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During his live "Ask Warren" appearance on CNBC's Squawk Box this morning, Warren Buffett recounted a telephone call he got from the late Apple CEO Steve Jobs a couple of years ago:

"It was an interesting conversation because I hadn't talked to him in a long time.  He said, 'We've got all this cash.  What should we do with it?'  So we went over the alternatives.  It was kind of interesting."

Buffett told Becky Quick that there are only four things you can do with cash: stocks buybacks, dividends, acquisitions, or "sitting with it."

"I went through the logic of each thing.  He told me they would not have the chance to make big acquisitions that would require lots of money... And then I asked him the question, I said .. 'I would use it for buybacks if I thought my stock was undervalued.'  And I said, 'How do you feel about that?'  The stock was 200-

and-something.  He said, 'I think my stock is very undervalued.'  I said, 'Well, what better to do with your money?'  And then we talked awhile.  And, he didn't do anything, and of course, he didn't want to do anything.  He just liked having the cash.  It was very interesting to me because I later learned that he said I agreed with him to do nothing with the cash.  (Laughs.)  He didn't want to repurchase stock although he absolutely felt his stock was significantly underpriced at two-hundred and whatever it was then."

Buffett is a notoriously tech-adverse investor but he admits he wishes he had bought Apple's stock back then.

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