Warren Buffett Reassures Shareholders on Cancer and Succession
By: Alex Crippen | Executive Producer
Buffett, however, says he's still ready to make a $20 billion deal if he can find the right one. And next year, if he doesn't done a big deal, he'll be saying he's ready to make a $30 billion purchase if he likes it. But, as always, he says he won't let Berkshire's cash drop below a minimum comfort level, currently in the area of $20 billion.
Google and Apple
Responding to a shareholder's question on whether Google or Apple will be "inevitable" winners in the long run due to their competitive advantages, Buffett said he wouldn't be surprised if the two stocks were "worth a lot more" in ten years but he doesn't know enough about them and future technology developments for him to buy shares.
He sees Berkshire's decision to buy a massive stake in IBM as a much safer bet, but he wouldn't sell Google or Apple short either.
Buffett on Banks
Buffett says the U.S. banking system is in "fine shape," giving a lot of the credit to Washington for forcing some banks to raise capital during the crisis when they didn't want to. He acknowledged that shareholders might not have liked it, but he thinks society as a whole benefited.
Buffett is not as optimistic on European banks, saying they were "gasping for air" just a few months ago before the European Central Bank took action. "I would put European banks and American banks in two very different categories."
Asked why he revealed in a CNBC interview that he had bought shares of JP Morgan for his own account and not for Berkshire, Buffett replied that "all my best ideas are in Berkshire" and pointed out that he likes Wells Fargo even better, in part because it is easier to understand, and has bought a lot of that stock for the company's portfolio.
Buffett Rule and Berkshire Stock
A shareholder question suggested that Buffett is discouraging some people from buying or holding Berkshire shares because they don't agree with his support of the "Buffett Rule" that would raise taxes on some very wealthy Americans.
The question got some applause, suggesting some in the crowd agreed that Buffett should keep his politics to himself.
His response, however, that neither he nor Charlie are willing to put their "citizenship in a trust," was also applauded.
As for the questioner's 84-year-old father who doesn't want Berkshire stock due to Buffett's tax views, Buffett suggested that he might feel more comfortable owning shares of "Fox."
Buffett and Gold
After one shareholder pointedly noted that gold had outperformed Berkshire's stock recently and questioned why Buffett has avoid the metal, Buffett replied that if you go all the way back to when he first started running Berkshire the stock was at $15 and gold was at $20. Now, gold is at $1600, but Berkshire is at $120,000.
Buffett says he finds that many gold supporters are more emotional than rational about the metal and don't like it when he criticizes it as an investment that doesn't generate any real wealth.
Wal-Mart's Bribery Problem
In light of Berkshire's $2.3 billion stake in Wal-Mart, Buffett was asked about allegations the retailer bribed Mexican officials and then moved to bury an internal investigation. Buffett replied that he doesn't think Wal-Mart's "fundamental dynamic" has been changed and doubts there will be any long-term impact on its earnings power.
After Munger noted that when you're as big as Wal-Mart you're going to have an "occaisional glitch," Buffett agreed and acknowledged that someone, somewhere in Berkshire, might also be breaking some rules. The important thing, he says, is to find and stop wrongdoing and make it clear it won't be tolerated.
Current Berkshire stock prices:
Class B:
Class A:
Keep up with Warren Buffett on CNBC.com and follow alexcrippen on Twitter.
Email comments to buffettwatch@cnbc.com
