Warren Buffett On CNBC: Stocks Still More More Attractive Than Bonds

Updated on

CNBC’s Warren Edward Buffett, Berkshire Hathaway chairman and CEO, joins CNBC’s Becky Quick on his 88th birthday for an interivew – see excerpts from the video and transcript below.

Get The Full Warren Buffett Series in PDF

Get the entire 10-part series on Warren Buffett in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues

Q2 hedge fund letters, conference, scoops etc

H/T Value Investing World

Warren Edward Buffett: Stocks More Attractive Than Bonds


We'll talk about whatever they'd like to argue about and for as long as they want to talk. And so any subject they want to get into except what I'm buying currently. I love talking about what they what they want to part of us.

Is it common to be asked for a stop to stop sticks stock pandas and these lunches.

No actually it isn't. I can't recall ever being asked but we talked about family. Actually. The. Couple that water fish are bringing along two small children. We don't buy the children raising raising kids. A lot of things. It's not it's not all soccer or business or finance at all.

Well let me be the skunk at the garden party and start asking about some of those things you are joining us on a day when we have watched the stock market continue to set new highs. The S&P the Russell and the Nasdaq. The Dow is not far off and the question we always ask is just stocks look expensive to you at these prices.

They are definitely. You had your choice between buying and holding a 30 year bond for 30 years or holding a basket of American stocks. There's just no question you're going to do better owning stocks. So. It's. More attractive and considerably more attractive than fixed income securities. That doesn't mean they're going to go up or down the borrower next week or next year but over time a bunch of businesses that are earning high returns on capital are going to be a bond that's fixed it. Roughly 3 percent for 30 years. And I stopped my them specially. But. But. Actually they look stocks generally which are their businesses they're American businesses 30 trillion worth of them and they look cheaper than the generally real estate.

Buffett: Stocks driven by companies reinvesting


Well that's what you have to do in investing. I mean if you're sitting with some cash in your bag you've had savings. And the question is What do you do with it. You can buy a duplex next door and run it. Other people will do fine over time. You can you can buy a small piece of farmland or something like that was ordered or you can put it into something fixed income bonds or. Bank deposits or whatever it may be. And. Stocks if you look at American equities. American businesses are earning a lot of money relative to the capital put in. And. The reason stocks are worth a whole lot more than they were 20 years ago or 50 years ago or 100 years ago is companies have plowed back part of the earnings with them on to get it all out of interest. You know you get your 3 percent or whatever it is and that's what you have with stocks you get a maybe a 3 percent dividend but they're pulling money back with repurchasing shares or doing something. And. Over time that just makes a huge difference.

And the reason I ask about stocks setting at these new highs and whether you think the market is expensive as it is because there are retail investors who are sitting at home and when Nightly News starts talking about how the markets are new highs some of these retail investors have been sitting on the sidelines think oh my gosh I missed my opportunity again. The last time we talked you said you were still buying stocks are you still right now were buying stocks this morning and I'd rather buy cheaper but I've been buying stocks since March 11th 1942.

And I really bought it under every president. Seven Republicans seven Democrats I've bought a quarter after quarter some of the buys were terrific some aboard and such good times. And I don't know when to buy stocks but I know whether to buy stocks. And that. Assuming you're going to hold them would you rather own. An interest in a variety of great businesses than have a piece of paper that is going to pay 40 percent of 30 years or short term deposit that Beijing may be 2% or some sort.

Buffett: I have better things to do than tweet


I just don't see any reason. Why.

I put on a report. I do not have a daily view on all kinds of things. And. Maybe you have got a guy who does it. In this copycat or imitator or maybe he's putting out better stuff and I wonder if. If you put it up good advice I'll take credit for it.

We have seen some CEOs who liked to tweet very frequently including Iran. Musk Yeah he's certainly somebody who's tweeting a lot when you think about people who do tweet. I don't think it has helped. No. I think it's pretty well be particularly dangerous to.

Start commenting on Bircher daily which I never would do it with you. But. No. I. Just think there's other things in life than tweet me. I'm not that desperate for somebody to hear my opinion.

Warren Buffett: Apple Makes Its Products Indispensable


We are just a little about 6 million of the shares. Are attributable to another fellow in the office that owned it.

For a considerable period of time. The rest are in my portfolio. But I bought just a little bit. I like I like to buy them cheaper. I mean very different. We started buying or I started buying when the stock was maybe 100 when I was buying it kind of as fast as I could. And I ended up buying some as high. There are a whole lot higher. I would name the exact price but a whole lot higher. That. I'd rather have it the Dow. For one thing if it goes down. Apple's going to buy a lot of stock back. They're already buying stock back and if it goes down. 10 percent. It means they get about 10 percent more shares and my interest will go up 10 percent or for spending that money in buying shares. I am benefited by that going down. If I were to talk my book I would talk it down.

I spoke with an analyst at aging monster and he pointed out that the interesting thing about Apple is that for a long time it was a very volatile stock and kind of traded in this boom and bust cycle every time they had a phone that came out it would push the stock higher. They didn't have a new release him in drop. He said that it's still 65 percent of the business but a lot of people are maybe looking at it a little differently and he wonders how you look at it is this a boom and bust cycle or is there something Gonder he's done. I don't know I'd like to see the new release do well or you know that. But.

I do not focus on the sales in the quarter or the next year. I focus on them. They will tell you exactly how many hundreds and hundreds and hundreds of millions of people who practically live their lives by it. And. If you look at that little. Piece of whatever it is. You. That is something that is valuable real estate in the world. I mean that is. The. Fifth Fifth Avenue will never come close to that. I mean it is. You've got. You've got hundreds and hundreds of millions of people with loads of buying power at able to do business or learn information or whatever it may be. And they. And. It's part of their habit of believing. I mean they spend hours a day and it does all kinds of things for them so. That. That real estate is worth a fortune. And it's nice to have it added to as they sell new phones and of course a lot of her replacement phones but. They're adding. To the hundreds and hundreds of millions of consumers that are never going to get the first word. There never. It. And. You are an indispensable part of our lives.

It's it's an extraordinary product so you don't even look at it like a tech analyst or like a tech company for that matter. I look at IBM and it just in terms of how you value this all. Well actually they've got to keep having the product. That. Those. Huge. Clientele.

Regards as indispensable. So it's got to be the best thing. That. They can toast the one. When their planes will arrive or you know whatever it may be. What the weather will be what stocks are doing. You know a million play games whatever it may be. And that's important that their replacement products are looked at as super desirable. But one of the things that. I do to understand. Is we have a very large retailing operation Brussell furniture art. And. People who went in to buy. The latest iPhone or whatever it might be. But for some reason we didn't have it. You can sell them anything else. Every day there was a door which we didn't want them to look where they they came back. But I mean it was it wasn't an alternative. And. When you have a product. That has that personal that valuable. And you know they talked about the iPhone 10 costing a thousand dollars and that a lot of them might. Have a plane that. Costs. Me. A lot. Are you a million dollars a year or something. Ah. If I used. The iPhone. I use an iPad a lot. If I use the iPhone like all my friends do. I would rather give up the plane. Which is a million are going to have here for something close to a thousand bucks. The iPhone was enormously underpriced. Now it's got competition so you can't push the price. But in terms of its utility that people and what they get for a thousand dollars someplace else. You know you don't have a dinner party to. Push. That. And here's this is what it does for you. It's incredible.

Buffett: Campbell won't get significant premium for assets

Buffett: Tariffs have increased some costs for us

Buffett: Jay Powell a terrific Fed chairman

Leave a Comment