Investing Warren Buffett Watch

  Tuesday, 9 May 2017 | 10:53 AM ET

Cramer: There's a change happening with investors, and Warren Buffett has something to do with it

There's a fundamental change happening with investors: They're putting everything into index funds, CNBC's Jim Cramer said Tuesday.

"People don't pick a lot of individual stocks. People have kind of listened to Warren Buffett more than they listened to anybody else," Cramer said on "Squawk on the Street."

At the Berkshire Hathaway annual shareholder meeting on Saturday, Buffett told investors they should stick to using index funds, saying they are better off. Buffett offered a negative view of actively managed funds, citing high fees and bad results for investors.

"And Warren Buffett says just keep contributing to your 401(k), just keep buying the index fund. I'm not saying that that is a complacent thing. I'm saying that's become kind of the way people save," Cramer said.

Cramer made his comments on the day the CBOE volatility index (VIX), widely considered the best gauge of fear in the market, hit its lowest since December 2006.

An index fund is a type of mutual fund with a portfolio constructed to track the components of a market index.

Also watch: Cramer's Stop Trading: Tesla

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  Tuesday, 9 May 2017 | 8:48 AM ET

Here are 15 things that will happen during the next 20% sell-off for stocks

Posted ByJosh Brown

Just a little thought experiment –

The last time the US stock market (S&P 500) registered a peak-to-trough decline of 20% was in October 2011. We had another bear market beneath the surface from 2014 through the mid-point of 2016, in which the median S&P 500 stock had lost 25% while small caps and international stocks fared much worse, but it didn't exactly ding the major averages quite badly enough to count as an "official" bear.

A lot has changed since the fall of 2011, both in terms of the drivers in the market as well as the attitudes of investors. It's been a new era. So I wonder how this new era will react to a bear market rearing its head.

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  Tuesday, 9 May 2017 | 8:40 AM ET

Social Capital CEO Chamath Palihapitiya says he changed his mind on Apple, here's why

Social Capital Founder and CEO Chamath Palihapitiya told CNBC on Tuesday that Apple has an emerging business that no one has been paying attention to.

In an interview on "Squawk Box," Palihapitiya said at first he misunderstood it.

"The iOS business," Palihapitiya said. "All of the business of selling apps and selling subscriptions is extremely cruelly misunderstood, including by me."

"If you look at that business carefully, now I'm starting to get actually slightly more constructive on Apple than I've ever been," he said.

Palihapitiya said when looking at how much money Apple is making, "it is probably one of the single biggest software businesses in the world now."

"Hardware on the surface and some really powerful subscription and transactional software underneath," he said. "And I think that if you really value that you could probably get really constructive on it."

The comment came a day after investors pushed Apple's total market value to over $800 billion. Billionaire investor Warren Buffett praised the company, calling the iPhone, "a very, very, very valuable product."

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  Tuesday, 9 May 2017 | 7:53 AM ET

Billionaire Sam Zell disagrees with Buffett, saying Obamacare repeal is not a gift for the rich

The tax cut in the GOP's health-care bill should not be viewed as a giveaway for the wealthy, Equity Group Investments Chairman Sam Zell told CNBC on Tuesday.

Fellow billionaire Warren Buffett told CNBC on Monday the Republican bill to replace Obamacare would "cut the hell out of taxes" for the rich if the measure were to make it through the Senate without any changes.

But Zell said on "Squawk Box" the GOP approach to health care on taxes is not for the rich or the poor. He said the measure, supported by President Donald Trump and passed in the House last week, balances out the system. Zell, a former Democrat, said he's more of a Republican lately — conservative on fiscal matters but liberal on social issues.

The Republican bill as written would eliminate former President Barack Obama's Affordable Care Act taxes imposed on the wealthy that, in part, pays for health-care coverage for Americans.

The GOP measure calls for the repeal of Obamacare's 3.8 percent investment tax, such as capital gains, and a 0.9 percent Medicare payroll tax. Both of those apply to individuals earning $200,000 or more a year and couples earning more than $250,000.

Buffett, who supported Hillary Clinton in the election, said his personal tax bill would be 17 percent lower under the GOP health measure — about $680,000 on his tax bill of a "little less than $4 million."

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  Monday, 8 May 2017 | 6:59 PM ET

Cramer Remix: The casino stock to buy if you’re playing your cards safe

With investors worried about the fate of casino stocks in light of new Chinese government regulations on ATMs in Macau, Jim Cramer vetted three gaming names to see how they might hold.

"I don't want to overreact in either direction, but the truth is I'm actually not particularly concerned," the "Mad Money" host said. "If anything, I think this weakness could be a buying opportunity because we've seen this kind of story play out before."

Cramer was referring to December 2016, when the stocks of Las Vegas Sands, Wynn Resorts, and MGM fell on reports that the Chinese government would cut the ATM withdrawal limit in Macau.

Chinese policymakers' most recent move targets illegal foreign exchange activity, and even though less money withdrawn means less money for casinos, Cramer said concerns were overblown.

"If you bought Wynn's stock into that December scare, you'd now be up 32 percent," Cramer said, offering two options for playing the most recent restrictions, one for more daring investors and one for safer players.

"Macau is still on fire, and if history is any guide, you want to buy the stock of Wynn Resorts whenever investors get nervous about the Chinese placing restrictions on Macau's cash machines," he said. "At the same time, MGM is a lot less hostage to China, so if it keeps coming down with the rest of the group, you've got my blessing to do some buying."

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  Monday, 8 May 2017 | 6:26 PM ET

This start-up CEO bought shares of Berkshire 13 years ago and finally made it to see Buffett

Posted ByAri Levy
Warren Buffett Secret Millionaire's Club dolls on display at the Annual Berkshire Hathaway Shareholder's Meeting in Omaha, NE on May 6, 2017.
Lacy O'Toole | CNBC
Warren Buffett Secret Millionaire's Club dolls on display at the Annual Berkshire Hathaway Shareholder's Meeting in Omaha, NE on May 6, 2017.

Joshua Reeves bought a few thousand dollars worth of Berkshire Hathaway shares in 2004, with some money he made from an internship at Intel. He'd just finished his freshman year Stanford.

Thirteen years later, as CEO of a $1.1 billion software start-up called Gusto, Reeves took advantage of his Berkshire ownership and traveled to Omaha, Nebraska, for the company's annual shareholder meeting.

For Reeves, who's read a number of books about Warren Buffett, the event marked the end of a two-week, 12-city road trip visiting Gusto's small business customers. Gusto's software is designed to simplify back office functions like human resources and payroll. He took the cross-country trek in an RV, before flying to Omaha from Jacksonville, Florida, on Friday.

"Books are great, but nothing can replace some face-to-face interactions," Reeves said in an interview on Monday, before hopping on a flight back to San Francisco. "I sat there for seven hours writing pages and pages of notes."

Reeves spent Saturday at the CenturyLink Center in Downtown Omaha, listening to the entire presentation and question-and-answer session. On Friday, he strolled through the exhibit hall for what Berkshire calls "shareholder shopping day," viewing demos from Dairy Queen and See's Candies as well as jet engine maker Precision Castparts and homebuilder Clayton Homes.

Reeves said he listened intently both to Buffett's views on technology and tech companies as well as his broader advice on leadership and building businesses.

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  Monday, 8 May 2017 | 2:46 PM ET

Op-Ed: Munger is right about the 'disgusting' cost of dying. He's wrong about the solution

Posted ByJake Novak

Berkshire Hathaway Vice Chairman Charlie Munger, 93, made some waves Monday morning when he told CNBC's Squawk Box that "the amount of waste from over treatment of the dying is just disgusting. There's a lot wrong with the system."

Munger went on to basically say he prefers a single payer government run/"Medicare for all" system that he believes will put American businesses on a better playing field.

First off, Mr. Munger should be applauded for putting his finger on what is indeed the biggest driver of health care costs in America. As noted in this column at least half a dozen times over the years, the sickest 5 percent of Americans account for more than 50 percent of our national health care spending. That 5 percent of course includes the "dying" people Munger was referring to and the money spent on their behalf. Finding a way to cut down on the cost of caring for those dying and very sick people is the key to this basic economic problem.

Unfortunately, single payer isn't the answer. It simply replaces the heavy spending with rationing, something a billionaire like Munger will never have to worry about.

Those who insist single payer rationing is some kind of invented conservative boogeyman should talk about what completely government-controlled single payer looks like at the Veterans Administration hospitals, where we know of all too many patients who died while waiting interminably for care.

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  Monday, 8 May 2017 | 1:46 PM ET

Apple market cap tops $800 billion for the first time

Apple's stock continues to hit new highs — and on Monday, investors pushed Apple's total market value to over $800 billion.

Apple shares briefly surpassed a price of $153.44 a share, and with Apple's 5.214 billion shares outstanding, according to its latest quarterly report, that makes its total market capitalization just over $800 billion.

Shares hit a high of $153.70 on Monday, before closing at $153 a share, up 2.7 percent.

The iPhone maker reported mixed quarterly earnings last week, selling fewer phones than expected, though at more expensive prices. But chief executive Tim Cook attributed some of the slowdown to the fact that consumers are holding out for the next launch, anticipated in September.

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  Monday, 8 May 2017 | 11:56 AM ET

Buffett called me a hero, but I'm just a guy 'who gave a damn' about investors, says Jack Bogle

Two days after billionaire investor Warren Buffett thanked him for his contributions, investment pioneer Jack Bogle told CNBC on Monday he is just a guy who cared about investors.

On Saturday, Buffett, speaking at the 53rd annual general meeting of Berkshire Hathaway, said the Vanguard founder "probably (has) done more for the average investor than" anyone. The Berkshire chairman and CEO called him out to stand for an ovation. The comments came before Bogle's birthday on Monday.

Bogle said he wrote Buffett a letter to thank him, but added he's "an ordinary guy."

"I'm not a hero," Bogle, 88, said on "Squawk on the Street." "I'm just an ordinary guy who has tried to do my best for investors and who gave a damn about the people who were investing and wanted to make sure they got a fair shake. If that's heroism, then so be it."

Bogle, sometimes called the king of index funds, founded Vanguard in 1975. The investment management company later launched the first low-cost index mutual fund. Today it has more than $4 trillion in assets under management.

The Vanguard founder has encouraged investors to own the stock market and diversify, and to buy at a low cost and invest for the long term. (Here are other tips from Bogle.)

On Monday, Bogle said indexing is here to stay, and feels good about getting "the ball rolling" years ago.

"I don't look at the traditional funds as being threatened," Bogle said, when discussing the rise of ETFs. "They're total international, total bond market. Those are the dominate forms of investment for the traditional funds like ours. That's where the money is going mostly."

—CNBC's Trent Gillies contributed to this report.

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  Monday, 8 May 2017 | 11:27 AM ET

Watch the full CNBC interview with Warren Buffett

Billionaire investor Warren Buffett shared his views on everything from technology investing to President Trump in an in-depth and lengthy interview Monday on CNBC's "Squawk Box."

The chairman, CEO and largest shareholder of Berkshire Hathaway was also joined by the company's Vice Chairman Charles Munger and Buffett-friend Bill Gates.

Topics discussed with the 'Oracle of Omaha' include:

  • Why he missed out on Amazon's shares
  • The Republican health-care bill
  • Wells Fargo
  • United Airlines
  • His IBM mistake
  • A defense of layoffs

Buffett spoke with CNBC's Becky Quick from Omaha, Nebraska following the Berkshire annual meeting that attracted an estimated 40,000 on Saturday.

To watch the broadcast interview in its entirety and commercial free, you must be a CNBC PRO subscriber.

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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.