This is part five of the transcript and video of Warren Buffett's 'Ask Warren' appearance on CNBC's Squawk Box on Monday, March 1, 2010.Topics include: Buffett's view on Kraft's acquisition of Cadbury, global warming, Goldman Sachs, Moody's, and Greece's debt problem.

CLICK HERE FOR PART FOUR

KERNEN: Welcome back to SQUAWK BOX. Still to come in the next hour, PepsiCo CEO Indra Nooyi, that's coming up at 8:10. Let's get back to Omaha, that's where we find our very own Becky Quick with Warren Buffett.  Beck, I was thinking about Matt Rose and Burlington and using stock and Warren with Kraft and Cadbury and I love to get him talking about that, to try to figure out why stock was a good idea for Burlington, that it wasn't a good idea for Kraft and I love it when you say you don't like that deal, even though you love management. Go into that again. What was the difference between Kraft using stock and you using stock, other than maybe valuation on the company being acquired?

BUFFETT: Yeah, well, we hate using stock. No question about it, Joe.  And because we already owned some Burlington beforehand, it turned it we had to use about 30 percent stock and as I put in the annual report, even though the Burlington holders were getting $100 a share, we felt it cost us more than that because we thought our stock at the time we made the deal was somewhat underpriced. We'd have done all cash if I'd felt comfortable in terms of our balance sheet, using all cash. But I never want to put us in a position where we've--we're stretched in the least. So to make the deal, I had to do it.  And I came to the conclusion that using 30 percent stock, which was about 6 percent of all the shares we had outstanding, still left us with a deal that made sense. But if it had to have been all stock or 50 percent stock, we couldn't have done it and if I'd had enough cash around to do it, so I could've done it all cash, I would've liked it better.

KERNEN: How about Kraft? You warming up to that finally? Or are you still--you still don't like it. You don't get to vote, I guess, do you?

BUFFETT: No, we didn't get to vote. And it wasn't just--it wasn't just the stock that was being used, although that was a terrible currency to use, just as our own stock is a terrible currency to use. But it wasn't just the stock, it was the price being paid and it was the fact that the pizza business was sold in a very tax inefficient manner to partly fund the purchase.  And it just--in the end, I felt poor after the deal was made. But I, you know, I wish Irene the best on executing well on it and I hope it works out. We'll be a lot better off financially if it does, but I wouldn't have done it.

QUICK: Warren, that question that Joe raised is one that we got from a lot of viewers, too. In fact, Todd in Parker, Colorado, wrote in and said, "In your annual report, you say that you'll consider issuing stock when we receive as much in intrinsic business value as we give up. When exchanging Berkshire shares for Burlington Northern, did Berkshire shareholders receive less, equal or more in intrinsic value?"

BUFFETT: Well, we felt, Charlie and I, felt that we received as much or a tiny bit more in intrinsic value as we gave up. But we factored into that some other things I mentioned in the annual report. Namely, that putting $22 billion of cash to work made good sense for us in this business and that the opportunities over the next 40 or 50 years to keep putting more and more cash at reasonable returns in, just like we do in our utility business, also was an attractive opportunity. We're going to generate lots of cash over the years and we don't always have great places to put that. This offers one vehicle where we can put it at decent rates of return. Not great rates of return, but decent rates of return.

QUICK: Carl.

QUINTANILLA: Warren, you go--we know this is--you're passionate about this from the letter, you go into a long hypothetical about company A buying company B whose stock is undervalued. You say that CEOs long on confidence and short on smarts, wants to buy company B for the prestige and maybe the compensation. Is that a--is that a veiled slight at Rosenfeld?

BUFFETT: No, it's 50 years of being in board rooms and just seeing what happens. And you know, Keynes talked about--probably the best--the best chapters written on investing were chapters eight and 20 in "The Intelligent Investor" for individual investing. The best chapter ever written in sort of describing how the world works in markets is chapter 12 of "The General Theory" written by Keynes and in it he talks about animal spirits and what causes people to do the deals and all of that. It's a marvelous chapter. And I'm not sure that he had Kraft in mind, but he had a lot of the companies that I've experienced over the years in mind. It's a very normal thing. I mean, you know, everything looks--everything looks rosy, you know, when you first are looking at a deal. You don't see the downsides. You don't see the execution problems, you don't see the people who are going to leave. You don't see--you don't see all kinds of things. And I'm guilty of that, too, incidentally. I've made some dumb deals in my life and I'll make some more dumb deals and animal spirits will enter into those dumb deals. I guarantee you that. I just try to keep them under control and if I don't, I count on Charlie to keep me under control.

QUICK: You know, there was a viewer who wrote in and I can't find the question right now, but there was a viewer who wrote in and said do you ever have buyer's remorse when you get through a deal?

BUFFETT: I never have buyer's remorse immediately after a deal because I--the facts look the same to me the day after than they did the day before.  But I've made big mistakes on deals. I mean, I laid out one for example, Dexter Shoe in the report. I mean, I've made lots of mistakes and that's the nature of making a lot of decisions. You've got to make sure that the mistakes don't kill you and you hope the big ones work out. But I never--I've never bought something and felt terrible the next day. That doesn't--or the next week.

QUICK: So you're not like some of us normal human beings out there.

BUFFETT: No, when I do something, I feel good about it.

QUICK: OK. We got a lot of questions from viewers regarding your investments, as well, and one came in from Aly Dya in Vancouver, British Columbia. `Would you still buy Goldman Sachs stock even with all the problems they face politically?'

BUFFETT: Well, I would buy the instrument we bought. We bought a $5 billion issue of preferred with 5 billion, roughly, of warrants attached. And I hadn't been--I had not been a buyer of Goldman stock--Goldman Sachs common stock, you know, a month before, six months before and--but I would buy the instrument we bought under the circumstances we bought it, yeah. And I think that it's--I think that the company has very good prospects. But I bought very few investment banking or brokerage stocks over the years. This was a situation where they needed money and validation that day and we were the only ones around, you know, with that kind of money, and so it was an opportunity to buy on favorable terms. Those favorable terms were justified in that--in the chaos that was going on, but I can't buy it today under those conditions.

QUICK: The question maybe points to this idea that Goldman Sachs is now blamed for every single problem that exists out there, including Greece, potentially defaulting at this point.

BUFFETT: Oh, yeah, no, no. It's...

QUICK: Would you still, given the political backlash, buy into this company, own stock, be associated with it and do you think it's a fair rap?

BUFFETT: Yeah. No, no, you're right. I mean, they're going to rewrite Genesis and have Goldman Sachs offering the apple, I mean, pretty soon. But no, I feel--I feel good about their business prospects. I mean, it is a--it's a very, very strong, well-run business. It's got a place in the universe and there are fewer big investment banks around than there were a few years ago worldwide, you know, they--when we did the Burlington Northern deal, they were called in for an advisory opinion and they got a $35 million fee. I don't like that. But they have that sort of market position and it's a terrific--it's just like Coca-Cola has a terrific market position. Goldman Sachs has a very strong market position. Lloyd Blankfein, you cannot find a better manager.

QUICK: All right. There's another question that came in from Steve in Charlotte, North Carolina.

BUFFETT: Mm-hmm.

QUICK: Touches on this same issue but says he's a Berkshire shareholder and is concerned about its ownership positions in Goldman Sachs and Moody's. "It seems that both of these two companies share a lot of the blame for the problems we've had over the last few years. What are you telling the management of these companies and how are you holding them accountable?"

BUFFETT: Yeah. I don't tell the management anything. I never have.  We've owned stocks for--you know, I bought my first stock when I was 11. I, you know, I can't recall telling management, unless I've been a director of the company, very much about any of them. That would be like marrying somebody to change them. It's really not a very good idea. You know, and--but it's--we own stock in Costco, you know.

QUICK: Mm-hmm.

BUFFETT: Costco sells cigarettes. Cigarettes, you know, I'm not sure are good for people. I'm not telling them not to sell cigarettes. You know, it's--I'm not telling Walmart not to sell cigarettes or I'm not--there's--every company probably has something that if you were running it, you might feel a little differently about, but there's no question in my mind, Goldman Sachs is a first class, you know, operation. Moody's, you know, the rating agencies, I've said over the years, that we don't follow the ratings of the ratings agencies. I don't think--I think people should make their own judgments about credit quality and we've always done that. And frankly, we like it if we think something's misrated because that's--just like we like it when we think something's mispriced and--but we--I don't think I've ever--I've never been in Moody's. I've never--I've never--they've been out here once or twice when the investor relations people were around, but I don't pay any attention to that anyway. So we have nothing to do with running those companies, you see. You'll see--you'll see on our--on our list of investments, you know, 15 or 20 companies, but we don't buy them to change them. And if I want to--if I want to become a director of some company, then I--then I--then I might have a voice in them.

QUICK: And maybe you talk with your feet, like you've been selling shares in Moody's?

BUFFETT: Well, we--it's a matter of record we've sold shares in Moody's, right.

QUICK: So is that your way of doing things? Either you sit by passively...

BUFFETT: No...

QUICK: ...get involved on the board or?

BUFFETT: ...we sell companies when we think they're fully priced, when we think that there's better uses for the money elsewhere. We've sold a lot of stocks in the last year.

QUICK: Mm-hmm.

BUFFETT: The first part of the year we sold it to buy--we had a commitment to buy three billion of Dow Chemical and a couple of billion in Swiss--or a billion in Swiss REI later in the year. When once I made the deal to buy Burlington, you know, I was going to have to come up with some money and I wanted to have a lot of money left over after I came up with the money.  So I'm always--I'm always--I want to--I want to operate from a position of strength. So we will share things that I still like to do things--if it's going to leave me a little bit barren on cash.

QUICK: Things like Proctor & Gamble and Johnson & Johnson.

BUFFETT: Yeah, yeah.

QUICK: That you pointed out in the letter.

BUFFETT: Those are great companies. I don't, you know, anybody who owns Proctor & Gamble or Johnson & Johnson is going to hold them for 10 years, in my view is going to make a bit of money. And on the other hand, we had to come up with 8 billion of cash. We had to borrow another 8 billion to do Burlington and I wanted to end with 20 billion in cash.

QUICK: OK. Another shareholder writes in, or I'm not sure if this is a shareholder or a viewer, but Larry from Mount Prospect, Illinois, says, "Normally, you're a long-term holder. Yet you bought Exxon in the third quarter of 2009, and sold it the following quarter. Why did you change your mind so quick?" And several other shareholders wanted to know if it had to do with the XTO deal.