THIS IS THE FIFTH PART OF A TRANSCRIPT OF WARREN BUFFETT'S SERIES OF LIVE APPEARANCES THIS MORNING (MONDAY, MARCH 3) ON CNBC'S SQUAWK BOX.
STEVE LIESMAN: And one bright spot: While Wall Street, they're panicked over the credit crunch, three quarters of Americans say, `Credit crunch? What credit crunch?' They're reporting no trouble getting a loan, and that is unchanged from our survey in October. And just 16 percent of Americans say they have a lot of debt. So while the economic pundits may worry about American debt levels, Americans themselves aren't too concerned. Who better to ask about this than Warren Buffett? Good morning, Mr. Buffett. Steve Liesman here.
BUFFETT: Hi, Steve.
LIESMAN: So let me ask you what this means from a stock market perspective when we find such tremendously widespread negative attitudes. Does that signal a buying opportunity to you?
BUFFETT: Well, at some point it will. I--but I don't buy based on what I really think the market will do in the next, you know, month, six months or a year. If things--if I buy something at an attractive price, I don't care what the stock does. You know, if I buy a farm, I don't get a quote on it every day. If I buy an apartment house, I don't get a quote on it every day. And if I buy a stock, I want it to be a stock that I'm happy owning. If they close the stock market for a couple of years--they--back in 1914 they did close the stock market for many months and, you know, it's what the business does over time that's going to determine how I do. So I don't really--I don't try and time stock prices, I try to price stock prices. And it is true--and there's a lot of negative sentiment around--I'm more likely to find good things to buy than if everybody's in a very bullish mood.
LIESMAN: Is that one of the...
QUICK: So, Warren, that actually...
LIESMAN: Go ahead, Becky.
QUICK: Go ahead, Steve, I'm sorry.
LIESMAN: No, I was going to say, is that one of those times right now? Are you finding more things to buy in the stock market, and are those negative attitudes helping depress prices and creating buying opportunities for you?
BUFFETT: I'm--certainly I find more things to look at now than I did six months or a year ago. But I would say that it's changed more dramatically in the fixed income market than it has in the equity market, so that I may--that may be where I find the opportunities.
LIESMAN: Warren, one...
BUFFETT: You just--you go to work every--you go to work every day and you just look at--the nice thing about securities is that they change in price every day, and you don't have to pay any attention to it except if you--if you have borrowed money, it can--somebody pays a lot of attention to it. Or if you have fresh money to invest you--you know, when you get--when you find something you like at the right price, you buy it, and you don't think about whether it's going to go up or down next week or next month.
LIESMAN: One of the most striking things in this poll is for the first time--we've done this for four quarters now--Americans now look for a decline in their home values. What's the significance of that from an economic point of view, Mr. Buffett?
CNBC has scheduled a one-hour special program on Buffett's unprecedented Squawk Box appearences.
It's called Warren Buffett - The Billionaire Next Door: Face to Face. It will be hosted by Becky Quick and airs tonight, Monday, March 3 at 9pm ET.
BUFFETT: Well, it has a huge effect because, you know, with 60 percent-plus of the American people being homeowners, as being a huge asset--and in many cases it's a leverage asset--it obviously is going to be on their mind big time. And I get the figures every month. We have a number of real estate brokerage operations around the country, and I get the--I get the figures from many markets on listings and sales, and I've seen something like Dade and Broward County go from 6,000 listings and 3600 sales a month to where they're now, I think, 82,000 listings and about 1500 sales a month. So unless there's some major intervention by the government in some way, or something of the sort, home prices have not stopped going down. Now, they will at some point.
QUICK: Any of the intervention plans we've seen from the government strike you as being a good idea?
BUFFETT: Well, that--I haven't seen the details on many of them, but I think it's very hard to start interfering with markets without having a whole lot of unintended consequences.
KERNEN: Hey, Warren, always there's a backdrop to the things you say. You always end with, `I know that in the future things are'--you know, `the United States is going to do great and US businesses are going to do great.' That's always sort of the backdrop, you don't know when it's going to happen. I just wonder, you know, with your view on the dollar and knowing what we still have to work through in terms of all the--what you referred to as financial weapons of mass destruction--and there was a time where you actually said that--we believed you when you said the dollar was going to be worthless. You actually said worth less. You actually said worth less, but I mean, you are saying five years from now it probably is going to continue to go down. I mean, is--are you more negative now than you have been in recent years, would you say? Or tell me we're going to be OK down the road.
BUFFETT: No, no. No, I--you know, we'll be--we'll be fine. I mean, the factories don't go away, the people and their talents don't go away, the houses don't go away, the population grows. No, over time, you know, my children are going to live better than I do, although they don't seem to think so. They'd like to hasten it a little bit. My--and my grandchildren will live better than they do. And the same with you. This--in the--in the 20th century, the real standard of living in the United States went up seven for one, and a great many of the--of the factors that went into producing that really unprecedented gain in how people--improvement in how people live, those factors are still present. I mean, we have a market system, we have a meritocracy, we have the rule of law. None of them perfect, but they have combined in the past to move one generation after another ahead of the one that preceded them. That will continue to be the case. But it will also be the case that markets will do very wild, unpredictable things and you will see things you haven't seen before in markets. That's the way--people make markets, and they're not rational much of the time.
KERNEN: Hm. All right. Thanks, Beck. And we'll be back with you, Mr. Buffett, in just a second. If you're just tuning in, yeah, this is a very special morning. Becky Quick is live in Omaha with--in Nebraska with Warren Buffett, and he's fielding whatever we can throw at him, whatever you can throw at him, whatever Liesman, Carl, Becky, all of us and all of our viewers. He's answering your questions on cnbc.com. We like it.
Transcript prepared by BurrellesLuce
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