These aren't last century's airline companies, and that's why legendary investor Warren Buffett is spending money on them.
"It's true that the airlines had a bad 20th century. They're like the Chicago Cubs. And they got that bad century out of the way, I hope," Buffett said Monday on CNBC's "Squawk Box." "The hope is they will keep orders in reasonable relationship to potential demand."
Buffett's Berkshire Hathaway revealed late last year in an SEC filing it had taken a stake in American Airlines, United Continental Holdings and Delta Air Lines. CNBC also reported that Berkshire had taken another stake in Southwest Airlines.
Ironically, Buffett implied he had not taken a commercial flight in several years. "We'll save that (conversation) for after the show," he said.
The Oracle of Omaha also revealed why his holding firm previously hesitated to take significant positions in the industry.
"I think there have been almost 100 airline bankruptcies. I mean, that is a lot," he said. "It's been a disaster for capital."
Southwest's stock has outperformed Delta, United and American shares since Berkshire's stakes were revealed, rising nearly 30 percent.
UAL, LUV, AAL and DAL since Nov. 14
Buffett, chairman and CEO of Berkshire Hathaway, joined "Squawk Box" to talk about a range of topics including his latest investments, the stock market and the economy, and the presidency of Donald Trump.
After Jan. 1 and before Apple reported earnings on Jan. 31, Buffett's Berkshire Hathaway also bought 120 million Apple shares. Asked why, he said, "Because I liked it!"
The purchases that Buffett revealed on Monday give Berkshire Hathaway about 2.5 percent outstanding Apple shares. It also makes Apple one of Buffett's company's largest holdings, second only to Coca-Cola.
At this point, Buffett owns $17 billion worth of the tech giant's stock. The legendary investor said he upped his stake because of the consumer-retaining power of Apple and CEO Tim Cook's smart capital deployment strategy.
"Apple strikes me as having quite a sticky product, and an enormously useful product to people that use it," Buffett told CNBC.
Billionaire investor Warren Buffett told CNBC on Monday U.S. stock prices are "on the cheap side" with interest rates at current levels.
The chairman and CEO of Berkshire Hathaway said he put $20 billion into the market since just before the presidential election.
That reflects purchases beyond the most recent reporting period ending Dec. 31.
"We are not in a bubble territory" in the stock market, he said on "Squawk Box." If rates were to spike, however, then the stock market would be more expensive, he added.
After Friday's late comeback, the Dow Jones industrial average ahead of Monday trading was riding an 11-day win streak for the first time since 1992, with 11 record closes in a row for the first time since 1987.
Investors would be very sorry they didn't buy stocks if the 10 year Treasury yield were to stay at around the current 2.3 percent for the next decade, Buffett said. "If interest rates were 7 or 8 percent, then these [stock] prices would look exceptionally high."
The dynamism of the U.S. economy is "unbelievable," he argued, adding there will be ups and downs in growth but "the U.S. always comes back and wins."
Buffett released his closely-watched annual letter on Saturday, writing the U.S. economy would continue its "miraculous" boom.
"The best thing with stocks is to buy them consistently over time," he said, adding investors should spread the risk by owning a diversified set of companies.
"You'd be making a terrible mistake if you stay out of a game you think is going to be very over time because you think you can pick a better time to enter," he argued.
In an interview Monday with CNBC's "Squawk Box," Buffett said his company will give $1 million a year for life to any employee who guesses which teams will play in the NCAA men's basketball tournament's round of 16, or "Sweet 16."
"We also have a prize of $100,000 for whoever goes the furthest," Buffett said. "Last year, we had two fellows that tied. One of them knew a lot about basketball; the other didn't know anything about basketball, but they each got $50,000 out of it."
Buffett also said he expects more than 100,000 contest entries, topping last year's more than 85,000.
The tournament starts March 14 and concludes April 3.
Buffett has been a long-time basketball fan. In 2014, Berkshire insured privately-held Quicken Loans' contest offering $1 billion for the perfect March Madness bracket, the odds of which were 1 in 9.2 quintillion.
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CNBC PRO opened up the CNBC vault and reviewed all the interviews Warren Buffett gave the network over the years. These are the five best evergreen investing tips the Oracle of Omaha doled out during those talks with Becky Quick.
As you'll see in the video, Buffett returned to these five themes (advice like "always invest in productive assets") multiple times over the years, so we think these are some of the legend's most steadfast beliefs.
Warren Buffett turned 86 on Tuesday. At an estimated wealth of about $61 billion, he's averaged earning about $1.94 million per day for every day of his life.
Of course we know that's not totally an accurate picture, because he made a lot more in the second half of his life than in the first half. But as a way of comparing age and wealth, that $1.94 million is a number to put in perspective.
Based on that ratio, he'd be ranked seventh on the billionaires list.
Topping it would be Mark Zuckerberg and Bill Gates, the only two people who've averaged over $3 million per day. Many other famous tech giants crack the elite cutoff level of $1.5 million per day. They include Amazon's Jeff Bezos, Oracle's Larry Ellison, and the "Google Guys," Larry Page and Sergey Brin.
Berkshire Hathaway has added a large chunk of Apple stock to its portfolio.
The multi-billion-dollar conglomerate, which is run by legendary investor Warren Buffett, increased its stake in Apple by 55 percent as of June 30. Apple's stock has been on a tear lately, rising about 21 percent over the past three months.
"Productivity — that's the way the human race improves," Buffett said to Politico's Daniel Lippman and Jake Sherman.
Buffett homed in on the intersection between productivity and technology, or anything that improves "what people want to do with the 24 hours in the day," from innovation at the dentist's office to the assembly line to the farm, Politico reported.
The "staggering" pace of real output that's happened in America may have set expectations a little high for real GDP growth, Buffett said. At 2 percent, GDP growth "doesn't match our best years, but it's pretty damn good," he said in Politico's article.
Buffett's comments come as U.S. nonfarm productivity fell unexpectedly for the third consecutive quarter, according to a separate report on Tuesday. It marked the fastest pace of decline in three years.
When I turned bearish in January 2016 I missed three critical elements that caused the S&P 500 to grind toward record highs. First, a sufficient number of other investors did not share my skepticism about the global economy. Second, I misjudged investor faith in central bankers. Third, I underestimated the continued global appetite for yield bearing stocks. However, in recent days a host of big money investors have been vocally bearish. Does this mean the herd is turning and that I may have just been early? Perhaps, but what are these investors seeing that has led them to embrace my skepticism? Risk versus reward.
The response came a day after Buffett — while campaigning alongside Hillary Clinton in his home state of Nebraska — challenged Trump to release his tax returns and slammed his business record.