Warren Buffett was interviewed on CNBC on March 2, 2015 from 6 a.m. – 9 a.m. eastern time. These are some of the highlights:
(1) Warren Buffett added to his IBM position in the fourth quarter of 2014 even though its current price of $161 is below his average cost of $170 (purchased in 2011). He prefers that the price goes down so he can buy more at the lower price. IBM,as well, buys back more shares (for a fixed dollar amount) at the lower price.
(2) Buffett sold Exxon Mobil (XOM) in the fourth quarter of 2014 because he had “other uses for the money” (other stocks or deals).
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(3) Both Buffett and one of his portfolio managers (Fortune Magazine: Todd Combs) invested in Deere (DE), which will have a few tough years ahead but will do fine over 10 years.
(4) Investors should not buy stocks because he (or anyone else) does. They should do their own research or buy low cost index funds starting early in life and add over time.
(5) BNSF (railroad) had poor on-time performance in 2014, but improved in the fourth quarter. It is making large capital investments to improve its future performance.
(6) Warren Buffett, Todd Combs, and Ted Weschler evaluate how businesses will do over the next 5, 10, and 20 years. They have lunch once a week and learn from each other.
(7) The economy is improving, with real growth at 2% and population growth at 1%. Housing’s recovery is slower than he expected, but automobile sales are growing faster.
(8) Recommends the earned income tax credit to reduce income inequality. The market sets wages (Wal-Mart’s wage increase)
(9) Expects Hillary Clinton to run and win. Criticized Elizabeth Warren for being angry at people whom she has to work with to get things done.
(10) Thinks Senators Hatch and Wyden can agree on corporate tax reform.
(11) CEO Mary Barra is doing a good job at General Motors.
(12) David Winters should not be criticizing compensation at Coca-Cola when he receives 1 1/2% for consistent underperformance over 5 years or longer.
(13) The Euro Zone should not have a common currency with different governments and fiscal policies.
(14) Banks are doing a good job in the United States and represent a smaller percentage of the economy in the U.S. than elsewhere.
(15) We should have passed the Keystone Pipeline.
(16) The best days for America lie ahead.