equity platform stemmed from the success we had in the rebuilding of our fixed income side.

BlackRock did see $5 billion of outflows this quarter on our active equity business. While we're not satisfied with that outflow, we are pleased with the investment performance we're seeing in some of our managers. And as Gary suggested, that outflow really came more from the international side and was more idiosyncratic than outflows that were stemming from portfolio manager turnover.

Our basic value fund is more than 450 basis points above its benchmark and is in the fourth percentile. Our large cap core product has risen from the 76th percentile to the 35th percentile and these funds -- since these funds came under new management, we have seen more than $2 billion in new institutional mandates in our fundamental large cap growth portfolios through the third quarter and had additional $1.8 billion mandate, which funded earlier this month. Our commitment to rebuilding our active equity business is just as strong as a commitment we made to rebuild our active fixed income business, and I expect to see the same positive results and flows over time.

Just as BlackRock needed to refocus in our investment performance, we also needed to build our brand to drive growth in our retail businesses, and the investments we made in the BlackRock and iShares brands are now delivering those results. As we've grown and diversified the firm over time, communicating a clear message has become a critical component of our client interaction. Over the past year, we've been reaching out aggressively to clients to educate them on the risk of fixed income and the need to prepare more effectively for retirement. And we're linking those messages directly to investment strategies and individual product offerings.

we're seeing the benefit of those efforts in increased traffic to our websites, much higher brand recognition, better client dialogue, more pulls from clients and improved flows in products targeted through our marketing and communication efforts. Retail is a key focus area for BlackRock's marketing effort. As Gary mentioned earlier, our global retail business has grown organically at a 7% annualized rate this year, more than double our 3% growth in 2012. These results are an outcome of our continued focus on driving investment performance across the entire platform and our investment in the BlackRock brand.

International retail is a significant growth driver, raising nearly $5 billion in new flows, the most in the quarters since 2009. The success we're seeing in international reflects our strategic plan to diversify this platform. Our active equity franchise drove nearly $2 billion in net flows, led by European equities, and the nearly $3 billion inflows we saw in active fixed income, multi-asset and alternatives, demonstrated the benefits of deeper relationships we've been building across our global client base.

Outcome-oriented investing is another driver for retail. This is a high-growth market where BlackRock has a unique ability to package active and passive strategies, backed by BlackRock Solutions risk management and analytical capabilities. No other firm has that ability to put those 3 components together on a outcome-oriented investing platform. We aligned through our model portfolio initiative last year and now have more than 8,000 live subscriptions. We've seen strong client appetite for our packaged solutions, with nearly $2.7 billion in combined flows this quarter across our 2 flagship strategies, our Multi-Asset Income and our Global Allocation product.

In addition to driving growth in retail, we continue to be focused on positioning for the long-term secular trends in the ETF market. Clients use iShares as an efficient and transparent portfolio construction tool to move quickly in and out of investment exposures and increasingly as buy-and-hold vehicles to build core exposures. We see liquidity-oriented investors turn to iShares as a preferred vehicle when they want to increase market exposures as they did in mid-September and when they want to reduce exposures as they did at the end of the second quarter. Given the volatility on the liquid side of the product set and the seasonal trends we've seen over time, we tend to look at growth in iShares in a rolling 12-month basis. In the last 12 months, iShares has seen more than $80 billion of inflows, driving organic growth of 11%, consistent with our long-term expectations.

As we further penetrate the buy-and-hold segment, both through the Core Series and our strategic partnership with Fidelity, we expect more stable quarterly flow patterns. The iShares Core Series has delivered positive flows in every quarter since its launch date, including more than $9 billion of net flows year-to-date and more than $13 billion of flows since inception, representing organic growth of 20%. And on the Fidelity platform, we've seen iShares grow at an annualized organic rate of 13%, also led by our Core Series.

International expansion will also serve to increase diversification. iShares brought in more than $5 billion of flows in Europe this quarter, and we increased our presence in the market following the closure of Crédit Suisse ETF platform acquisition in July. BlackRock continues to invest in the ETFs space to drive adoption and the new usage by broadening the client base using ETFs and launching innovative products. In the quarter, we saw our first bank client purchase of iSharesBonds and we launched near a short-duration bond fund that is well positioned for the current fixed income environment.

Let's talk about performance, investing in our brand and how our investments in key themes position BlackRock to deliver value. The key to growth is translated in that progress into strengthening our relationships with our clients. The depth and richness of conversations that BlackRock is having with clients have progressed substantially in the last couple of years. I've seen that in my own discussions with clients, and I hear the same from my colleagues across the firm worldwide.

The BlackRock Investment Institute or BII is an example of all that we are building coming together. BII sits at the center of our 1,600 portfolio managers, analysts and researchers worldwide. The Institute was created with a single goal in mind, to harness the best insight from our global investment team and leverage that insight through a robust dialogue across the entire BlackRock platform to drive performance. And I do believe our performance results recently speak loudly about the value of this Institute.

With the creation of BII, not only our investment team is better equipped to produce alpha, but BlackRock is also positioned to identify market themes and share our investors' thoughts and ideas with our clients. As an example, we hosted a call earlier this month on the fiscal challenges in Washington, which was led by several or top strategists and portfolio managers and was attended by more than 1,000 clients.

Additionally, in the last few weeks, we've had strong attendance and positive reactions at client events in Asia, in Brazil and in Washington. Our reputation for problem solving continues to build as more and more people turn to us for insight and counsel. They appreciate the perspective that BlackRock and our platform affords them and helping them solve these challenging financial problems.

What BlackRock brings to the table is resonating with clients. Our products are more -- are on more retail platforms and buy lists than ever before, and we're seeing that positioning to drive growth. In bringing together our retail and iShares sales force, we're having more holistic conversations with FAs and RIAs, and you're seeing that manifest in flows from these businesses.

I've met with a number institutional clients over the last few months, pension funds, consultants, central banks, sovereign well funds, and the reception is better than I've ever seen. The identity we're building and the clarity of message that we're delivering is differentiating BlackRock's value proposition.

As the uncertainty in Washington impacted institutional client asset allocation decisions in late September, we saw passive equity outflows for the first time since 2008, driven by profit taken in equities, rebalancing and a reduction in risk. However, we benefited on the other side of that reallocation with nearly $7 billion of net flows into fixed income, largely driven by international financial institutions, turning to BlackRock for domestic credit exposure and more than $4 billion in new money from official institutions across active and passive strategies.

We also saw a strong BlackRock Solutions results. BRS continues to be a key differentiator for us in client-seeking risk management solutions. Our financial market advisory business is benefiting from the ongoing regulatory change, particularly in Europe, and we continue to have robust dialogues regarding the benefits of our Aladdin risk management platform. We are close to signing one of our largest ever Aladdin assignments.

Before I wrap up, I'd like to spend a minute addressing the regulatory process. Last month, the Treasury's Office of Financial Research released its study for the FSOC on asset managers. As requested, we will submit a letter to the SEC detailing our views on the report by November 1. We think this study reinforced some of the important fundamental points in which we wholeheartedly agree. That report stated first, asset managers or agents, they're not principals. Asset managers act as fiduciaries on behalf of our clients. Second, asset managers are different from banks and insurance companies. Asset managers don't take deposits. Asset managers are not wholesale funded and asset managers don't benefit from any government guarantees and we aren't levered in any material way.

The study also raises a number of potential risks related to specific investment products or investment practices. We agree with some of those additional regulations, and we agree that it is warrant to look at this, as we have advocated reforms to address many of this risks. However, since these risks are unrelated to the size of asset managers, we believe regulation targeted at specific products and practices will be more effective than company-level regulation or just a few firms.

Looking ahead, BlackRock will continue to see the benefits of our investments we've made in our performance, in our brand, in our strategy and our relationships with our clients. The positive impact that these investments have delivered make me more confident that we're on the right path. As Gary noted, investing in our business where we see opportunities for our organic growth is a key objective, and I see substantial growth opportunity for BlackRock on the horizon. When I talk to clients, I see them looking at BlackRock differently they have in the past. They see us as a partner, as a firm that can deliver solutions unlike anyone else in the industry.

Our ability to combine active and passive solutions on a single platform, backed by risk management and analytical capabilities or our BlackRock Solutions business, position us to take our client dialogue to a higher level. And this is a higher level, both in institutional and now in the retail side. We're seeing those conversations drive an acceleration in our business and I expect to see that acceleration continue.

Finally, we'd like to thank all of our employees for the hard work and contribution to BlackRock. We look forward to the continuing to partner with our clients around the world to deliver them all that BlackRock has to offer.

With that, I'll open it up for questions.

Earnings Call Part 2:

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  • Best Dividend Stocks This Month
    Business
    Simply Wall St.

    Best Dividend Stocks This Month

    Valero Energy is one of the top dividend stocks I think are worth considering today. A large part of investment returns can be generated by dividend-paying stock given their role in compounding returns over time. If you’re a long term investor, these high-performing top dividend stocks can boost your monthly portfolio income.

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    Business
    Motley Fool

    In Your 60s? 3 Stocks You Should Consider Buying

    OK, those of us in our 60s know this already, but I'm going to say it anyway: We are not old. The Pew Research Center conducted a study of aging and found that the definition of old age depends on who you ask. Well, I admit that how we feel about aging might not matter much in investing, but what does matter is longevity.

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    Politics
    Time

    Trump Said to Weigh 'Red Flag' Orders to Take Guns Away Quickly

    The White House is considering the idea of using restraining orders to take firearms away from people considered dangerous as part of its response to last week’s massacre at a Florida high school, two people familiar with the matter said. Under extreme risk protection orders, which are also known as red flag laws or gun violence restraining orders, firearms can be confiscated from people found to be at risk. The White House is studying an Indiana version of the law, and is considering other measures as well, according to the people, who requested anonymity to discuss policy deliberations.

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    Business
    Motley Fool

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    Vehicle sales may be plateauing in the U.S. market, but Ford Motor Co. (NYSE: F) and General Motors (NYSE: GM) both have a secret weapon to help them through whatever comes next: their financial arms. Ford Credit and General Motors Financial (GMF) have grown in importance for Detroit's two largest automakers, but investors often overlook them. Let's review the role these financial divisions play in their companies, consider what could go wrong for them, and dig into a recent study that will help us gauge where they might be headed.

  • Adam Schiff's Memo Has Been Released. Here's What It Says
    Politics
    Time

    Adam Schiff's Memo Has Been Released. Here's What It Says

    Democrats on the the House Intelligence Committee on Saturday released a memo prepared as a counter to the one overseen by the committee’s chairman Devin Nunes that was publicized earlier this month. Overseen by Rep. Adam Schiff, the ranking Democrat on the committee, the memo from the Democrats attempts to contextualize the Nunes memo, which argued that the FBI displayed bias in obtaining a FISA warrant for former Trump campaign adviser Carter Page. That memo alleges that the FBI failed to disclose Christopher Steele, who compiled the notorious Steele dossier, was working for Fusion GPS or the firm’s founder Glenn Simpson, and that Deputy FBI Director Andrew McCabe — who is stepping down —said the FBI would not have sought a warrant without the dossier.

  • 3 Cheap Dividend Stocks That Helped Warren Buffett Earn $3.7 Billion in Dividends in 2017
    Business
    Insider Monkey

    3 Cheap Dividend Stocks That Helped Warren Buffett Earn $3.7 Billion in Dividends in 2017

    Warren Buffett, the revered billionaire investor and Chairman and CEO of $500 billion holding company Berkshire Hathaway, just released his annual shareholder letter in which he discussed a number of intriguing topics. Perhaps the most noteworthy one was the revelation that Republican tax cuts contributed $29 billion to Berkshire Hathaway Inc. (NYSE:BRK.A)‘s bottom-line last year. That clearly proved irksome to Buffett, who supported Hillary Clinton during the 2016 Presidential Elections and was not fond of the idea of tax cuts for the wealthy. As Buffett made clear in the letter, the windfall “did not come from anything we accomplished at Berkshire.” The letter also revealed that Berkshire earned

  • 8 memorable quotes from Warren Buffett's newest shareholder letter
    Finance
    Yahoo Finance

    8 memorable quotes from Warren Buffett's newest shareholder letter

    In his annual letter to Berkshire Hathaway (BRK-A, BRK-B) shareholders, legendary investor Warren Buffett muses on the M&A environment, his aversion to leverage, opportunities to buy during downturns, and his disregard for fees charged by active managers.

  • Warren Buffett: Investors handicapped by debt miss 'extraordinary opportunities'
    Business
    Yahoo Finance

    Warren Buffett: Investors handicapped by debt miss 'extraordinary opportunities'

    It’s impossible to accurately know when the next market decline will be, according to legendary investor Warren Buffett. It’s important to remember that even Buffett’s Berkshire Hathaway (BRK-A, BRK-B) hasn’t been immune to significant swings in its stock price either. “This table offers the strongest argument I can muster against ever using borrowed money to own stocks.