In one respect, the Oracle of Omaha is having his first truly disappointing year since 1990.» Read More
Private equity firm 3G Capital, the Brazilian-based backer of the Kraft-Heinz merger announced Wednesday, instills fear in the companies it acquires with its reputation for fierce cost-cutting.
But while the acquirers have already promised to reduce costs by as much as $1.5 billion, the local economic impact may not warrant such anxiety.
Kraft Foods Group stock surged Wednesday after the company announced a merger deal with H.J. Heinz financed in part by Warren Buffett.
Buffett told CNBC that his Berkshire Hathaway company will have $9.5 billion worth of common stock in the newly merged H.J. Heinz-Kraft Foods company. It will be headed by Heinz Chief Executive Bernardo Hees.
The deal to create the third-largest food and beverage company in the North America—announced hours before Buffett's interview on CNBC's "Squawk Box"—was in the works for about four weeks, the billionaire investor said.
"It moved along quite promptly," he said, but stressed he's in it for the long haul.
"I've always felt that the present arrangement with the euro would not stand the test of time in the sense that it would have to be modified," the Berkshire Hathaway chief told CNBC's "Squawk Box" in an interview that largely focused on his role in the Heinz-Kraft Foods merger.
On the euro, Buffett said, "You harmonized the currency without harmonizing a whole lot of other things that have big effects on the currency." He argued one can't work without other, "sort of like in the Civil War, saying we can't exist half-slave, half-free."
"The Greek situation may illustrate the kind of adjustments that are needed," Buffett added.
After talks with European leaders, including German Chancellor Angela Merkel, in the past week, the leftist government in Greece said it will present a package of reforms to its euro zone partners by Monday in the hope of unlocking aid and avoiding a messy default.
Gen. Douglas MacArthur's son, Arthur, escaped the towering shadow of his heroic dad only by changing his name and living as a recluse for most of his life. Bill Gates Jr., son of a renowned lawyer whose name graces a top global firm, eschewed the bookish discipline of law and dropped out of college to forge his own spectacular path in computer software and, lately, philanthropy. Winston Churchill's son might have been better off had he never run for public office. Greg Norman Jr.'s golf game may be better than average, but even impressive performance matters little when the frame of reference is his championship father.
The children of legends who carve out their own niche offer a broad model and lesson: Find your own strengths and play to them rather than try to measure up to those of your parents'. The succession challenge may be greatest in the context of a family business, as several generations of DuPonts or Pritzkers might attest.
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Berkshire Hathaway increased its net worth by $18.3 billion last year, the company said in its 50th annual letter on Saturday, with a "good year" marred in part by underperformance at its Santa Fe railroad unit.
The Omaha, Nebraska based conglomerate run by billionaire Warren Buffett also dropped a big hint that the era of its larger-than-life CEO was nearing a close.
Here's Warren Buffett's main reason for sticking with IBM: "Because I like it."
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"It's kind of been doing exactly what I like ever since we started buying it," Buffett told CNBC's "Squawk Box" on Monday. "People have this misconception that—when we buy a stock—we want it to go up. That'st the last thing we want it to do."
The Oracle of Omaha held a 7.79-percent stake in IBM as of Dec. 31, a stake that has cost him billions in paper losses. The company's 3.6 percent drop on Jan. 21 cost Buffett almost $400 million. Buffett also lost nearly $1 billion on Oct. 20, because of IBM, following a weak earnings report.
"There have been no surprises at IBM since we started buying it a few years ago," Buffett said. "We expected revenue to come down. We expected a year like this where foreign exchange would take a whack off revenues."
IBM on Jan. 20 reported fourth-quarter earnings of $5.81 a share, down from $6.13 a share a year earlier. Revenue decreased to $24.11 billion from $27.70 billion.
Front-runners Ajit Jain nor Greg Abel don't know who will be Berkshire Hathaway's next CEO, Warren Buffett said Monday.
"The board has talked about it at every meeting for I don't know how many years. We have a precise plan in mind," Buffett told CNBC's "Squawk Box".
Jain and Abel, both long-time Berkshire Hathaway lieutenants, were named as possible successors to Buffett in Vice Chairman Charlie Munger's annual letter to shareholders. "When Charlie's letter came in, and he referenced Greg and Ajit, it was news to me that he was writing that. He's right, they're both very good," Buffett said.
Nevertheless, Buffett said in his annual letter to shareholders, which was released Saturday, he and the board have already agreed on who would carry the torch once his time comes. "In certain important respects, this person will do a better job than I am doing," Buffett said in his letter.
Currently, Abel is the chairman, president and CEO of Iowa-based Berkshire Hathaway Energy, while Jain runs the company's reinsurance division.
—CNBC's Javier David contributed to this report.
The Oracle of Omaha had some financial advice for NBA superstar LeBron James on Monday.
"Through the rest of his career and beyond, in terms of earning power, [he should] just make monthly investments in the low-cost index fund," Buffett told CNBC's "Squawk Box" on Monday in response to a video question posed by James. "Somebody in his position ought to have a significant cash reserve."
Buffett said James should keep it simple when investing. "Athletes generally tend to get promoted by people with restaurants and real estate," Berkshire Hathaway's CEO said. "Everybody's got an idea for him and, usually, the simplest is the best."
Buffett also said James should invest primarily in American companies. "Owning the United States at a decent average price bought over time, you really can't go wrong with that," he said.
Buffett also said someone like James should keep his investing strategy simple because of the demands that come with being a professional athlete. "Their expertise is making a lot of money doing something they do extremely well, but they aren't generally going to be able to take the time to become a professional investor."
James also asked Buffett for some basketball advice. Buffett said jokingly: "We went up for a jump ball one time and he got it, went the length of the court [and] dunked it just as I was starting to jump, so he does have that much to learn from me."
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