Warren Buffett CNBC Interview All Videos

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person will get six questions. and we now have that personbecause i said it had to be a credentialed bear, preferably one who was short the stock. doug kass is certainly a credentialed investor and he said he’s short the stock and he’d like to do it.doug, you’re on. does he know this? no, he just knows this now. joe, doug actually wrote in on fridayr saturday after hewrote the note and we kind of forwarded that on. dog if you’re watching this morning, you’re in buddy. think of tough questions. see if you can drive the stock down 10%. why? so you can buy back more shares? yeah, that would be okay. let’s talk about some other areas of things that you really brought up in the annual meeting. you talked about accounting. a long section on accounting. and you admitted that at the end you’d be putting down the dentist’s drill. why did you get into accountingthis time around? well accounting, i’ve done it before, too, accounting is a language of investment in business. and to some extent, it’s not well explained in certain cases, and sometimes people draw the wrong conclusions. so i like to stick in a little essay occasionally on where i think accounting falls short and how an investor or a business person has to think differently about it in going strictly by gap accounting. and when i have an example that fits that, i’ll write about it. i know that isn’t of interest to all of the shards. there’s plenty of people that skip over that part but i also think it’s important that peopleunderstand it. we have some peculiarities in our own accounting and i want the shareholders to understand that. the thing that brought it up this time around was the purchase of additional shares of marmon? we had a situation where weactually we bought originally 64% of marmon, then we boughtsome more. and we had to immediately write it down. if we’d just bought that amount by itself we wouldn’t have had to write it down. but because there was a transition between two rules we had to charge off $700 million immediately upon the purchase of something that did not shrink in value $700 million. and we want to explain that. i would want that explained to me if i was a shareholder and my management did it. i want the facts to be there, and admittedly, get kind of tough sledding there for awhile for some people, but it’s there, it’s there to explain what goes on. we get int in terms of amortization of intangibles, and in the end, i, you know, i’ve got two very smart sisters that have most of their money in berkshire and i want them to understand things,nd that affect the value of it, and i’mtalking with them. okay. warren, if, if you were to look around, question we got again and again, and i know we’ve talked about this a little bit, but for people who are just tuning in, there have been people who have been writing in who want to know if you look at the s&p 500 right now do you think that stocks areundervalued or overvalued? well i think they’re undervalued relative to other assets. in other words if i had a lot of money today i would rather own beingties than own fixed dollars, long-term government bonds, junk bonds, farmland, you know, reits, they will be affected, if interest rates go up dramatically, all assets will go down in value. interest rates, to investments are like graphty is, you know, basically to physics. everything goes along with interest rates. but the cheaps thing around — i wrote that about a year ago. i’ve been writing it for year after year.they’re not as cheap as toy were four years ago. but you get more for your money and that’s why we like buying businesses and like buying stocks. you get more for your money there than you will get the one thing that the dumbest investment you know, in my view, is a long-term government bond. single family shows a good investment for people where it fits their living pattern and what they’re going to do, i think. and you can finance it extraordinarily favorably, and i think that makes sense for people. okay, great.

welcome back again, everyone. we are here this morning with burke share hathaway chairman and ceo warren buffett. we’re live in la vista, nebraska, just outside of omaha at the warehouse of oriental trading, and warren, i wanted to ask you a question that comes from andrew. he’s on assignment today but he’s been speaking with a lot of private equity people this morning and they had a question that they wanted to pass on to you. he said that over the years you’ve been critical of private equity and the dangers of adding leverage to companies. your partner in the heinz transaction 3g is a private equity firm and includes considerable leverage. have you changed your views on private equity and would you consider partnering with other firms like kkr in the future? it is a partnership. it’s a permanent partnership. we will not

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