CNBC Transcript: Warren Buffett on 'Fiscal Cliff' and Taxing the Rich
Warren Buffett and his long-time friend Carol Loomis, an editor at Fortune, appeared live on CNBC's "Squawk Box" to promote a book that collects the magazine's past articles about the Omaha billionaire.
During the interview, Buffett said he expects Congress to reach a "fiscal cliff" deal but thinks it could happen after the December 31 deadline.
This is a transcript of the entire appearance on Wednesday, November 28, 2012 at 8a ET.
JOE KERNEN: We have a big line-up this morning. Warren Buffett — last time I saw Warren, he had an ugly tie on, and he sent it to me. He brought—right?
ANDREW ROSS ANDREW: It's true.
JOE: You brought it back—I have it up at my desk. It's an ugly tie. He sent me a brick so far, which is pretty ugly, and a tie. That's it.
BECKY QUICK: Have you thanked him for either of those gifts?
JOE: When I get the NetJet card, I will—I will thank him appro—I will. Thanks, Warren, for the brick. Warren Buffett's going to join us with biographer Carol Loomis in just a minute. Thanks for coming on. We have plenty to talk about with the Oracle of Omaha.
ANDREW: Everything down. Not a great way to start the morning, but a great way to start the morning since we do have Warren Buffett on the show.
BECKY: That's right. And red arrows. You know that Warren Buffett likes to buy when he sees red arrows, so.
ANDREW: That is true. That is true.
BECKY: Warren Buffett, obviously, is a familiar face here on "Squawk Box". He is the subject of a new business biography. He joins us this morning along with Carol Loomis, who is senior editor-at-large at Fortune magazine. Carol's the author of the new book on Mr. Buffett, "Tap Dancing to Work: Warren Buffett on Practically Everything, 1966-2012." And Warren and Carol, thank you both for joining us this morning.
WARREN BUFFETT (Berkshire Hathaway Chairman and CEO): Thanks for having us.
CAROL LOOMIS (Fortune Magazine Senior Editor-At-Large): Great to be here.
BECKY: You know, Carol, you've known Warren Buffett for over 45 years. You have a long friendship and you're somebody who knows probably his take on business better than anybody out in the world. People have been waiting for a book like this...
BECKY: ...but you talk to him every day and in putting this book together, is there anything that you learned or anything that you were able to say, you know, 'This is something I hadn't thought about in a while'?
LOOMIS: Well, first of all, I just learned all over again how good he is. You just see it all through the book. He's—the brilliance and the new ideas that keep coming up. But I think the thing I was most struck by was how consistent his thinking has been as he has gone through these years. In the early part of the book when he is advising Grinnell College about its—how to invest its investments—how to invest its endowment fund, he is staying off to the side while Grinnell decides to invest not—to invest in Intel. Bob Noyce went to Grinnell. And so Grinnell is making an investment in Intel, but Warren is just standing off to the side saying, 'I don't understand semiconductors, so I think you should just go ahead and do whatever you do, but I'm not—I'm not getting into this one way or the other.' And that—and then he's exactly the same when he gets to the bubble. And if we had another bubble, he'd be exactly the same again.
BECKY: Wow. You know, Carol, when you first met him back in 1967, what was your first impression? Did it jump out at the time that he was a great investor?
LOOMIS: Well, my husband had already told me who had met him earlier that he thought he was—he had met the greatest investor in the country. And, you know, I probably was a might skeptical about that at that point. And then I met him with (Buffett's first wife) Susie. We all had lunch in New York. And I realized that Warren was unlike anybody I'd ever met—more impressive than anybody I'd ever met, knew more details about things that I was interested in. And I thought, `No, this guy is really different,' and I must say we bought the stock. So—and he was—he was really virtually unknown at that point.
JOE: Grinnell—who would've thought Grinnell College would be in the news? Did you write a letter to that guy, Warren, or did you give him a dollar a point or $10 a point for those 138 points ? Did you see that? That kid? That was Grinnell.
LOOMIS: Oh, the one that had the basketball.
BUFFETT: The basketball player, yep.
JOE: One hundred and thirty—yeah.
LOOMIS: The big basketball—oh, sure.
JOE: This is the first time we have said Grinnell College twice in the last week and that has got to be—I don't think that has ever...
BECKY: Happened on "Squawk" before?
JOE: Yeah. I would have never imagined that. It's amazing.
BUFFETT: I think he got 70. He had a high percentage of three-pointers, too, I'm right.
JOE: He did. Twenty-one out of 27, but taking 27 three-pointers...
BECKY: Three point shots. Right.
JOE: ...in one game is amazing. Warren, is that—that looks like the tie you sent me. Did you have more than one or something?
BUFFETT: Joe, I have—I have lots of ties to send you, although the sort of plugs they get after I send them to you, I'm not sure I'll keep doing this.
JOE: So that's what I see, bricks and—bricks and ties you don't really like...basically.
BUFFETT: What would—what would you like? Dilly Bars? We've got those. I mean, you name it.
JOE: See, he's asking like he doesn't know what I really want. You know...
LOOMIS: My experience over the years, having known Warren this long, is he gets a favorite tie, he sticks with it for quite a long time.
JOE: It works for him.
LOOMIS: It works for him. So he really doesn't change.
JOE: Carol, I just heard some stuff. Have you—have you ever played—do you play golf with Warren, Carol?
LOOMIS: I have played golf with Warren.
JOE: Did you bring him to Winged Foot? Has he been—that course would kill either the east or the west would kill him.
LOOMIS: Well, I don't think that we have tried out Winged Foot. We have mainly played in Maine at a course called Prouts Neck.
BUFFETT: Yeah. We played on my 50th birthday, though, remember? We had the semi-centennial tournament at Winged Foot.
LOOMIS: Oh, that's right.
BUFFETT: Yeah, George.
LOOMIS: Oh, I did forget—I did forget about that. So and also in Omaha, I've started to play a little bit with him.
JOE: All right.
BECKY: Warren, when you first met Carol, what was your first impression?
BUFFETT: My first impression was that she was pregnant.
LOOMIS: It does stick with you.
JOE: Was she?
ANDREW: I hope she was, right? I mean, that's...
BUFFETT: I had a—I already had an impression. I knew she was a terrific writer. I'd been reading her stuff, and, you know, she was the first—the first woman to become a writer for Fortune, and they made a terrific choice. And ever since then, I mean, she's been the number one read for me in the financial world.
ANDREW: So, Warren, Carol helps edit your annual report or your annual letter to investors . When did that start and what inspired you to do it?
BUFFETT: Well, in 1977, I gave her a copy of the draft and asked her if she would edit it. She's a terrific editor. And I'd been on a committee at the SEC on disclosure, and I really decided that year I was going to step up the communication with shareholders, and so I thought I'd let her take a look at it. And she made very few changes the first year, but she's sort of gotten in the swing of it since.
LOOMIS: It's not—I wouldn't say it's accelerated every year, but there are a few more comments, a few more suggestions.
BUFFETT: She's very diplomatic. When she doesn't like something, she says, 'This is my least favorite part of the report,' which means it's a bunch of junk.