The Latest: Buffett says health care costs hurt US profits

OMAHA, Neb. (AP) — The Latest on Berkshire Hathaway's annual shareholder meeting (all times local):

3:25 p.m.

Billionaire Warren Buffett says growing health care costs continue to be a drag on the performance of U.S. businesses, and he's not sure the reform package Republicans passed will do much to help that.

Buffett said Saturday that health care costs have gone up incredibly, and are expected to continue increasing.

The high cost of U.S. health care puts American businesses at a competitive disadvantage with other countries.

Buffett says the one thing he's sure the Republican reforms will do is deliver a big tax cut to people like him with more than $250,000 income and significant investment income.

2:45 p.m.

Investor Warren Buffett says Wells Fargo made a huge error in failing to respond promptly to its sales practices scandal.

Buffett told Berkshire Hathaway shareholders Saturday that the bank should have done more to correct the problem once it was discovered.

Buffett says Wells Fargo didn't act promptly when it discovered the problem. The bank said last fall that its employees opened up 2 million bank accounts without customer approval to meet unrealistic sales goals.

Berkshire is Wells Fargo's biggest shareholder. Buffett says he still believes in the long-term prospects of the bank even though Wells Fargo mishandled the scandal.

2:30 p.m.

Warren Buffett continues looking for major acquisitions for Berkshire Hathaway.

Buffett told shareholders Saturday that Berkshire could do a very large deal because it has more than $90 billion cash on hand.

Buffett says he likes to keep at least $20 billion to $25 billion on hand for emergencies or any large insurance claims, but he's actively looking for a big deal.

Currently, Buffett believes he can find a good use for Berkshire's cash, so the company doesn't pay dividends and rarely repurchases its stock.

Buffett says the board would look at both options if it ever decided he could generate good returns by investing the money.

1 p.m.

Investor Warren Buffett says one of the most-important skills his eventual successor will need is a talent for allocating all the cash Berkshire Hathaway's businesses generate.

Buffett said at Saturday's annual meeting that it's crucial his successor have what he calls a "money mind."

Buffett has no plans to leave his job as chairman and CEO of the Berkshire Hathaway conglomerate he built through acquisitions over more than 50 years. The 86-year-old told his investors that the company's plan to replace him hasn't changed.

Buffett says his successor will have to be able to wisely invest Berkshire's cash without making major mistakes. Currently, Berkshire has more than $90 billion in cash on hand.

11:25 a.m.

Billionaire Warren Buffett says Berkshire Hathaway's insurance businesses will continue to thrive regardless of who's leading them.

At Berkshire's shareholder meeting Saturday, Buffett was asked about the challenges of replacing Ajit Jain because Buffett has heaped praise on Jain for years.

Buffett acknowledges some insurance deals might be impossible to replicate once Jain is gone, but says a lot of solid habits are institutionalized at Berkshire's insurance companies.

Berkshire owns Geico and General Reinsurance as well as a number of specialized insurers that handle malpractice, worker's compensation and other businesses.

For his own position as Berkshire's CEO and chairman, the 86-year-old Buffett says there's been no change in the plan to eventually replace him.

11:10 a.m.

It's hard to say exactly how much Berkshire Hathaway would benefit from a major tax cut.

Berkshire CEO Warren Buffett says the effect to a tax cut would vary across the more than 90 different businesses the conglomerate owns.

For instance, at the regulated utilities Berkshire owns, any benefit from a tax cut will be passed on to customers through lower rates.

In other businesses, it will depend on how much competitive pressure there is to lower prices after a tax cut.

Buffett made his comments during the company's annual meeting Saturday in Omaha, Nebraska.

10:45 a.m.

Investors Warren Buffett and Charlie Munger told Berkshire Hathaway shareholders that they probably should have recognized Google's brilliance and invested in it.

But the top two executives at Berkshire had long ruled out technology companies because they believe it's too hard to predict which ones will prevail.

So they missed out on Google even though they knew the business well because Berkshire's Geico insurance unit advertised with the search engine.

Munger says in retrospect, he thinks he and Buffett were smart enough to figure out Google's prospects early on, but they didn't.

In recent years, Buffett has ventured a bit into tech investing but with mixed results. He said Friday that Berkshire recently sold off one-third of its 81 million IBM shares because the investment hasn't performed as well as he expected.

Berkshire holds about 133 million Apple shares, but Buffett says he looks at that more as a consumer products company instead of a technology company.

10 a.m.

Investor Warren Buffett says he believes it works better to hold his employees to a high standard and expect them to do the right thing instead of imposing extensive rules.

Buffett says he always urges Berkshire Hathaway employees to protect the company's reputation above all and avoid questionable behavior. Buffett made his comments during the company's annual meeting Saturday in Omaha, Nebraska.

He believes that will help Berkshire avoid scandals like the one that hurt Wells Fargo last year. Berkshire is Wells Fargo's biggest shareholder.

Berkshire is known for its decentralized structure with fewer than 30 people at headquarters that allows the more than 90 companies it owns to largely run themselves.

"We count very heavily on principles of behavior rather than loads of rules," Buffett said.

Buffett says Berkshire will occasionally have problems because it has 367,000 employees.

9:20 a.m.

Billionaire Warren Buffett paid tribute to Vanguard founder Jack Bogle at Berkshire Hathaway's annual meeting Saturday.

Bogle attended Berkshire's meeting Saturday after Buffett praised him in his annual letter to shareholders this year.

Buffett has long recommended that most casual investors would be better off investing in index funds steadily over time instead of trying to pick individual stocks.

Buffett says Bogle played a major role in creating the index funds that are common today, and that has helped millions of investors earn more because the fees are so cheap.

Buffett, who is 86, said Bogle will celebrate his 88th birthday Monday. Buffett joked that if Bogle holds out for just a couple more years, he'll be old enough to qualify for an executive job at Berkshire. Buffett's Vice Chairman Charlie Munger is 93.

7:10 a.m.

When billionaire Warren Buffett toured the exhibit hall where Berkshire Hathaway companies are selling their products outside Berkshire's annual meeting, he was again surrounded by a pack of reporters, shareholders and security officers.

At Berkshire's annual meeting Saturday, Buffett is the celebrity that everyone wants to get close to. While Buffett met Mr. Peanut at the Kraft Heinz booth, Miami Dolphins defensive lineman Ndamukong Suh wandered a few feet away without a crowd.

While he wandered through the hall, Buffett told reporters that he continues to believe the economy is growing steadily at about 2 percent a year. And he told a recent college graduate to try to find career that makes use of her skills and appeals to her passions.

Shareholder Elizabeth Varner said it was fun just listening to Buffett while walking near him in the crowd and trying to shoot pictures of the down-to-Earth billionaire.

6:30 a.m.

Listening to Warren Buffett never gets old to the thousands of Berkshire Hathaway shareholders filling an arena to listen to the billionaire investor at the company's annual meeting.

The chance to hear Buffett and Berkshire Vice Chairman Charlie Munger field questions for more than five hours is again expected to attract more than 30,000 people to Omaha, Nebraska, on Saturday.

Seventy-year-old Dave Mueller flew out from Denver, Colorado, for his fourth meeting because he loves hearing the 86-year-old Buffett and 93-year-old Munger talk.

Dozens of companies Berkshire owns set up booths in an adjoining 200,000-square-foot exhibit hall to sell their products and take questions about their businesses.

Shareholder Jerry Meyer said the exhibits are a neat way to learn about Berkshire and boost investor enthusiasm.

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Berkshire Hathaway Inc.: www.berkshirehathaway.com