Warren Buffett says he does not see a bubble in Facebook. “I’m agnostic on a company like Facebook,” he tells CNBC’s Becky Quick.
Many well-known hedge fund managers are also philanthropists, and many of them have their own foundations. Seth Klarman of Baupost is one of those with his own foundation, and he invested in a handful of hedge funds through his foundation. This list of Klarman's favorite hedge funds is based on the Klarman Family Foundation's 990 Read More
very much. warren, over the weekend, we talked about this and you mentioned that you have spoken with mark zuckerberg will what he needs to be doing with his company. when did you talk to him? last year at sun valley. and what was the basic — did he come to you or did you reach out to him? well, a shareholder or somebody said they would like to get together to talk a bit about facebook. and so we talked. obviously you’ve been in a position of taking a private company public. is that basically what you were talking about? yeah, although i took a private company public when i was in the tech world and berkshire, we never really took public. you’re a public company now. started as a private partnership. sure. when you look at what’s happeng with facebook, i know this is not something you’re a fan of, but you’re also not saying at this point — you wouldn’t buy into it because it’s not something that you feel comfortable with, but you don’t think it’s a bubble scenario. oh, no. i’m an agnostic on a company like facebook. anytime you get a truly have a ordinary business and it’s obviously an extra ordinary business, but they’re the hardest ones to value because the question is whether five or ten years from now that they will bes as extraordinary as they are now or they may keep doing more and more wonderful things. just harder to figure out than say coca-cola. coca-cola ten years from now will be bigger and more profitable in my view than it is now. but there wouldn’t be be some quantum change in either direction. so much easier for me to figure out what coca-cola is worth than google or facebook or you name it. although did you get into technology stocks with ibm. is that a different company? it’s certainly a company that its future will not look as different five or ten years from now in my view than it does now, than will happen with a facebook or apple. it can be in either direction. i woulnever short those stocks. i’m not saying they have anything but brilliant futures, but i just don’t know. so that’s the question is when it’s a fast growing company and a quickly changing arena? just harder to figure. and it’s fascinating to wch, t i don’t have to draw a conclusion on even tens of stocks. i just have to look at one or two and feel that i’ve got a reasonable fix on what those companies will look like in five or ten years. andrew. warren, a question on facebook but technology companies bloodily. a number of the ipos we’ve seen including facebook have dual class shares where the founder in this case mark zuckerberg really does control the company. would he seen with google and zynga and so many others. i’m curious when you think about corporate governance and you think about the dual class shares how does it impact you as an investor and as a ceo how do you think about it? as an investor, it doesn’t change my view much. we’re buying into a nope quantities. when we buy into the washington post company as we did in 1973, the graham family controlled one of the classes of stock. graham oig a let willer and said that was fine with me. there are a few other people if castro controlled it or something, i might have felt different about coming in. but i think if you know what you’re getting in, you can make a decision on that. at berkshire, we have two classes of stock and we have made a careful determination that those two classes have to be treated identically. when you have a situation where the super voting stock can be sold at a big premium about they sell the company to what the diminished shares sell for, i think that’s wrong. i don’t think you should be selling the boat when you sell a coat. and i’ve seen that done. we’ve had it done to us in some situations way back in the past. what about with google? i do think that when you have some extraordinary people running a business where the business is very tied to their particu talents, you may want to protect tell to get a chance to he — but it’s one thing to know what the stock structure is as you buy if to a stock. it’s another thing to have it change once you’re in. my memory, i think dow jones changed it. i think lee enterprises changed it. various companies. probably more the media field than others. a lot of the media companies had a dual structure going in. others created it after the public was in. i think that gets a little more dubious. warren, one of the arguments is that when things are going well, for example right now things at google going relatively well, when everything’s going well, there is no problem. nobody will come after the company or come of a ter the ceo, but it’s actually when there’s trouble that as a shareholder you might want to have more power than you would in one of these circumstances. no? i won’t argue with that, but i would say if you had an extraordinary company back in 1973, cap city broadcasts was a truly extraordinary company. that company in 1973 was selling for a third or less of what it was intrinsically worth even though it was think managed magnificently. so anybody with money at a time like that could have walked in and taken away a great group of assets at a discount from its ininsic value, but a premium to the market value. and that would have been a mistake. i can pick out examples the other way, too. it’s not like i’m a big fan of dual classes, but i can see some reasons for them. while we’re on the topic of some of the other companies take are in the news right now, can i ask you about yahoo! too? there is news about its ceo that he did not in fact have a degree in computer science. and now dan lobe and another investor who i think owns a little over 3% of the stock are pushing for his ouster. what do you think about what happened and the company’s announcement that this was an inadvertent error? i don’t know all the facts, but just from the few sentences i read, it doesn’t sound like an inadvertent error. if i thought as a director, if i thought that an officer had consistently misstated some fact to me, i think i would probably do ly had that one time and about you can’t rust the people you’re working with, you’ve got a are problem.