Buffett Watch

US stock market not in bubble territory, billionaire investor Warren Buffett says

Buffett: Don't make this investment mistake
VIDEO2:1302:13
Buffett: Don't make this investment mistake

Billionaire investor Warren Buffett told CNBC on Monday U.S. stock prices are "on the cheap side" with interest rates at current levels.

The chairman and CEO of Berkshire Hathaway said he put $20 billion into the market since just before the presidential election.

That reflects purchases beyond the most recent reporting period ending Dec. 31.

Buffett also said he's more than doubled his stake in Apple since the new year and before the tech giant reported earnings on Jan. 31.

"We are not in a bubble territory" in the stock market, he said on "Squawk Box." If rates were to spike, however, then the stock market would be more expensive, he added.

After Friday's late comeback, the Dow Jones industrial average ahead of Monday trading was riding an 11-day win streak for the first time since 1992, with 11 record closes in a row for the first time since 1987.

Investors would be very sorry they didn't buy stocks if the 10 year Treasury yield were to stay at around the current 2.3 percent for the next decade, Buffett said. "If interest rates were 7 or 8 percent, then these [stock] prices would look exceptionally high."

The dynamism of the U.S. economy is "unbelievable," he argued, adding there will be ups and downs in growth but "the U.S. always comes back and wins."

Buffett released his closely-watched annual letter on Saturday, writing the U.S. economy would continue its "miraculous" boom.

"The best thing with stocks is to buy them consistently over time," he said, adding investors should spread the risk by owning a diversified set of companies.

"You'd be making a terrible mistake if you stay out of a game you think is going to be very over time because you think you can pick a better time to enter," he argued.