Buffett: Us Residential Housing Starting to Pick Up
Warren Buffett, Berkshire Hathaway CEO, discusses the global slowdown, saying the stock market is generally the best place for investors to have their money.
Warren Buffett: Global Economy ‘Slowing Down’
In this “Squawk Box” excerpt, Warren Buffett tells Becky Quick there’s “no question” the global economy is slowing down, but the U.S. is “inching along” as the U.S. residential housing market starts to improve.
Buffett: Instincts Go Against QE3
Warren Buffett, Berkshire Hathaway CEO, weighs in on the Federal Reserve’s decision to issue another round of quantitative easing; adding, he has “enormous respect” for Bernanke but has concerns over “expanding the balance sheet of the Fed.”
box, we are speaking to warren buffett and becky is out there.mr. buffett telling us he’s beenying wells fargo this week. that stock has now turned positive since those comments. becky, they told me to ask a question. is that okay? i’m not going to presume – yeah, go ahead. warren, you like to buy. you just said you like to buy. peter sellers liked to watch, but you like to buy. buying doesn’t preclude watching. no, not with you, i’m sure. but that — i figure anything that moves the market higher,you’re not going to — better than a sharp stick in the eye. so qe-3 is great. market’s been going up. but if you were a voting member, and they’ve got another one of the meetings today, two day — i don’t know, they come so quickly, i don’t even remember. if you were there when they voted for qe-3, would you have voted yes for qe-3 if you were a voting member? i hadn’t thought about that, but i would say this. i would listen very carefully to bernanke, but my instincts would probably be to go the other direction. but i would listen to his arguments. you said with qe-2, you thought maybe it was going too far at that point. so qe-3 is doubling down on that. my instincts are to goagainst it. i think it’s much easie if you’re a central bank and youcan print money. it’s much easier to acquire $2.7 trillion of securities than it will to be unwind that operation. and you can expand it indefinitely. if he wanted qe-2 to be $100 billion a month or qe-3, he’s the one guy that can do it. he has unlimited buying power. mited selling power could be a little different. you need some cooperation on that. warren, you’re a supporter ofthe president, though, governor romney suggested tha would — i wouldn’t suggest he would fire bernanke, but he wouldn’t pick him up for a third term. not clear, by the way, that bernanke wants a third term even under obama, but how does that in terms of politics? i think bernanke has done an absolutely superb job. i mean, what he did in the fall of 2008 was gutty, it was basically right, you know, everybody can talk abouttinkering at the edges, but i will say this, if ben bernanke hadn’t been there in 2008, i’m not sure where we would be now. i have enormous respect for him. he’s a very, very intelligent man.you’ve got to respect him enormously. and, you know, he sees an omy that he’s sort of fighting by himself to get started when you look over at a congress that’s more or less paralyzed. and i would never bet against him. i would say that i get a littleworried about continuously expanding the balance sheet of the fed. and, you know, we now are getting 3% of our revenues from the profit that the fed is running on its carry trade if you look – the united states gets 3%? yeah. that 2.4 trillion or 2.5trillion of revenue, the fourth biggest item, the first item ispersonal income taxes and then payroll taxes, then corporateincome taxes, the fourth is dividend from the fed. he makes $70 billion or $80 billion last year. this is unheard of if you go back a few years. when he borrows, he’s got $1.25 trillion, then $1 trillio of money in circulation,ch he doesn’t pay anything for except for the cost of the paper. do you worry about inflation down the road? is this something we’ll see coming? will we be able to put the brakes on in time and try to get the liquidity back out of the system? nobody understands that problem better than bernanke. yeah. that doesn’t mean i necessarily think the solution is going to be perfect. i’d rather have him thinkingabout it and trying to modify the impact of – but to andrew’s point, if he doesn’t have another term or if he chooses not to stand for another term and there’s someone else there, that person’s going to have a pretty difficult job. yeah, depends who it is. but i would vote for bernanke again. you know, i get my kids out and everybody else to vote for. but if bernanke says thathe’s not even interested in staying. they worry that he knows what he’s leaving behind. he says he maye hav done enough time there. well, i think he probably feels that way, particularlyafter his congressional testimony. but i do think if the presidentof the united states asks someone like ben bernanke to stay on, i think he will stay on. i think he’s that devoted to thecountry. all right. and i would rather have him there than anybody else. warren, do you think where the bond market is right now given the extraordinary action by the fed, do you think it’s not that far from where it would be if they hadn’t been asactive? and then i guess it’s okay. but if it be long way fromwhere it is without them, doesn’t that cause some dislocations that eventually are going to come back to haunt us? i like when stocks go up too. and i can see it in your eye, you like when the market’s going up. i’m wondering, is it worth it? no, no – you do. who doesn’t like when the market goes up for whatever reason. but if it gets to a point where it’s not up based on theunderlying fundamentals, seems like sooner or later somethinghas to happen, no? interest rates are — the prices of all assets, you know, li gravity is to the function of the earth. everything is based off interest rates. it may not seem obvious that the value of some plantation in brazil or something is geared off of it. but everything relates to interest rates. you start with what you can get risk-free interest rate. and so it has a huge, hugegravitational pull. affects what i’m doing. it affects what everybody’s doing. affects what you’re doing at berkshire?yeah. if i’m getting 0% on money, i am going to look at other assets somewhat differently, whether it’s buying a farm or anapartment house or anything else. and of course, the people who will lend money to me to buy the apartment house are going to lend it to me cheaper. it’s one of the reasons irecommended housing six months ago because the low interest rates caused low mortgage rates and low mortgage rates and when you can sign up for 30 years off a policy that may be in effect for another year or two, you’re getting a tremendous deal. but, no,joe, the fed has had an enormous effect on interest rates. but it’s okay. well, i don’t know if it’sokay or not. but i know that – the price is going up. well, i would say that it’s marvelously okay if you’re buying a house or something like that. but in terms of policy. in terms of policy, the chairman of the fed and the members of the fed made a decision that the economy needed enough of a jolt. and it wasn’t going to get it through enlightened fiscal policy and they were going to basically carry the whole load themselves. i don’t think they enjoy it, but i think bernanke, i think he’s avery responsible gu now, it doesn’t mean he calls them all right, but i think he’s
Buffett: ‘We Mostly Buy Stocks For Future Earnings’
Warren Buffett, Berkshire Hathaway CEO, discusses his long-range investment strategy, and weighs in on IBM.
i don’t know why buffet doesn’t put all his money in verizon andat&t. do you ever look at those companies? i don’t know what it would look like five or ten years from now. there he goes again, 100 years from now, so 5% in the meantime, you know, that’s true, though, warren. people would say, i’ve got a 5% yield, doesn’t take much for stock to go down 5%, does it? that yield doesn’t necessarily hold up if the market’s headed south. like toll booths – yeah. we mostly buy stocks for future earnings. if you used all the money to repurchase shares that could beeven more advantageous. because you end up owning a bigger and bigger chunk o the company. ibm spent 3 billion in eachquarter of this year. the cheaper they buy it, the more our interest goes up. you still like ibm after all the troubles technologycompanies have seen? they’re struggling a little. it was kind of interesting. in the — we owned — we own a little more than we owned at year end and we got great confidence over the years.but in the third quarter, they had a sale of a subsidiary rss that produced about 288 million, i think after tax, which was all the gain. and to my knowledge, the wall street journal did not have a line on it. it was one line in the report and it counted for all the gain in earnings and it was a sale of part of a business. you know, i think the reporting missed the boat on that one.
Buffett: ‘We’ll Add 8,000 Jobs Organically’
Warren Buffett, Berkshire Hathaway CEO, weighs in on what Berkshire Hathaway is doing to create jobs, adding “we’ll probably add another 10,000 or 15,000 jobs on acquisitions” this year.
welcome back, everybody. we are with warren buffett thismorning in columbus, ohio, at the summit sponsored by general electric and ohio state university’s business schoolhere. we talked an awful lot about businesses. the reason we’re here today is because of this focus on mid-sized businesses. an awful lot of questions about jobs and the jobs picture out there. mid-size companies account for a lot of the job growth we’ve seen over the last several years. can you talk to us a little bit about what berkshire’s been doing in terms of jobs. berkshire probably has at least 50 of the 75 companiesthat would fit the middle market 10 million to 1 billion of salescategory. it looks to me, there’s a few months left. but it looks to me like we’ll add at berkshire on a base of 270,000, we’ll probably add about maybe 8,000 jobs organically. and then we’ll probably add another 10,000 or 15,000 on acquisitions.for this year that we’re in right now? yeah. certain businesses like geico and burlington northern have added people. then we bought a fair number of what we call build on acquisitions. in terms of the jobs growth, what about the companies that are related to housing. you’ve been talking about how you’ve seen a turn there. has that translated into jobs growth? there’s some job growth. our clayton homes is going to produce something like 15% more homes this year and that takes more people.and geico is going to sell more insurance policies and thattakes more people. and the — our furniture businesses are doing very well. we’re selling a lot of carpet and furniture. and so we add people, but we’ve also got to add — moreacquisitions this year than ever before in our history by somemargin. and they bring with them thousands and thousands ofpeople. how much cash do you have onhand right now? bly have at least 40 billion. are you on the hunt for another big acquisition? i’m salivating. yeah. a fellow handed me a card last night and said this will cost you $6 billion. and he didn’t give me the financials, but i’m going to call him when i get — i know the company. so when i get home, i’ll call him and ask him for the financials. have you looked at any other big acquisitions? we had two acquisitions this year. possibilities that were plus and minus $20 billion. and where the ceo wanted to do it, but it didn’t get done. prices are tough. prices are tough right now. yeah. all right – and cheap money makes that a factor in it.
Buffett: ‘We Buy on an All Equity Basis’
Warren Buffett, Berkshire Hathaway CEO, says he feels some of the acquisition prices are getting out of control, but adds he is “salivating” to do another acquisition.
welcome back, everybody. we are coming to you live from ge capital’s middle market summit taking place at ohio state university in columbus. i’m joined by berkshire hathaway ceo warren buffett. and you’ve been talking about how you’ve been on the prowl looking for big acquisitions around $20 billion or so. a couple have fallen through, but part of it is becausepricing’s difficult. pricing’s difficult and money’s cheap. we don’t leverage our purchases and we’re buying on an all-equity basis. but people that do leverage are getting significant portions of the purchase price at very, very low rates, probably as low as they’ve gotten. so that enables them to bid pretty aggressively and doesn’t factor into our thinking. you think at this point maybe some of these acquisition prices are getting a little out of control? well, that’s the way i feel. but, you know, that’s natural when you’re getting beaten out. but you won’t raise your prices to compete? no. but now we had a record for boldon acquisitions. we’ve probably done, i don’t know, maybe 15 different acquisitions, but probably add up to $2 billion or something of the sort. and they’re good and fit in withcompanies we have. but what i really like is the elephant. so you’re always out elephant hunting. absolutely. with your elephant gun. and they’re more likely to come along when monditions are fairly tight or something of the sort. if you can borrow money at these rates, you can pay a lot of money. and other people if they pay the wrong price, they walk away fromthem. but if we pay the wrong price, we live with them forever. if these deals haven’t gone through, that means you’ve beenlooking more aggressively for stocks to buy in the market. well, we’re always looking for stocks and i’ve got two fellows working for me that are really looking for stocks all the time. but i usually end up buying more of something i already know. any new company, any new stock i look at, i measure it against the best idea i’ve got among the present ones, and i’m perfectly willing to just keep adding to the present ones. so it has to beat them.and i know those companies pretty well, so it’s a pretty high threshold. let’s go back to ibm. you were talking a moment agoabout ibm, have you added any shares to that company in thelast couple of months? maybe — we’ve added shares this year.we haven’t had a lot of shares. but we’ve — well, we probablyadded, you know, being many hundreds of millions. wells we probably added maybe $1 billion worth, something like that.when you first announced your stake in ibm, it caught a lot ofpeople by surprise because you have always stayed away fromtechnology companies, you’ve said it’s something you didn’treally understand and so you didn’t want to get involved with it.right. in looking at ibm, you said it was a little different situation, it made senseu at that point. i guess part of that is the services factor ofit. but when you look at these big technology companies, looks like some of them may be maturing, have you regretted getting into ibm shares at all? no, i’m delighted to be in it. uh-huh. and i think they’ll probably do better abroad than in united states over time. when we buy something like that, i go to our companies and see what they’re doing and plan to be doing in future years. and how tied in they are with given suppliers and how much stickiness there is to it. and so we — i — even though, you know, if you put me in a computer room and spin me around, i’m lost, you know, i just hoping it helps me get out. but i do know what our managers tell me about their plans.and the degree to which they’re involved. and i had one manager tell me something that isn’t quite repeatable in terms of — you get pretty locked in sometimes with your supplier.what’s not repeatable? well, i asked him how sticky — i won’t name the company, he said, well, it’s like – so it sticks. it really does. i should bring up the insurance companies. they’re big.jim cramer had said he’s very interested in hearing more aboutwhat’s happening with insurance because a lot of insurancecompanies have been doing very well lately. what can you tell us about berkshire’s? they’re doing very well. we have about$70 billion of other people’smoney, we call it flow. and when we run a underwriting profit, i get to earn the money on this. and this year we’ve had an underwriting profit. not only have they given us $70 million, but they give us more money to hold it. so when insurance’s good, it’s terrific, and it’s been good this year. what do you know about the consumer not only from the companies you have at berkshire that you own outright but from a company like coca-cola and being able to look around the globe to see how consumers are feeling. there’s been a lot of pressure on some of the consumer products companies because prices for commodities have gone up and sometimes they can’t pass those on to their consumer. when you think about it, coca-cola’s been around since 1886. that’s amazing. and it’s the basic product. now it’s got a whole bunch of extensions too. but coca-cola’s physical volume, not dollar sales, but physical volume was up 4% in the first nine months, and that’s in a world that’s growing maybe at . so their per capita usage of coca-cola products has gone up almost every year since 1886. he’s done a terrific job running that company.it’s a huge distribution machine. and mexico, i think the numbernow is up to over 600 plus 8-ounce servings per capita of coca-cola products, man, woman, and child, which is at least 50%higher in the united states. and grows every year, growing in the first nine months, it’s quite a product.
GE’s Immelt: ‘General Trend is Still Positive With Volatility’
GE CEO, Jeffrey Immelt, discusses general global trends, adding “the economic recovery will be volatile,” He explains why he believes natural gas is going to be a long term trend. Also, Immelt and Warren Buffett, weigh in on the fiscal cliff and its impact on the economy.
Where Buffett Is Investing Now
Warren Buffett, Berkshire Hathaway CEO, weighs in on Procter & Gamble’s disappointing earnings, and reveals where he is moving his money around.
Buffett: Election Comes Down to Who Has Better Ground Game
Warren Buffett, Berkshire Hathaway CEO, weighs in on his support for Pres. Obama and the presidential race, saying “the first debate changed things dramatically.” Adding, “Romney got a second chance to make a first impression.”
forecasts, full-year guidance topping consensus. let’s get back to becky and warren buffett. do you mind? can i ask – no. no.are you sure? no, you can wait. you can come in in a moment. i have one question to ask him and i know you’re going to want to play on this. stay with me for one moment. warren, i think we’ve let you go for long enough. you are a big supporter of president obama. correct. we have an election coming up. correct.things have changed in the polls over the last month or so,probably since the first debate. what do you think is going tohappen at this point? i have no insight that anyone else doesn’t have. if you go to intrade or something, their odds would beabout the same as my odds. you know – joe was just pointing them out a little bit. what are they this morning, joe? 54%? 55 now, 55 and change. that’s movement. that’s a fair amount ofmovement. now 56. that’s movement. and it may come down to who has the better ground game here in ohio. you’ve been watching elections a long time, though, what do you think happened? i think the first debate changed things dramatically.they say in life, you never get a second chance to make a firstimpression. romney got a second chance to make a first impression. he’d been portrayed a certain way through republican debates, advertising, and in the first debate 69 million people saw a different romney than they had more or less expected from the earlier republican debates as well as the advertising. did you see a different romney? it was huge.warren, did you feel like you – he’s asking if — did you see a different romney in the first debate? well, yeah, i saw him behave differently, yeah. he was less robotic. he was — he was aggressive without being rude. and obama was down that night. no question about it. that was that huge factor in thecampaign. you know you’ve been a huge supporter of the president, do you think it matters who gets elected and what it means just for business next year based on who gets elected.well, i do think under either of the two candidates, either one that becomes president, american business is going to get a lot better over the next four years. i think that in terms of socialpolicies, i think if i were a woman concerned about reproductive rights, i think there could be a very distinct difference. if i was concerned about supreme court appointments, there would be a difference. but the economy will get better under either one of them. joe, go ahead, i’m sorry. i want to stick with politics a little bit, warren. and you always surprise me. i never know how you’re going to answer this. i want to talk about a local politician here in new york. and i’m talking about mike bloomberg. every democrat’s favorite republican. let’s sayhat this caught on and that it was a nationwide ban on any coca-cola sold in acontainer that had sugar. sold over 16 ounces. does that make sense to you to do that for the obesity problem? you’re a big cok shareholder. and then i think about, you know, dairy queen and ice cream’s not good for you either. i there must be aay that’s adding to obesity and those crummy hot dogs you sell in your dairy queen. is this something that makes sense to you? first – yeah, go ahead. first of all, i’ve got to say, dairy queen sales were up 5.8% in september same store. you see where i’m going with this. but ice cream, i eat it for breakfast sometimes.and i’m 82, you’ll have to judge – well, somebody might not likeyou doing that at your age, warren, adding to cholesterol. and you might get taxed on it because we don’t really think it’s a good idea for you to have ice cream for breakfast. is that okay?yeah, well, let’s look at the 16 ounces of coke. 16 ounces of coke has 200 calories in it. and i would say there’s an awful lot of servings of a lot of things that have 200 calories or more, and the idea to say you can drink 200 calories of something but not 210 or 220 seems to be kind of silly. in the end, i’ve elected thefoods to eat over the years i like to eat and i think it’s kept me quite healthy. and if i’d been on broccoli and spinach, i’d been gone a long time ago. but i drink about – why don’t you tell me it’s preposterous and bloomberg has got a screw loose. why don’t you say that? well, because you’ve said it for me. all right.but you wouldn’t disagree with me? and then i’ve had people in from mt. sinai, doctors that tell me, hey, oh, well, cigarettes, youwant — it’s like cigarettes, you don’t want to tax cigarettes. and i go, well, red meat 20 years ago was the cause of all heart disease, and oh, that may not be the end all be all. i eat lots of red meat. no, it’s not – i eat lots of red meat, joe. and i drink about 60 ounces, about five 12-ounce cans of cherry coke a day. and that’s 750 calories but i elect to get — i’m going to –your prerogative. 750 of them are going to be cherry coke. and my doctor told me said drink more liquids and i said, you know, i said how about cherry coke. he says it’s fine. insanity. it’s insanity, and someone needs to tell this guy that. although he’s going to be every republican’s favorite democrat. andrew, god, if he ran for president, you’d be out there, you’d have 40 signs in your yard, bloomberg for president. i’ve got to say, mayorbloomberg has done a lot of terrific things. all kinds of things.this ruins it. i’ve also had dinner with him in sun valley after this came out and when they brought out the dessert, there was more than 200 calories in this dessert. i’m unable to determine why those 250 or 300 calories of dessert he was eating wasdifferent than my coke. did you say that? i had the biggest bottle of coke brought out that i could find. and did he drink from it? i drank from it. i wasn’t going to let him have any. getting back to the national election, you point out it could be the ground game right here in ohio. sure. that makes all the difference. i know you don’t have inside information, you’ve been watching elections for a long time. your father was a congressman, you used to watch those races very quickly. what do you think it actually comes down to what it means? i think in ohio may verywelcome down to organization. there’s been a lot of early voting in ohio. right. that’s organization. you want to get out your voteand a lot of people say they’ll show up on election day. and particularly when you’ve got a history as the democrats do ofturning out less of their base than the republicans. so early voting is a huge advantage to democrats. they are not going to get the same percentage of their base out on election day asrepublicans traditionally. so we’ll see who has the better ground game. no matter who wins the election, we are going to belooking at a different treasury secretary. right. tim geithner has made it pretty clear that he wants to go. you know a lot of people in finance, you know a lot of people, have you thought about who might make a good pick for treasury secretary?yeah, i do. and i won’t get a call from — i won’t get a call from governor romney asking me my opinion. but i think i’ve got a good idea. but i — i’ll say that — we’ll wait and see whether obama’s elected and wait and see if he calls. is it a name that’s been out? erskin bowles has been named recently. he would be terrific. he’s smart, patriotic, absolutely would do the best jobfor the country. erskine bowles is a fine human being. and what he and alan simpson accomplished in getting those 11 to sign on. that’s huge, that takes real negotiating ability. it takes humor, it takes a decent human being to get people to come together like that. i admire him a lot. okay. guys, i will send it back to you
Buffett: Euro Zone Banking Problem Clouds Recovery
It is going to be very tough for Europe to have austerity and at the same time grow GDP, said Warren Buffett, Berkshire Hathaway CEO, referring to the euro zone’s economic problems.
of the morning, warren buffett who has been kind enough to bewith us for the past hour and 45 minutes or so. warren, we look at europe all the time. and you’ve talked to us in the past about the eurozone crisis and what you see happening. you talked about the european banks. you think they’re in a differentposition than the american banks. but last week francois hollande suggested the eurozone is moving out the other side of things. is that the impression you get? i wouldn’t say so. i don’t know how it plays out. i certainly don’t feel that it’s clear on the road to recovery. they have a real banking problem. you have the sovereigns counting on the banks and the bankscounting on the sovereigns. and that creates a problem. and it’s going to be a very tough thing to have austerity at the same time grow gdp. it’s not an easy solution. europe isn’t going to go away. i think it could be pretty rough there for a while. is that a good argument for pulling back from the area? or is this a time you think business – they either have to come closer together or they’re going to go one direction or the other. but the idea of having a monetary union independent of really discipline on the fiscal side, although they said they had it originally. they’ve got to come closer together or it won’t be sustainable. although the ecb has made some major moves to try to reassure the markets and certainly given up quite a bit more time. central banks can print money. it’s a wonderful machine to have. in economics just like life, you can never do just one thing.anything you say you’re going to do is going to haveconsequences. and sometimes those consequences are delayed. certainly printing money has consequences. and not printing money would have consequences in the united states too. but we haven’t seen — the movie’s not over in europe. joe, you have a question too? do you still think a single-family home is one of the best investments around? and have you figured out a way to invest that? you’d like to buy — you said, buy as many as you could but they’re impossible to manage and you can’t do it. have you tried to figure out a way to do it? yeah, and i’ve had a lot of suggestions from people after i made that statement. it’s not really feasible. and certainly compared to other things we can do with money, it’s just too big of a problemto deal with small units like that and management problems and human problems. so i think that anybody that knows where they’re going to want to live has a reasonably assured income, i think they’re making a terrible mistake if they don’t buy a single family home now and get mortgages at these rates, and they should get a 30-year mortgage. it’s really a golden opportunity.it was a little bit better six months ago, but still wonderful now.you’re not going to see a chance like this five years from now. i’ll guarantee you that. five years from now, it’ll be a different picture. and rates will be higher and all kinds of things. and you think prices – if you know — you’ve got to want to live there. and home’s a wonderful thing. but i wouldn’t buy one if i was going to move in six months or something of the sort. and i wouldn’t buy one if i was terribly nervous about my job. warren, a couple you mentioned ted and todd talking about what they’ve been doing as an investment cycle. a lot of times we get these notes from the s.e.c. just about what berkshire is doing withinvestments. how much of it is theirs and home is yours? very little of it is mine. i have four stocks over 50 billion that i manage. i got a bunch of other things too. the action is with them. they’re building up portfolios. they will buy $500 million at a time of something. and probably more prone t move around in securities than i would be. there’s a lot of styles that work. i am enormously pleased. they are paying a higher tax rate than if they were running a hedge fund doing exactly what they were doing if they were at a hedge fund. it’s a really indictment of thetax system when you look at two guys who just moved doing thesame thing from morning to night they did before and now they pay double the tax rate for it. andrew? warren, i want to get anupdate on my favorite subject, newspapers. you bought the omaha herald earlier this year. you have had time to get underthe hood. what do you think? well, i’ll have a big section in the end report about newspapers. i did write a letter to ournewspaper publishers. if you have a newspaper that isindispensable to a significant percentage of its community,you’re going to do well over time. pweay very low multiples forthem. the trend of the newspaper industry is down but you have to be prime air about things that are of interest to your readers.if you’re in grand island, nebraska, where we have a product, we have to be relevant to what people in grand island are interested in. that’s a much tougher problem as you get into bigger metropolitan papers. it’s working better or worse than you expected? newsweek just said they were going to stop printing recently. i know community newspapers are a different situation. a lot of people always have questions. our small newspapers and by that i mean towns of 20,000, 25,000, our small newspapers year for us, the revenues are down about 1%. our larger newspapers like buffalo and omaha and nowrichmond, those papers, which are larger communities, revenues would be down 4% or 5%. there’s a real difference based on relevance of the paper to a very significant portion of its community. the bigger the community, the harder to have a community feeling. earlier this week was the release of greg smith’s book about goldman sachs. a guy that wrote that op-edpiece in the new york times saying this is why i left goldman sachs. did you see any of the interviews that he has done? did you take a look at any of the book? i haven’t read the book. i saw an interview. a guy 33 making $500,000 a year and unhappy because he isn’t making a million and any otheroccupation he wou making $75,000 a year, i thought the idea that one disgruntled employee leaving a company warrants an op-ed with no specifics in it. i did not think that reflected great editorial judgment. i bring this up because lloyd blankfein will be on later in the morning. we appreciate you for spending time for us and when we come back we have the last word that we’ll give to mr. buffett and as
Buffett’s Final Word: Hold
Warren Buffett, Berkshire Hathaway CEO, explains why investors should not “buy” or “sell” on current news, adding, “it’s just crazy.”
let’s get back to becky and warren buffett for the last word. thank you. last word is sort of a free word association game that we’ve been playing lately. i say a word and you tell me what it makes you think of and the question we get most frequently about you coming on is what should they be buying right now. if i say buy, you say? i say hold. the idea the european slowdown or this and that or anything like that would not cause you if you own a good farm run by a good tenant, you wouldn’t sell it because someone says this a news item happening in greece. if you owned an apartment house and you have to raise your rates, you wouldn’t dream of selling it. if you had a goodbusinessperson, you wouldn’t think of buying or selling everyday. when you own stocks, you own pieces of businesses.they’re wonderful businesses. you can pick the best businesses in the world. to buy or sell on current news is just crazy. you’re in a wonderful business. you have people running it for you. you know you’re going to do well over five or ten years. and for think news events should cause you to try to dance in and out of something that’s a wonderful game, it’s a terrible mistake. get into a bunch of wonderful businesses and stay with them. i said buy and you changed it to hold. if you haven’t got them yet, you buy them consistently over time so you average over time and i’ve been buying all my life. i bought my first stock when i was 11 years old. it was about three months after pearl harbor. all of the news was terrible. it was a great time to buy stocks. i should have held that stock forever. i have been buying stocks ever since. do you guys have any last quick thoughts? warren, have you bet zuckerberg and if you sat downwith him and you told him is there any way that he could explain the business well enough to where you would take a hugestake in facebook? probably not. that doesn’t mean that i’mnegative on it. i just don’t understand it well enough. i’m actually not even a member. there’s a billion of them out there. i like to buy things where i feel like i have a reasonable idea of how the business is going to be doing five or ten years from now just like i would buy an apartment house or a farm with an idea that it would be a good thing to own five or ten years later. there’s a watershed event tomorrow that may change your view. you’re free to send me questions as well if you would like. this is a game changer. actually, joe, i thought instead you always wanted a share. i’m going to take this. there’s dozens of planes this. i’m going to give this to becky. thousands of jets.i’m getting a tie. dozens of planes on it. thank you very much for your time today. appreciate it. make sure you join us