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CNBC EXCERPTS: BILLIONAIRE INVESTOR WARREN BUFFETT ON CNBC’S “SQUAWK BOX” TODAY

Jennifer Dauble
Monday, 7 May 2012 | 12:39 PM ET

WHEN: TODAY, MONDAY, MAY 7TH

WHERE: CNBC’S “SQUAWK BOX

Following are excerpts from the unofficial transcript of a CNBC interview with billionaire investor Warren Buffett. All references must be sourced to CNBC.

For more information go to: buffettwatch.cnbc.com.

BUFFETT ON EQUITIES

I THINK EQUITIES ARE VERY ATTRACTIVE LONG TERM. OF THEY MAY GET MORE ATTRACTIVE NEXT WEEK OR NEXT MONTH ITS THE SAME THING I SAID IN 2008 BUT EQUITIES PRODUCING BUSINESSES ARE GREAT THINGS TO OWN OVER TIME, AND THEY'VE BEEN GREAT TO OWN FOR SEVERAL HUNDRED YEARS IN THIS COUNTRY, THEY'LL BE GREAT TO OWN FOR THE NEXT HUNDRED YEARS.

BUFFETT ON EUROPE

IF YOU TELL PEOPLE TO TIGHTEN THEIR BELTS AND GIVE THEM A CHANCE TO VOTE ON IT, IT'S THE REAL PROBLEM OF DEALING WITH 17 COUNTRIES, THOUGH. BECAUSE EVEN IF YOU MANAGE TO SELL ONE OR TWO OR THREE COUNTRIES ON THE FACT THAT IT’S ADVISABLE ACTION. YOU NEED 17. AND YOU HAVE A COMMON MONETARY UNIT, YOU NEED COMMON NEED TO HAVE SOMEWHAT COMMON FISCAL POLICIES.

BUFFETT ON THE FUTURE OF EUROPE

10, 20 YEARS FROM NOW, EUROPE WILL BE PRODUCING MORE GOODS PER CAP, EUROPE IS NOT GOING AWAY, IT'S A HUGE MARKET. PEOPLE HAVE LOTS OF SKILLS, FACTORIES, WONDERFUL COMPANIES OVER THERE. SO IT ISN'T LIKE IT'S THE END OF THE WORLD. BUT IT CAN BE ONE VERY MESSY PROCESS IN GETTING FROM HERE TO THERE. BUT WE WILL GET TO THERE

BUFFETT - US ON DIFFERENT PATH

THE UNITED STATES IS ON A DIFFERENT PATH. WE ADDRESSED THE PROBLEMS OF OUR BANKS THREE YEARS AGO VERY DECISIVELY AND PUT LOTS OF CAPITAL IN THEM AND THEY RETAINED LOTS OF CAPITAL AND CLEANED OUT SIGNIFICANT PERCENTAGE OF THEIR BAD LOANS. SO WE HAVE A WHOLE DIFFERENT BANKING SYSTEM IN THE UNITED STATES. PLUS WE HAVE OUR OWN CURRENCY. AND BEING ABLE TO ISSUE ALL OF YOUR DEBT IN YOUR OWN CURRENCY IS JUST AN ENTIRELY DIFFERENT GAME

BUFFETT ON PRINCESS DI

I ONLY MET HER ONE OTHER TIME IT WAS SHORTLY BEFORE HER DEATH AND I WAS AT THE TABLE PUT ME ACROSS THE TABLE AFTER MY PREVIOUS DISASTER BUT SHE WAS SITTING BETWEEN BARRY DILLER AND TEDDY FORSTMANN AFTER SHE DIED A FEW WEEKS LATER ALL THESE PAPERS CALLED AND SAID WHAT DID SHE TALK ABOUT THAT EVENING I DIDN’T TELL THEM BUT I WILL TELL YOU TODAY A COMMENT SHE MADE WHICH IS ABSOLUTELY TRUE AND I CAN SEE BARRY AND TEDDY’S FACES AS SHE SAID IT SHE HAD BEEN TO THE WHITE HOUSE THAT DAY AND SHE SAID BILL CLINTON IS THE SIXIEST MAN ALIVE I DIDN’T ASK HER WHO THE LEAST SEXY GUY ALIVE I WAS AFRAID I MIGHT GET MY PLAY IN THERE

BUFFETT ON 1942

I BOUGHT MY FIRST STOCK IN SPRING OF 1942, I WAS 11, AND AT THAT PT WE WERE LOSING THE WAR IN THE PACIFIC TO THE JAPANESE. IT WOULD BE FUN TO LOOK BACK AT THE HEADLINES OF THE DAY I BOUGHT MY FIRST STOCK. THINGS WERE LOOKING TERRIBLE AND I BOUGHT IN A FEW MOS BEFORE THAT. SO I THINK IT'S A TERRIBLE- THE WORST MISTAKE YOU CAN MAKE IN STOCKS IS TO BUY OR SELL BASED ON CURRENT HEADLINES.

BUFFETT ON THE US ECONOMY BEING BETTER

IT WOULD BE NICER TO SEE GDP GALLOPING AT 4 OR 5%. BUT WE'VE HAD A COMPLETE RECUSITATION OF THE BANKING SYSTEM, IN ALL CASES BUT RESIDENTIAL CONTRUCTION WE'VE HAD THE ECON COME BACK IN A VERY SIGNIFICANT WAY , AND MONTH BY MONTH IT GETS BETTER

BUFFETT ON FACEBOOK

I'M AN AGNOSTIC ON A COMPANY LIKE FACEBOOK. ANYTIME YOU GET A TRULY HAVE AN ORDINARY BUSINESS AND IT'S OBVIOUSLY AN EXTRA ORDINARY BUSINESS, BUT THEY'RE THE HARDEST ONES TO VALUE BECAUSE THE QUESTION IS WHETHER FIVE OR TEN YEARS FROM NOW THAT THEY WILL BE AS EXTRAORDINARY AS THEY ARE NOW OR THEY MAY KEEP DOING MORE AND MORE WONDERFUL THINGS. ITS JUST HARDER TO FIGURE OUT THAN SAY COCA-COLA.

BUFFETT ON IBM VS FACEBOOK

IT'S CERTAINLY A COMPANY THAT ITS FUTURE WILL NOT LOOK AS DIFFERENT FIVE OR TEN YEARS FROM NOW IN MY VIEW THAN IT DOES NOW, THAN WILL HAPPEN WITH A FACEBOOK OR APPLE. IT CAN BE IN EITHER DIRECTION. I WOULD NEVER SHORT THOSE STOCKS. I'M NOT SAYING THEY HAVE ANYTHING BUT BRILLIANT FUTURES, BUT I JUST DON'T KNOW.

BUFFETT ON UNDISCIPLINED BANKS

THE UNDISCIPLINED WAY TO RAISE HUGE AMOUNTS RELATIVE TO CAPITAL IS POTENTIALLY DANGEROUS. AND WE'VE SEEN THAT IN THE PAST. SO YOU DO NOT WANT BANKS TO HAVE A FREE HAND IN DOING LOTS OF THINGS WHERE THERE'S GREAT INTERCONNECTEDNESS AND WHERE DOMINOS CAN GET LINED UP.

BUFFETT ON REGULATION

IT'S HARD TO PICK OUT ONE GROUP AND SAY, AH, THERE'S THE CULPRIT. BUT CERTAINLY THE ABILITIES OF BANKS TO HAVE CIVS- I DIDNT EVEN KNOW WHAT A CIV WAS BEFORE THE TROUBLES BEGAN- AND THAT SORT OF THINGS, ALL KINDS OF THINGS SPRING UP. SO YOU DO NEED INTELLIGENT REGULATION OF BANKS.

BUFFETT ON BANK SIZE

OUR BANKS IN THIS COUNTRY ARE LESS CONCENTRATED THAT MANY OTHER COUNTRIES', INCLUDING CANADA. I DON'T HAVE A PROBLEM WITH THE SIZE OF BANKS. UP NEED CAPITAL COMMENSURATE WITH SIZE AND UP NEED REGULATION, BUT SIZE DID NOT CAUSE THE PROBLEMS.

BUFFETT ON SLOW GROWTH

IF YOU LOOK AT OUR FIVE LARGEST BUSINESSES OUTSIDE OF INSURANCE, THEY LOOK TO ME AT THE PRESENT TIME LIKE THEY'LL ALL SET RECORDS THIS YEAR. AND OUR BUSINESSES ARE GETTING BETTER. THEY'VE ALREADY IN MOST CASES THEYRE QUITE GOOD. THEYRE GETTING BETTER AT A SLOW PACE. THERE'S NOT BEEN ANY NOTICEABLE DECELERATION.

BUFFETT ON THE BUFFETT RULE

IT IS A SMALL IMPROVEMENT IN A VERY BAD TAX SYSTEM. IT DOESN'T CURE ALL, IT DOESN'T CURE ALL REVENUE PROBLEMS EVEN REMOTELY. IN MY ORIGINAL ARTICLE I SAID WE'VE GOT MAJOR PROBLEMS ON THE EXPENDITURE SIDE. ALL IT DOES IS SAYS WHEN YOU'VE GOT 131 OF THE 400 LARGEST INCOMES IN THE COUNTRY THAT ARE AVERAGING 170 MILLION, YOU HAVE A THIRD THINK PAYING AT RATES LESS THAN 15% COUNTING PAYROLL TAXES, THAT IS SOMETHING, THAT SHOULD BE CORRECTED.

BUFFETT ON GOLD

WHEN WE TOOK OVER BERKSHIRE, IT WAS SELLING AT $15 A SHARE AND GOLD WAS $20 AN OZ. GOLD IS NOW $1600, AND B IS NOW $120K. BUT TAKE A BROADER EXAMPLE- IF YOU BUY AN OZ OF GOLD TODAY AND HOLD IT FOR 100 YEARS, YOU CAN COO TO IT AND CARESS IT AND FONDLE IT - AND - 100 YEARS FROM NOW YOU'LL HAVE AN OZ OF GOLD AND IT WON'T HAVE DONE ANYTHING FOR YOU IN BETWEEN.

BUFFETT ON PRODUCTIVE ASSETS

A PRODUCTIVE ASSET OF ANY KIND, A DECENT PRODUCTIVE ASSET, WILL KILL A NON-PRODUCTIVE ASSET OVER TIME. IN ANY GIVEN ONE YEAR PERIOD , 5Y PERIOD , ANY ASSET CAN OUTPERFORM ANOTHER ASSET. I MEAN, TULIPS DID VERY WELL FOR A WHILE!

BUFFETT ON HIS HEALTH

I FEEL TERRIFIC, I'M HERE WITH MY STRAWBERRY SHAKE, AND I'M ENJOYING LIFE. THERE'S ABSOLUTELY NO CHANGE IN MY LIFE. MY ENERGY LEVEL IS 100%. I HAVE NO SYMPTOMS OF ANY KIND. I MEAN… NOTHING HAS CHANGED.

BUFFETT ON THE DEFICIT

WE HAVE LOT OF STIMULUS AND IT'S HELPED THE ECONOMY. DO I THINK WE SHOULD RUN $2 TRILLION DEFICITS INSTEAD OF 1.2 TRILLION? ABSOLUTELY NOT. WE SHOULD START MOVING IN THE OTHER DIRECTION, I THINK WE SHOULD HAVE A WELL THOUGHT OUT PLAN AND IT SHOULD BE VERY CLEAR AND VERY BINDING TO BRING DOWN THOSE DEFICITS OVER TIME. AS LONG AS WE'RE RUNNING A DEFICIT, WE ARE STILL STIMULATING.

BUFFETT ON SUCCESSION

WE WILL SPEND MORE TIME ON SUCCESSION BY ANY OTHER TOPIC BY FAR. WE'RE BLESSED IN THE SENSE THAT WE'VE GOT MULTIPLE CANDIDATES, THEY'RE WITH US, WE KNOW THEM WELL, WE'VE SEEN THEM PERFORM AND IT IS NOT A PROBLEM.

BUFFETT ON WALMART MEXICO

IF THE STORY AS REPORTED IN THE TIMES A FEW WEEKS AGO, I DON'T RECALL EVEY WORD, BUT IT CERTAINLY IMPLIED THAT IT GOT TO THE HIGHER LEVELS OF MANAGEMENT AND THEN GOT BRUSHED ASIDE AND DID NOT GET REPORTED, YOU KNOW, THAT'S A BIG MISTAKE.

BUFFETT ON YAHOO

IF I THOUGHT AS A DIRECTOR, IF I THOUGHT THAT AN OFFICER HAD CONSISTENTLY MISSTATED SOME FACT TO ME, I THINK I WOULD PROBABLY DO SOMETHING ABOUT IT. WE ACTUALLY HAD THAT ONE TIME. IF YOU CAN'T TRUST THE PEOPLE YOU'RE WORKING WITH, YOU'VE GOT A PROBLEM

BUFFETT ON CASH BEING RISKY

CASH IS AS RISKY AN ASSET YOU CAN OWN OVER TIME. YOU'RE NOT TAKING RISK OFF WHEN YOU GO INTO CASH, YOU ARE GOING INTO SOMETHING THAT'S SURE TO DECLINE IN PURCHASING POWER OVER TIME. THAT IS THE BIGGEST RISK-ON TRADE I KNOW, IS TO OWN CASH.

BUFFETT ON P&G

BECKY: LET'S TALK ABOUT SOME OF THE OTHER STOCKS THAT YOU OWN POSITIONS IN. PROCTER & GAMBLE IS ONE OF THOSE STOCKS. RECENTLY IT CUT IT'S FULL YEAR OUTLOOK ABOUT SOME DISAPPOINTING MARKET CONDITIONS IN SOME ARENAS. WHAT DID YOU THINK OF THAT?

BUFFETT: I THINK THEY'VE FOUND THAT THEY'RE HAVING PROBLEMS RAISING PRICES IN CERTAIN AREAS. THEY HAVE LEARNED, I'M PRIVY TO NO SPECIAL INFORMATION ON THIS BUT, CLEARLY THEY HAVE FOUND THEY DID NOT HAVE THE PRICING FLEXIBILITY WITH SEVERAL ITEMS THAT THEY THOUGHT THEY HAD.

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