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Warren Buffett to CNBC: Invest in Stocks Even At Dow 9000

Published: Friday, 24 Jul 2009 | 8:36 AM ET

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By: Alex Crippen
Executive Producer

Warren Buffett tells CNBC the economy still isn't showing any signs of life but that doesn't mean investors should stay away from stocks for the long-term.

In a live interview on Squawk Box this morning, Buffett says "business is still flat." But he stresses that doesn't mean he's negative on stocks, predicting the market will revive before the economy does.

COMPLETE CNBC INTERVIEW TRANSCRIPT

"The market is very, very likely to turn up before business. But I don't try and time stocks. I try to price stocks."

He repeats his advice from his "Buy American" op-ed in The New York Times last fall: don't wait to buy stocks until the economy improves. By then, he says, you will have missed the biggest stock gains.

Even with the Dow hitting highs for the year around 9000, Buffett repeats his belief that stocks will outperform cash investments, such as Treasury notes, over the long-term. "I would much rather own equities at 9000 on the Dow than have a long investment in government bonds or a continuously rolling investment in short-term money."

As usual, he points out he is not making any predictions about what the stock market will do in the next coming weeks or months.

Buffett repeats his belief there are "real inflationary possibilities" down the road, due to the massive stimulus being applied to the struggling economy. But he also repeats his view the stimulus is necessary despite the after-effects, because helping the economy recover should be the nation's top priority.

Buffett again endorses Ben Bernanke as Federal Reserve chairman, saying "I don't think you could have anybody better than Bernanke in the job. He understands all the issues."

Buffett's bearish comments today on the economy echo what he's been saying in recent weeks. Earlier this month, Buffett told us consumer sales remained "very, very soft" and about a month ago he said in a live interview on CNBC that he was seeing no "green shoots" on the economy.

RELATED LINKS

Dow 9000: What Does it Mean, and Can It Last?

Buffett declines to comment on Berkshire Hathaway's recent move to sell about 17 percent of its stake in the credit-rating agency Moody's [MCO Loading... () ].

Buffett's live interview was designed to promote a new online animated series called Secret Millionaire's Club in which he voices a cartoon version of himself who helps teach kids about finance and investing.

Current Berkshire stock prices:

Class A: [US;BRK.A Loading... () ]