Making money: what the experts think

Sage words

What is Donald Trump good for? About $29bn in extra cash if you’re Warren Buffett, said The Sunday Times. In his annual letter to shareholders, the Sage of Omaha observed that the US president’s policy of slashing US corporation tax had given a massive boost to his company Berkshire Hathaway’s profits. Just $36bn of last year’s total $65.3bn gain came from actual operations, he wrote. “The remaining $29bn was delivered to us in December when Congress rewrote the US tax code.” Buffett went on to say that “all-time high” prices had put him off major acquisitions, reported Citywire. Indeed, thanks to “the ample availability of extraordinarily cheap debt”, price seemed “almost irrelevant to an army of optimistic purchasers”, egged on by analysts and investment banks. Buffett ended with a warning. “The less the prudence with which others conduct their affairs, the greater the prudence with which we must conduct our own.”

Tech talk

The ongoing strength of big tech stocks continued to reward investors – including the world’s largest sovereign wealth fund – in a big way last year, said Richard Milne in the FT. Norway’s $1.1trn oil fund “posted one of its biggest-ever returns”, delivering 13.7%, largely thanks to strong stock markets and the tech sector in particular. Apple, Tencent and Microsoft were the fund’s top three performing stocks. Its worst performers were General Electric, Exxonmobil and the Israeli drug maker Teva.

Beyond the Fangs

“There has been a perception that technology outperformance has largely been generated by the Fangs,” noted Walter Price of Allianz Technology Trust. But while the continued strength of Facebook, Amazon, Netflix and Google has certainly rewarded investors, there are, Price noted, “a number of unsung heroes” in the sector. After a period of “unexciting growth”, chip makers such as Micron Technology have been “given a new lease of life” by developments such as AI and “the connected car”, said Danielle Levy on Citywire. Allianz reckons that the tech sub-sector most likely to deliver in 2018 is robotics. Its positions include Teradyne, which makes small robots designed to help humans complete tasks more efficiently, and IPG Photonics, which makes lasers used in manufacturing.