Investing Warren Buffett Watch

  Monday, 27 Feb 2017 | 11:02 AM ET

Warren Buffett talks up stocks and his big Apple stake while bashing bonds and hedge funds

  Monday, 27 Feb 2017 | 9:24 AM ET

Why anyone would buy a 30-year bond 'absolutely baffles me,' Warren Buffett says

Billionaire investor Warren Buffett told CNBC he can't see any reason for investors to buy 30-year bonds right now.

"It absolutely baffles me who buys a 30-year bond, the chairman and CEO of Berkshire Hathaway said on "Squawk Box" on Monday. "I just don't understand it."

"The idea of committing your money at roughly 3 percent for 30 years ... doesn't make any sense to me," he added.

Buffett said he wants his money in companies, not Treasurys — making the case throughout CNBC's three-hour interview that he sees stocks outperforming fixed income.

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  Monday, 27 Feb 2017 | 9:37 AM ET

Hedge funds' 'obscene' fees make people rich — just not investors, says Buffett

The "2 and 20" fee system that hedge funds use to charge their clients is overpriced and "borders on obscene," billionaire investor Warren Buffett, chairman and CEO of Berkshire Hathaway, said Monday.

"Two and 20 is going to make a lot of people rich, and it's going to make very few investors rich," Buffett told CNBC, calling the charges "ridiculous."

Buffett made the statement in reference to the fee structure normally charged by hedge fund managers, whereby they take 2 percent of a client's assets and 20 percent of the client's total returns.

"You don't get better because you charge a lot. That does not make you a better judge of securities or anything like that," the legendary investor said.

Buffett spoke to CNBC's "Squawk Box" at length Monday morning.

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  Monday, 27 Feb 2017 | 9:20 AM ET

Warren Buffett names the only 2 newspapers that have an 'assured future'

Posted ByFred Imbert

Warren Buffett thinks only two newspapers are certain to survive the industry's hugely difficult climate: The Wall Street Journal and The New York Times.

The chairman and CEO of Berkshire Hathaway told CNBC's "Squawk Box" on Monday the Times and the Journal have an "assured future" because of their proven internet model. "They have developed an online presence that people will pay for."

"If you look, there are 1,300 daily newspapers left in the United States. (Berkshire Hathaway has) 31 of them. There were 1,700 or 1,800 not too long ago," Buffett said. "Now, you've got the internet. Aside from the ones I mentioned, 1,400 or 1,300 of them haven't figured out a way to make the digital model complement the print model."

Buffett also said The Washington Post — which is owned by Amazon CEO Jeff Bezos — may have a chance to survive.

The Post and the Times — along with most other mainstream media outlets — are common targets of President Donald Trump, who repeatedly can't resist lashing out at their coverage.

Correction: This story was revised to correct that Buffett said The New York Times and The Wall Street Journal are the only newspapers "assured" to survive the industry's difficult climate.

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  Monday, 27 Feb 2017 | 9:01 AM ET

Warren Buffett on the one stock that he 'missed big time'

Billionaire investor Warren Buffett told CNBC he really missed the boat on Amazon.

While long admiring Amazon founder Jeff Bezos, Buffett said on "Squawk Box" that "I don't have a good answer" for not investing in the e-commerce giant.

"Obviously, I should have bought it long ago," the Berkshire Hathaway chief reflected. "I didn't understand the power of the model."

"It's one I missed big time," he said. "Retailing is tough for me to figure out" because the internet has swept in and offered shoppers variety and low prices at their finger tips.

Bezos is a "terrific business person," Buffett said, marveling at how Amazon's founder could have thought about taking over the world by "selling books online."

Of course, Amazon now sells practically everything over the internet, while also getting into other businesses such as cloud computing and video production.

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  Monday, 27 Feb 2017 | 8:14 AM ET

Buffett has an interesting theory about why self-driving cars will hurt the insurance industry

The self-driving car business could become a major threat to insurance companies when the technology hits the market, billionaire investor Warren Buffett told CNBC's "Squawk Box" on Monday.

If autonomous vehicles prove to be safer than regular cars, insurance costs will plummet, and by the time roads are filled with self-driving cars, insurers like Geico will have taken a serious hit, the Berkshire Hathaway chief said. Berkshire Hathaway Homestate Companies offers commercial auto insurance.

"If they're safer, there's less in the way of insurance costs, [and] that brings down premium buy significantly," the investment guru said.

But disrupting an entire industry takes time, and the market will embrace self-driving cars slowly despite the immense amount of capital that tech companies are spending on their development, Buffett said.

"If I had to take the over and under [bet] 10 years from now on whether 10 percent of the cars on the road would be self-driving, I would take the under, but I could very easily be wrong," he said.

"It's something that billions and billions and billions are spent on, and brains are being involved in it, so it could easily come sooner than I think. And it will be negative for auto insurers," he continued.

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  Monday, 27 Feb 2017 | 7:37 AM ET

Buffett: 'It's going to be very, very tough' for Republicans to pass revolutionary tax reform

Republicans will likely have trouble passing comprehensive, complex tax reform by August, billionaire investor Warren Buffett told CNBC on Monday.

Buffett said getting tax reform done quickly will be a bigger priority than delivering a significant overhaul of the tax system.

"I think they will end up going for something not as dramatic as they might even like to do because they simply don't want to spend the time and the political capital getting it done," the chairman and CEO of Berkshire Hathaway said on CNBC's " "Squawk Box."

A proposed "border adjusted tax," which has been proposed by Republicans in the House, would tax imports. The White House and GOP leaders have separately called for a sharp reduction in corporate taxes and lower personal taxes.

"You've got some master legislators in [Senate Majority Leader Mitch] McConnell and [House Speaker Paul] Ryan that will be handling things so as to get as much as possible of what they would like through," Buffett said. "But I think if you're trying for speed and you're trying for complexity, I think complexity will give way to speed."

President Donald Trump's administration has been working with House Republicans to put forth a tax reform proposal that doesn't make the budget deficit jump, using their own dynamic scoring to reflect the reform's economic effects that would make it worthwhile.

"If you want to be revenue-neutral without the craziest dynamic scoring in the world ... it's going to be very, very tough," said Buffett, who supported Hillary Clinton in the 2016 election.

As a result, the reform they actually put forth could be much simpler than a Reaganesque revamp of the tax code, Buffett contended.

"I just have a feeling when the Treasury secretary says we're trying to have this by August or something, you're not going to get a really 1986-type overhaul or a 1954-type overhaul or a 1969-type overhaul in that kind of a time period," the investment guru said.

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  Monday, 27 Feb 2017 | 8:09 AM ET

Warren Buffett: I'll judge Trump by how he handles the No. 1 threat to US security

Billionaire investor Warren Buffett told CNBC on Monday he would judge President Donald Trump after four years, first and foremost, by how safe the U.S. has been kept.

"That is the No. 1 job of the chief executive of the United States," he said. "And that's not an easy job."

Buffett said on "Squawk Box" his top concern is how to prevent rogue nations from getting weapons of mass destruction, and he singled out North Korea as a specific threat.

The health of the economy at the end of four years is a second yardstick by which Buffett said he'd evaluate the Republican Trump administration.

"And then third, I'll judge him on if the economy does well, which I expected it to do, how wide the participation in a better economy extends."

The chairman and CEO of Berkshire Hathaway, who supported Democrat Hillary Clinton for president, said he would have judged her by the same standards.

Reminding investors of his past statements, Buffett pointed out that he said the U.S. economy would be fine under Clinton or Trump.

To that end, Buffett told CNBC on Monday that mixing politics and investment strategies would be a "big mistake."

"Probably half the time [in] my adult life, I've had a president other than the one I voted for," he said. "But that's never taken me out of stocks."

Concerning Trump's Cabinet picks, Buffett praised Secretary of State Rex Tillerson, the former chairman and CEO of Exxon, as "the kind of person" he would have chosen.

"Tillerson makes a lot of sense," he said. "Tillerson is going to be working for the United States in that job."

"I don't worry at all about whether somebody comes from the oil industry or if they have a lot of money," Buffett said.

Evaluating Treasury Secretary Steven Mnuchin, White House National Economic Council Director Gary Cohn, and Commerce Secretary-designate Wilbur Ross, Buffett said: "They're Wall Street guys. They're smart guys."

Ross, a billionaire who made his fortune investing in distressed assets, is expected to be confirmed in a Senate vote scheduled for Monday evening.

Mnuchin and Cohn were both Goldman Sachs alums.

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  Monday, 27 Feb 2017 | 8:24 AM ET

Warren Buffett: Kraft Heinz bid for Unilever was not a 'hostile offer'

Posted ByFred Imbert

Billionaire investor Warren Buffett said Monday a misunderstanding may have led to Unilever's rejection of Kraft Heinz's merger bid.

In a wide-ranging interview on CNBC's "Squawk Box," Buffett said the bid for Unilever was not intended as a "hostile offer," but "it may have been interpreted that way."

"I can't argue about that, but if people say 'we don't like the price,' that's usually a 'maybe," the Berkshire Hathaway chief said.

Berkshire Hathaway and 3G Capital Partners, a private equity firm, are the largest stakeholders in Kraft Heinz.

The latter's CEO, Alexandre Behring, first approached Unilever with a merger bid and hadn't been "thrown out," Buffett said. Kraft Heinz followed through with a formal offer.

Kraft Heinz announced Feb. 17 it had presented Unilever with a $143 billion merger proposal, which Unilever promptly rejected.

"After that Friday, I got a call indicating that the offer was unwelcomed," Buffett said. "It became very apparent that Unilever did not want this offer."

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  Monday, 27 Feb 2017 | 8:45 AM ET

Warren Buffett: Wells Fargo made a 'huge mistake,' but it wasn't the one everybody talks about

Posted ByFred Imbert

Billionaire investor Warren Buffett said Wells Fargo should have nipped its problems in the bud when it had the chance.

"They made a huge mistake. The huge mistake wasn't necessarily the dumb incentive system," Buffett told CNBC's "Squawk Box" in a wide-ranging interview. "The problem was they didn't do something about it until they learned about it."

Because of the company's incentive structure, several Wells employees opened fee-generating accounts for customers who never requested them. Wells later agreed to pay $190 million to settle a customer fraud lawsuit.

"I keep preaching to our guys: If you see a problem, attack it immediately," Buffett said of his employees at Berkshire Hathaway.

Buffett also shared his wisdom on Monday about how he decides which banks to invest in.

"It's the same metric I use for buying any asset," Buffett told CNBC's "Worldwide Exchange" before joining CNBC's "Squawk Box." It's "the future cash compared to the present cash. ... A bank is no different than any other business. It's how much cash you're going to get between now and Judgment Day, discount it and compare it to other investments."

The chairman and CEO of Berkshire Hathaway has been a long-time investor in banks, most noticeably in Wells Fargo. At the end of 2016, Berkshire held a 9.56 percent stake in Wells worth around $28 billion, according to FactSet.

"There's no special trick in the valuation. There can be a problem in figuring out what's inside the bank," Buffett said. "Otherwise, I'm just looking at it like it's Coca-Cola or American Express."

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About Buffett Watch

  • Warren Buffett is arguably America’s most-admired and most-followed investor. Buffett is the largest shareholder and CEO of Berkshire Hathaway and one of the world’s most famous and most generous philanthropists. Legions of investors - from all walks of life - follow Buffett's homespun investment philosophy: invest in what you know, invest in value. Here on CNBC.com's Warren Buffett Watch, we’ll keep you up to date on what the “Oracle of Omaha” is doing by following Buffett's trades, words and deeds.