Two days after publishing his annual letter to shareholders, Warren Buffett is on speaking on CNBC with Becky Quick.
Equity fund managers Todd Combs and Ted Weschler will also be on later in an extremely rare appearance.
Off the bat, Quick asked for his take on the tension in Ukraine.
Rather than addressing the turmoil directly, Buffett said that he does not consider these types of skirmishes when he invests in companies.
“I never really buy businesses based on macro factors,” he said.
He noted that he invested in his first business in the wake of the attack on Pearl Harbor.
On The Stock Market
Regarding the market itself, Quick asked if the mum-and-pop investor really could get a fair shot as some argue that the market is actually rigged.
Buffett was sceptical that the $US20 trillion + stock market could actually be rigged.
“People should stop calling it the stock market,” he said. “It’s American business.”
On The US Economy
“Exactly what’s been going on since the fall of 2009 continues,” he said reminding us that he gets live updates from the 80+ companies he invests in. “Moderate but consistent growth for four and a half years. Every now and then we get excited about a speeding up and every now and again we worry about a double dip.”
“In terms of what we see, it’s been almost a straight line, but not at the kind of slope that people would like. But not flat either.”
“We haven’t gotten wildly optimistic and we haven’t gotten wildly pessimistic,” he added emphasising that things have been pretty steady.
“It’s certainly a factor,” he said. “Our railroads don’t work as well… and those things compound.”
“The biggest risk…to us would be earthquakes in New Zealand,” said Buffett recognising that the hurricane insurance business has been very good to Berkshire.
On Selling Coca-Cola, Wells Fargo, And American Express:
“None of the stocks are forever but they’re for very long terms,” said Buffett to a question of when he planned on selling these stocks.
A reader asked if Buffett felt he made a mistake with this stock.
“The financial performance has been pretty good but its been helped with low tax rates,” Buffett said adding that there was a lot going on in the business due to cloud tech. “It’s fair to say I know less about the future of IBM than I do about Wells Fargo or Coca-Cola… In terms of the price action that means little to me. The fewer the shares outstanding the better I like it…. I would like to see the revenues pick up.
“We bought a few more shares last year, but not many. We bought a few shares this year.”
Buffett’s still bullish on the industry
“The future of railroads is very good,” he said.
On The Keystone Pipeline
It’s a “very good idea for the country.”
“I’d vote yes,” he said later.
On Being Considered ‘Too big to fail’
Buffett says Berkshire has heard nothing from regulators about the derivatives on his book making his company TBTF. “We never have any significant short term debt, we always have bundles of cash… It’s very unlikely we’d be categorized like that. We’re large, but Exxon Mobile is large… It’s very unlikely we’d be categorized like that.”
“It’s more or less a stalemate,” said Buffett, who also said he can’t imagine things getting worse.
On Raising The Minimum Wage
“It really cuts both ways, you’d like to have people getting paid more but you also want more people employed. I could argue both sides… What you really should do is increase the earned income tax credit… I think you can accomplish way more through the earned income tax credit… There’s trade offs on the minimum wage and you can do all these studies but they don’t know.”
The Greatest Thing Obama Can Do To Create Jobs
“Further fiscal stimulus would increase job growth,” said Buffett, “but you pay a price for that.”
Buffett also disagrees with the view that the Fed’s low interest policy is exacerbating the issue.
Who’s doing a better job cleaning up their mess? — Obama or BofA CEO Brian Moynihan
“Brian Moynihan didn’t have to convince the United States Congress,” said Buffett.
On Ukraine as WWIII or the next Cold War
“The last thing you’d want to do is hold money during a war… During WWII the stock market advanced…. You’re gonna be a lot better off holding productive assets over the next 50 years over stocks or bitcoin.”
“It’s not a currency,” he said. “I wouldn’t be surprised if it wasn’t around in the next 10-20 years.”
“It’s being priced off the dollar,” Buffett added. “It is not a durable means of exchange.
On Todd Combs And Ted Weschler
“Todd and ted look at investments very much like I do,” he said noting that they think about businesses rather than stocks.
“It’s a combination of soundness and brilliance,” he added saying that they think about the things that haven’t happened yet.
“They’ve made Berkshire billions already.”
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