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Investing Warren Buffett Watch

  Wednesday, 2 Mar 2011 | 1:22 PM ET

On Stimulus: Government Should Cut Back

Posted ByAlex Crippen
Warren Buffett is interviewed by CNBC's Becky Quick in 2011 in front of a mock-up of the Buffett family grocery store in Omaha where he worked as a child.
CNBC/Dave Grogan
Warren Buffett is interviewed by CNBC's Becky Quick in 2011 in front of a mock-up of the Buffett family grocery store in Omaha where he worked as a child.

Warren Buffett tells CNBC he thinks the government should reduce its efforts to stimulate the U.S. economy now that the recovery is gradually picking up steam.

On Squawk Box this morning , Buffett said that "the government really did its job there in the fall of 2008" at the height of the credit panic, but now "I don't think we need as much monetary or fiscal stimulus as is going on."

Asked specifically if the Federal Reserve should end the QE2 program that has it buying billions in assets to keep rates low, Buffett replied, "Yeah. I have enormous respect for (Fed Chairman) Ben Bernanke. He knows way — you know, he knows more about the Fed than I do by a factor of 100 to one. But in the end, I don't — I don't think we need more of that now."

On the fiscal side, Buffett points to government spending at 10 percent of GDP. "We have massive stimulus going on in the United States. Stimulus like you haven't seen since World War II. We just don't call it a stimulus bill."

He believes the "most important factor in coming out of the recession is sort of the natural regenerative capacity of capitalism... 300 and some million people trying to figure out how to live better tomorrow than they're living today."

That's why he's been "optimistic on America right along," even back in 2008, "when I knew things were going to go to hell."

Current Berkshire stock prices:

Class B:

Class A:

For more Buffett Watch updates follow alexcrippen on Twitter .

Email comments to buffettwatch@cnbc.com

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  Wednesday, 2 Mar 2011 | 12:07 PM ET

More Jobs This Year Than Last Year

Posted ByAlex Crippen
Warren Buffett Speaks
Warren Buffett Speaks

Warren Buffett predicts the United States will "create more jobs this year than we did last year."

During his live appearance this morning on CNBC's Squawk Box, Buffett said productivity gains had been allowing businesses to increase output without adding jobs. Now, that "period is largely over."

According to Buffett:

"I think the gains in business will be much more reflected by gains in employment going from this point forward than they have been in the first year and a half or two years of this recovery."

Buffett told our Becky Quick that while he doesn't know how quickly the labor market will recover, "I would guess that by close to the election of 2012 that (the) unemployment (rate) would be probably in the low 7s."

About a month ago, the Labor Department reported that only 36,000 jobs were added to the economy during January, but the unemployment rate had dropped to 9 percent from 9.4 percent.

February's jobs report is scheduled to be released this coming Friday.

Current Berkshire stock prices:

Class B:

Class A:

For more Buffett Watch updates follow alexcrippen on Twitter .

Email comments to buffettwatch@cnbc.com

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  Wednesday, 2 Mar 2011 | 11:16 AM ET

The 'Underwear Tie'

Posted ByAlex Crippen
buffet_warren_tie.jpg
CNBC

Warren Buffett got some laughs during his live appearance on Squawk Box this morning by showing off his Fruit of the Loom tie, along with the company's not-quite-polite 'motto.'

The underwear maker is a subsidiary of Berkshire Hathaway and Buffett loves to promote his company's products.

He told Joe Kernen:

"I thought in honor of you, Joe, I would wear my underwear tie today. At Fruit of the Loom, you know, our motto is 'we cover the asses of the masses,' and I thought of you when we — I put this tie on."

Joe told Buffett he liked the tie. Then,after a back-and-forth between Joe and Carl Quintanilla about the relative merits of boxers vs. briefs, Buffett joked, "I wish I hadn't started this."

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  Wednesday, 2 Mar 2011 | 9:48 AM ET

Transcript Part 2: The 'Zebra' That Got Away

Posted ByAlex Crippen
wbw_ask_warren_trans2.jpg

Warren Buffett appeared live on CNBC's Squawk Box this morning, March 2, 2011.

This is part two of a transcript of his comments.

Click here for Part One: Most Berkshire Businesses 'Inching Along.'

BECKY QUICK: Joe, you had a question as well.

JOE KERNEN: I did. And I want to thank Warren for joining us and giving us all his time. Three hours is— it benefits us, obviously benefits viewers. If you were Charlie Sheen, I just figured out you'd make $12 million in three hours. So you're doing this— I don't think we're paying you that. So...

BUFFETT: No, but Charlie Sheen is— Charlie Sheen is paying me for being his media adviser, so I guess I'm actually doing very well.

JOE: Some of those— I— when I saw— when he said, "Gnarly," I said, `That has got Buffett's fingerprints on it,' just because you say gnarly.

BUFFETT: Yeah.

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  Wednesday, 2 Mar 2011 | 8:22 AM ET

Transcript Part 1: Berkshire Businesses 'Inching Along'

Posted ByAlex Crippen
wbw_ask_warren_trans1.jpg

Warren Buffett appeared live on CNBC's Squawk Box this morning, March 2, 2011.

This is Part One of a transcript of his comments.

Announcer: This is a special presentation of SQUAWK BOX, a three-hour conversation with the "Oracle of Omaha," Warren Buffett, the wit and wisdom of an investing legend.

BECKY QUICK: Good morning, everybody. Welcome to SQUAWK BOX here in CNBC. I'm Becky Quick in Omaha. Joe Kernen and Carl Quintanilla are back at headquarters at CNBC.

»Read more
  Tuesday, 1 Mar 2011 | 4:46 PM ET

Overview: Acquiring 'Elephants,' Declining US Dominance, Uneven Recovery

Posted ByAlex Crippen
Warren Buffett appearing live on CNBC's Squawk Box, March 2, 2011
CNBC/Dave Grogan
Warren Buffett appearing live on CNBC's Squawk Box, March 2, 2011

Warren Buffett tells CNBC that when it comes to possible acquisitions, there aren't many "elephants" out there and not all of them want to be in the Berkshire Hathaway "zoo."

That's a reference to his letter to shareholders over the weekend, in which he said his "elephant gun" has been reloaded and he has an "itchy trigger finger" for a major acquisition.

Appearing live from Omaha on CNBC's Squawk Box this morning, Buffett tells Becky Quick he doesn't have any "high probability" deals in the works now. While he's not necessarily scared away by higher stock prices, they do make it harder to find a deal now than two years ago.

TRANSCRIPT PART 1: MOST BERKSHIRE BUSINESSES 'INCHING ALONG'

Buffett says that of the 50 or so large companies that qualify as "elephants," he would not want to pay a 20 percent premium for most of them. He also points out it's easier to buy private companies.

He doesn't rule out an international acquisition, but says a purchase in the United States is more likely.

Buffett does reveal to Becky that Berkshire had an "iron in the fire" within the last few days, but lost out to another buyer. Was it an "elephant" on the scale of Burlington Northern Santa Fe? No, says Buffett, more like a "zebra."

AMERICAN ECONOMIC DOMINANCE DIMINISHING

In a discussion about the U.S. dollar, Buffett said that over time it will become "less important" as America's "dominance" of the world's economic system "diminishes."

"That doesn't mean we aren't going to be the leading player 25 years from now, we will be. But this overwhelming dominance that we, post World War Two, that we exhibited around the world, other countries have caught on to some degree... We should be glad they've caught on. Their people are going to live better because they've caught on. The people in China are not smarter than they were 50 years ago, they are not working harder, they've learned how to unleash their potential. It's a marvelous thing. But the United States is the example for the world."

While he concedes the U.S. economy will not be able to grow as quickly as China's, he notes that country is starting at a "far, far lower base."

UNEVEN U.S. ECONOMIC RECOVERY

Buffett says he thinks the U.S. economy is "coming back" and in the long-run "you can't stop" the United States, but most of Berkshire Hathaway's businesses are closer to "inching along" than "chugging along."

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  Tuesday, 1 Mar 2011 | 3:39 PM ET

Charges Against Gupta Are Blow to Investors: Hedge Fund CEO

Rajat Gupta
Eric Piermont | AFP | Getty Images
Rajat Gupta

The Securities and Exchange Commission's charges against ex-Goldman Sachs board member Rajat Gupta on insider trading in connection with Raj Rajaratnam and the Galleon Fund case is yet another blow to investor confidence, Matthew Halbower, CEO and chief investment officer of hedge fund Pentwater Capital Management, told CNBC Tuesday.

“When the complaints were filed in the Galleon case, it was a very hot topic, because everyone wanted to know what your compliance is like,” said Halblower, whose firm specializes in special situations and event-driven investing. His hedge fund has an annualized return of nearly 13 percent.

“It still is, and it’s a question that is raised in nearly every investor meeting that we have.”

The SEC accused Gupta Tuesday of illegally disclosing information about quarterly earnings at Goldman and Procter & Gamble , where he had also been a director.

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  Tuesday, 1 Mar 2011 | 2:56 PM ET

Buffett's Goldman Sachs Investment in 2008 Plays Key Role in New Insider Trading Accusations

Posted ByAlex Crippen
Rajat Gupta
Eric Piermont | AFP | Getty Images
Rajat Gupta

The SEC is accusing a former board member at Goldman Sachs with illegally giving Galleon hedge fund founder Raj Rajaratnam advance notice of Berkshire Hathaway's $5 billion dollar investment in Goldman at the height of the credit crisis.

The SEC says Rajaratnam bought 175,000 Goldman shares after getting a call from Rajat Gupta about the deal, before it was announced late in the day on September 23, 2008.

Gupta, says the SEC, had just gotten off a conference call in which the Goldman board had discussed and approved the cash infusion from Warren Buffett's company.

The next day, Goldman shares gained on the announcement that Buffett was casting a vote of confidence in the firm.

Rajaratnam, according to the SEC, sold his Goldman shares, generating an "illicit" profit of over $900,000.

Here's how the SEC's news release describes the alleged scheme:

In the order that institutes administrative and cease-and-desist proceedings against Gupta, the SEC’s Division of Enforcement alleges that, while a member of Goldman’s Board of Directors, Gupta tipped Rajaratnam about Berkshire Hathaway’s $5 billion investment in Goldman and Goldman’s upcoming public equity offering before that information was publicly announced on Sept. 23, 2008. Gupta called Rajaratnam immediately after a special telephonic meeting at which Goldman’s Board considered and approved Berkshire’s investment in Goldman Sachs and the public equity offering. Within a minute after the Gupta-Rajaratnam call and just minutes before the close of the markets, Rajaratnam arranged for Galleon funds to purchase more than 175,000 Goldman shares. Rajaratnam later informed another participant in the scheme that he received the tip on which he traded only minutes before the market close. Rajaratnam caused the Galleon funds to liquidate their Goldman holdings the following day after the information became public, making illicit profits of more than $900,000.

Gupta is also accused of providing Rajaratnam with inside information on upcoming earnings reports by Goldman, as well as Procter & Gamble, where Gupta also served as a director.

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  Monday, 28 Feb 2011 | 6:49 PM ET

Berkshire at New High Amid Speculation on Targets for Buffett's 'Elephant Gun'

Posted ByAlex Crippen
080229_warrenbuffett_letter_to_shareholders.jpg

Wall Street appears to like Warren Buffett's "itchy trigger finger" for a major acquisition and his economic optimism, two of the major themes in his new annual letter to shareholders , released on Saturday.

Amid a lot of speculation about possible targets for Buffett's reloaded "elephant gun," shares of Berkshire Hathaway rallied by almost three percent today, bringing both share classes to fresh 2-1/2 year closing highs.

Berkshire B closed up 2.8 percent at $87.20, its highest close since October 6, 2008.

The Baby Berkshires, adjusted for last year's split, went all the way down to a close of 46 on March 9, 2009.

From that low point just under two years ago, they are up almost 90 percent.

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  Monday, 28 Feb 2011 | 2:31 PM ET

Railroad Stocks Power On Amid Oil Spike

Posted By Constance Gustke, |Special to CNBC.com

Crude oil and railroads mix well together.

Four times more fuel efficient than trucking, railroads tend to prosper when oil prices are rising.

The carbon story fits well too . Moving goods by rail rather than truck reduces greenhouse omissions, especially as the industry embraces lighter, high-tech materials and parts.

»Read more

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.