Warren Buffett was on CNBC this morning talking to Becky Quick. He does this every year after his annual letter.Basically he’s bullish on the global economy, America included.
Notable comments below:
On the economy: Our businesses are “closer to inching along” than chugging along. Things are getting better consistently, but not at a dramatic pace. What’s doing good? Railroads are about 60% of the way back from the bottom.
On China: It’s morning in China AND it’s morning in America.
On the Mideast: He’s not too concerned at this point, but mainly he says he just doesn’t know the answer. “6 months or 8 months ago we weren’t worried about cotton prices at Fruit of the Loom.” So obviously shocks can and do happen unexpectedly.
On the jobs market: We only added 3,000 jobs last year, but going forward businesses will do better.
On housing: The excess housing supply is being sopped up thanks to household formation. In about a year we’ll have sopped up the excess housing supply.
On bonds: He says he hates bonds, but then he always says that.
On stimulus: Any government spending that’s above tax receipts is stimulative. So we’ve had stimulus since WWII.
On QE2: Probably should end it now.
On commodities: Still not a fan. You’re just betting on what someone will pay you for them. But, perhaps, a farm could work, since it throws off income.
On Gold: If you took all the gold in the world, it would make a 67 ft cube. It would be worth about $7 trillion, about a third of the value of all the stocks in the U.S. So you can own gold, which can do nothing, or stocks. You could also have farmland. If you gave me the choice, between all the farmland in the country, stocks like ExxonMobile, or gold, I’d choose the stocks and the farmland.
On acquisitions: Always have a gleam in my eye. Will always have something that’s at least a very, very low possibility. More on acquisitions: He says he prefers to buy private, not public companies. He has no preference between acquiring in the US or abroad.
On Wall Street harassment: Funny moment here. Carl Quintanilla asked Buffett whether he thought bankers have been harassed too much, but Buffett points out that his main complaint is that managers are harrassed too much by bankers.
On why he doesn’t make more aggressive alt-energy investments: “I’m not smart enough to see the future” hard enough to see the past.
NetJets: Just bought more plains. There will be more demand for general aviation in the future.
On credit cards: They’re evil, though American Express is a realy special company.