Warren Buffett on CNBC Squawk Box
Mar 5th, 2008 by Martin Lee
A few days ago, Warren Buffett had a live appearance and interview session on CNBC Squawk Box with Becky Quick. The session was pretty long and a part of it was for Warren to answer a series of email questions from CNBC’s readers. I’m producing a summary of some points from the interview. Some of these are his replies to questions from the emails:
- There has been a lot of de-leveraging, and there’s more to come.
- Even though the US has not meet the technical definition of a recession, it is already in one. He deduces this from lots of indicators, including sales at his businesses and the reduction in people’s net worth.
- Over the long run, the US economy will do fine.
- Ben Bernanke has a tough act balancing the economy and inflation.
- While stocks are not cheap now, they are not extreme either. He’s waiting for them to become very cheap. More value can be found in bonds now.
- While agricultural commodities may not continue to rise, the price of oil will probably go higher because the supply is finite while consumption continues to grow.
- Most hedge funds do not justify their fees. Hedge fund mania will fade with time.
- Company’s CEOs doing a good job include Costco and General Electric.
- Rather than buy a lottery ticket, gamble at Atlantic City or invest in Ambac, a person should just buy a low-cost and no-load mutual fund.
- US dollar should continue to fall as long as trade deficit continues. He’s not shorting the US dollar currently as the carrying cost is too high.
- Buffett believes in free trade, but he thinks we shouldn’t “force feed” U.S. dollars to other countries by importing more than we export.
- A weaker dollar helps exports.
- If you loan too much money on anything, you’re going to lose money, if the companies borrowing are good.
- Ethanol is an inefficient way of upgrading gasoline.
- The market is there to serve you, not instruct you.
- Sometimes he makes mistakes in judging the honesty of a person, and sometimes they change over time. Therefore when buying a company, he likes to buy from the second of third generation of a family business.
- When asked about alternative energy, Buffett says he doesn’t guess what will do well in the future. He sticks to basic stuff he can understand.
- Soveriegn wealth funds are inevitable as the US is spending more than she is earning.
- The corporate culture at Berkshire is unlikely to change much after his death.
- Examples of smart people in financial matters: Bill Gross, Charlier Munger and the four people he has identified to succeed him.
For the trancript to the entire 3-hour entire, here are the links:
- Warren Buffett Answers Your Emails on Squawk Box: Transcript (Part 1)
- Warren Buffett Answers Your Emails on Squawk Box: Transcript (Part 2)
- Warren Buffett Answers Your Emails on Squawk Box: Transcript (Part 3)
- Warren Buffett Answers Your Emails on Squawk Box: Transcript (Part 4)
- Warren Buffett Answers Your Emails on Squawk Box: Transcript (Part 5)
- Warren Buffett Answers Your Emails on Squawk Box: Transcript (Part 6)
- Warren Buffett Answers Your Emails on Squawk Box: Transcript (Part 7)
- Warren Buffett Answers Your Emails on Squawk Box: Transcript (Part 8)
- Warren Buffett Answers Your Emails on Squawk Box: Transcript (Part 9)
- Warren Buffett Answers Your Emails on Squawk Box: Transcript (Part 10)
- Warren Buffett Answers Your Emails on Squawk Box: Transcript (Part 11 and Final)
Updated: Your can download the interview transcript in pdf here.