Warren Buffett On Stocks, Acquisitions, And The Sequester

Berkshire Hathaway B shares Warren BuffettBy Mark Hirschey (Work of Mark Hirschey) [CC BY-SA 2.0], via Wikimedia Commons

Warren Buffett says even though the Dow Jones Industrial Average is close to a new record high, he’s still investing in stocks. He also told CNBC’s Squawk Box that he’s already considering another acquisition, less than a month after acquiring H.J. Heinz Company (NYSE:HNZ).

Warren Buffett On Stocks, Acquisitions, And The Sequester

Warren Buffett said he believes that currently stocks are a better investment than others, calling them “cheap” in comparison to other types of investment, although not “as cheap as they were four years ago.” According to Warren Buffett, his Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) isn’t buying stocks because he expects them to go up in value. He said his firm is buying them because he believes they are “getting good value for them.”

In Warren Buffett’s view, long-term government bonds are “the dumbest investment” at this time.

Buffett also told CNBC that he’s in the process of considering a new acquisition. He didn’t give much indication as far as which company it is, other than to say that it isn’t a consumer products company. However he did say that he would be a buyer of one “at the right price.”

Warren Buffett had said in his annual letter to shareholders on Friday that he was disappointed that he didn’t make any major acquisitions during 2012, although he said 2013 looks to be a better year for acquisitions.

CNBC also asked Buffett about the package of spending cuts referred to as the sequester and whether it will damage the U.S. economy. He said the cuts will reduce the amount by which the government stimulates the economy, although they won’t bring the economy to a jarring halt either.

Buffett believes the sequester may last “for quite a while,” although he wouldn’t be surprised if more spending cuts come about as a result after Americans see the results of the cuts and the differences that can be made in bringing down spending and increasing revenues.

About the Author

Michelle Jones
Michelle Jones was a television news producer for eight years. She produced the morning news programs for the NBC affiliates in Evansville, Indiana and Huntsville, Alabama and spent a short time at the CBS affiliate in Huntsville. She has experience as a writer and public relations expert for a wide variety of businesses. Michelle has been with ValueWalk since 2012 and is now our editor-in-chief. Email her at Mjones@valuewalk.com.