Berkshire Hathaway CEO Warren Buffett spoke with Fox Business Network’s (FBN) Liz Claman in a wide-ranging interview about the Federal Reserve, buying a new business in Europe and Walt Disney stock. When asked whether the Federal Reserve will start raising rates Buffett said, “I think it’s going to be very tough to raise rates when you’ve got what’s going on around the world.” Buffett also said, the last thing he would “want to buy is a 30 year government bond.” Buffett commented on buying a new business saying, “We’re probably going to buy a small business in Europe.” Buffett also discussed Walt Disney and not owning the stock saying, “I made a terrible mistake” and Walt Disney CEO Bob Iger “is really, really good. And he’s a great guy on top of that.” When asked about the newly expanded Nebraska Furniture Mart, Buffett said, “I believe the store will do over $1 billion.” Buffett also comments on beating cancer saying “it really wasn’t a big problem. The radiation was painless.”
Excerpts of the interview are below:
On Nebraska Furniture Mart expansion:
[drizzle]“I believe the store will do over 1 billion dollars. I really think it will. This is the largest home furnishing store in the United States and we’re in the 50th or so largest market we do 450 to 475 million here. We do $20 million in the week of the Berkshire meetings, so we can do a lot of business. I think it’s going to be very big.”
On whether the Federal Reserve will raise rates:
“I think it’s going to be very tough to raise rates when you’ve got what’s going on around the world. It would be very tough for them to raise rates. I don’t think it will be very feasible to do, I think you would have a lot of international repercussions. “
On whether he’s beaten cancer:
“Oh yeah, and it really wasn’t a big problem. The radiation was painless. My PSA is below 1.”
Succession plan:
“The directors know. We talk about it all the time.”
On whether Berkshire Hathaway Energy CEO Greg Abel is the eventual successor:
“He would be terrific. But, I’ll write more about it in the annual report.”
On mortgage rates:
“Buying a house today really makes sense. When you can borrow money at under 4 percent for 30 years and if it’s a good deal for you, you keep it at 30 years and if for some reason rates go lower you refinance and you call it off after 30 minutes, I mean it’s a wonderful deal.”
On Walt Disney CEO Bob Iger:
“Bob Iger is a homerun hitter. I mean he is really, really good. And he’s a great guy on top of that.”
On why he doesn’t own the Walt Disney stock now:
“Well, I made a terrible mistake. We owned a chuck of Cap Cities/ABC and merged with us and we kept the Disney stock for a while and then we sold it. That was before Iger took over. We probably shouldn’t have sold Cap Cities/ABC because ESPN – we owned 80 percent of ESPN and that of course has been the homerun asset of all time.”
On whether he thinks Federal Reserve Chairman Janet Yellen has created bubbles:
“No, well the last asset I would want to buy is a 30 year government bond.”
On whether he would be interested in purchasing a 10 year bond:
“I don’t want a 10-day bond. There is a good chance, who knows what the probability is, but that a 30 year bond, you know, with a 2.5 percent coupon – I mean that bond could sell at 60 very easily you know sometime in the not too distant future.”
On whether he has made any currency bets:
“No, I haven’t. I did some many years ago. We have so many different operations that I can’t tell whether the dollar going up is good or bad for us.”
On oil:
“I have no position in oil. We buy a lot of diesel fuel obviously at the railroad, but no I have no predictions on – really on any commodities. I never made money buying or selling commodities.”
On whether the Keystone Pipeline will eventually pass:
“I think it should. Yeah, I think it should…it disturbs a lot of people in Nebraska and you know I can understand it. I mean if you had a farm and you didn’t want it going through, but that’s always the problem with pipelines…I think by and large Keystone should be done.”
On whether he thinks Russia President Vladimir Putin is dangerous:
“He has a lot tougher economic problems then he did years ago. Apparently, he is very popular and who knows how the Russian people will react to it.”
On whether he sees any bargains in Russia:
“The answer is we do some business in Russia, but we bought some foreign securities and we would like to buy more businesses around the world. We’re probably going to buy a small business in Europe but I’d love to buy big ones.”
On whether the European business he’s eyeing is in Western Europe:
“Yeah, and that’s as far as we’ll go.”
On Berkshire having $60 billion in cash reserve:
“Right. [Always want to have a buffer of $20 billion] Right. $40 billion is excess.”
On whether the small western European company they are looking to purchase will affect their cash reserve:
“That won’t make a dent.”
On how their insurance companies are underwriting any kind of terror for businesses:
“It’s pretty hard to do because you don’t know what limits you need in something like that. I mean you don’t know whether somebody can do many billions of dollars’ worth of damage to you or tens of millions… we have no written – there maybe something I don’t know about. We have not been in the cyber insurance business. I don’t know how to write the polices or evaluated them.”
On Geico CEO Tony Nicely:
“No one has done more for Berkshire Hathaway then Tony Nicely. He is every CEO’s dream. He is the CEO obviously.”
On why he’s still holding onto Moody’s ratings agency:
“It’s a fantastic business – so is S&P incidentally. They are paying a big fine, but S&P is a wonderful business. It takes no capital. It has pricing flexibility. I can’t, if I sell a bond issue, I’ll sell one in another month probably or something like that, I need a Moody’s rating and I need a Standard & Poors rating and I can’t negotiate with them.”
On whether he’d sell any Moody’s shares:
“No, we haven’t for a long time. We’ve got about $2 billion worth.”
On Coca Cola:
“There’s 1.9b 8oz servings of a Coca Cola product in the world today. it’s gone up almost every year since 1886. That’s true there’s more publicity about it in this country. I do not worry about Coca-Cola over time. I am 84, in my adult lifetime, one quarter of all the calories I have consumed have come colas and I am feeling great.”
On whether he’d ever sell Coca-Cola:
“We’ve got $60 billion in cash so were unlikely to need the money. We’ve gone since 1988 and never sold a share. I’ve never sold a share of Berkshire Hathaway myself and never sold a share of Coca-Cola.”
On Bank of America Preferred:
“I got the idea of Bank of America preferred in the bathtub.”
On whether he’ll ever issue a Dividend:
“I cover that in the annual report and I am pretty specific about that. We’re not dug in, we’ll do whatever is the most logical for shareholders…we had a vote last year and by 45-1 the shareholders, hundreds of thousands of them said don’t send us any money. I don’t think there’s a company in the world whose shareholder base would say that, but it was 45-1 against paying a dividend.”
On his support for a possible Hillary Clinton bid for president in 2016:
“I think the probabilities are very high that she’ll run, and if she will run, she will win. 100% [will support her].”
On his thoughts surrounding a potential Jeb Bush run for president:
“I think he’s a fine guy but I am for Hillary.”
On Apple CEO Tim Cook:
“Tim Cook sent me a Christmas card and he said his goal in 2015 was to have me get rid of that flip phone I have…He’s a terrific manager by the way.”
On Berkshire Hathaway being the top 5 most valuable companies in the world:
“We’re working on [being number 1].”
On his favorite columnist:
“The columnist I enjoy the most is Gail Collins. I think she is just terrific. Never better. In addition to being very funny, she’s very smart.”
On how long the Berkshire annual meeting goes on for:
“We are having fun – Charlie Munger my partner and I, Charlie’s only 91 so he’s got a lot of years and together we just have a good time. So, we can do it if nobody can, we have so much fun and this year we will go passed 40,000.”
On letters addressing the next 50 years for Berkshire Hathaway :
“We’ve each written about the past 50 years as well as the next 50 years and we didn’t change a word in terms of what the other guy said in fact Charlie hasn’t seen mine he doesn’t care what I say, I’ve looked at his, but we’re not changing anything and shareholders will get his view and my view.”
On what will be different about the next Berkshire Hathaway annual meeting:
“We’re going to have the exhibition hall where our goods are displayed and sold, I might add, we are going to have that open Friday as well as Saturday so It will increase the time people can spend there and they won’t have to leave the meeting to go out to spend money with us.”
On whether any new CEOs are planning to attend the shareholder meeting this year:
“We’ve got more CEOs coming this year I think just based on what they have told so far…“There’s quite a few and that have not been before.”
On the acquisition of Oriental Trading:
“It’s a wonderful business and has millions of happy customers and we’ve added two new subsidiaries since we bought it that Sam [Taylor] picked out that we bought for cash and we are just starting…Absolutely [want Sam to keep acquiring businesses].”
Video highlights below
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