This is a transcript of Warren Buffett's live interview on CNBC with Andrew Ross Sorkin on Friday, September 30, 2011. In it, Buffett says he thinks it is "very, very unlikely" the U.S. economy will go back into recession. He also reveals that Berkshire has been buying billions of dollars worth of inexpensive stocks during the third quarter, and has just started to repurchase its own shares:
SIMON HOBBS, CNBC: Let's go down to the floor. Andrew Ross Sorkin is there with a very special guest this Friday morning. Good morning, Andrew.
ANDREW ROSS SORKIN, CNBC: Good morning. We are here with the one and only, the "Oracle of Omaha," Warren Buffett. We're also here with Cathy Baron Tamraz. You're here for the 50th anniversary of Business Wire, so congratulations to you, Cathy.
CATHY BARON TAMRAZ, Business Wire Chairman & CEO: Thank you so much.
ANDREW: I want to get to you in a second and this anniversary, but I also want to get to buybacks, which are in the news this week. You just announced it. Why do it now? I think there's a big question, Buffett watchers who've seen you over many years, you have not always liked buybacks. So what is it about what's going on right now?
WARREN BUFFETT, Berkshire Hathaway CEO: Price to value. I mean, the only — the only time to do buybacks, in my view, is when you think your stock is selling well below its intrinsic business value. And we talk— we've talked about that in many annual reports over the years, and we haven't had very many opportunities to do it. Now we think that...
ANDREW: OK. So you've instituted the program, but the big question that viewers want to know is, have you actually started buying yet?
BUFFETT: We actually have.
ANDREW: You have started buying yet.
BUFFETT: Yeah, yeah.
ANDREW: OK. And how much can we expect for you to buy? I know you said that you wanted to keep a $20 billion kitty at all times. You have about $40 billion on hand right now.
BUFFETT: Yeah. Well, we don't have quite that much, but the cheaper it is, the more aggressive, generally, we will be in terms of buying. It's just like buying any other stock.
ANDREW: And how much have you bought so far?
BUFFETT: We only got the paperwork done yesterday.
ANDREW: OK. And what does this say, and then I want to get to Cathy, what does this say more in a larger picture about your ability to find elephants? You always talk about your trigger finger.
BUFFETT: That's what I'm looking for.
ANDREW: Well, I know that, but in terms of moving money into your own stock, does it mean that you're not finding the same kind of opportunities right now, given the markets?
BUFFETT: We find opportunities periodically. I mean, we did the BofA deal, we did Lubrizol, we put 9, almost $9 billion in Lubrizol. We just announced yesterday a $400 million acquisition for an insurance company. Just yesterday. We've bought, in the last quarter, the third— in the current quarter, we bought net 4 billion of common equities, which was similar to the total amount we bought in the first half. The cheaper stocks get, the better I like to buy them, whether it's our stock or somebody else's.
ANDREW: So there's still— there's still— we should still see you make a big deal.
ANDREW: And this is not...
BUFFETT: I sure hope so.
ANDREW: And the buyback is not an announcement that you're taking...
BUFFETT: Oh no.
ANDREW: ...money into your own stock.
ANDREW: OK. Cathy, Mr. Buffett bought your company in 2006. You've lasted 50 years through all sorts of different business cycles, and yet we're living now in the age of the Internet and Twitter. And the SEC has now told companies that they can actually put their press releases up online. What do you do to defend your business and, frankly, to grow your business in this environment?
TAMRAZ: Well, actually our business is growing in this environment. We also are creating websites for companies that want to put their releases online. But that's not the way to put out breaking news. And that's what we do at Business Wire. And as long as we can push that news out to the investing public, I think it's the best way to go.
BUFFETT: If I— if I want to know what's going on at Bank of America, I do not want to have a website tuned to that all day. I want to get it instantly from CNBC, and the way that they'll get it is, you know, is from Business Wire.
ANDREW: Right. I would— I would be remiss if I didn't mention that one of the other reasons you're in town is for this Obama fundraiser tonight at the Four Seasons.
BUFFETT: Right. Yeah.
ANDREW: And I wanted to ask you specifically, so many people in the business community say that the president is anti-business. Do you believe he's anti-business...
ANDREW: ...when you think about his rhetoric? And why not?
BUFFETT: No. Well, I mean, I...
ANDREW: Rhetoric and policies, by the way. There's so many people who have said...
BUFFETT: Oh, I mean, he took action to save General Motors and Chrysler. I mean, he backed programs that have kept the banks around and, in the process, rejuvenated the economy. He knows, and he knew it 10 years ago, to be president of the United States...
BUFFETT: ...particularly in the second term, you better have business doing well. And he wants it to do well.
ANDREW: So the talk of higher taxes and more regulation, you don't think is creating more uncertainty in the business community?
BUFFETT: I don't— I don't have any...
ANDREW: What do you tell the CEOs who talk to you about this?
BUFFETT: I don't have any uncertainty. We are investing at Berkshire a record $7 billion in plant and equipment this year. Never before that much; 90-plus percent is in the United States. We're seeing our businesses doing well. Business is coming back in the United States.
ANDREW: OK. Let's talk about the ‘Buffett Rule’ for a moment.
ANDREW: Talk to you about how it came about in terms of the White House getting in touch with you and you putting your name to this.
BUFFETT: Well, (National Economic Council Director) Gene Sperling called and said, `Can we use your name?' And I said yes.
ANDREW: Are you— are you happy you said yes?
BUFFETT: Sure. I mean, I wrote about it.
ANDREW: Are you happy with the way it's being described? Is the program that the White House has presented, a million dollars and over, your program?
BUFFETT: Well, the precise program, which will— I don't know what their program will be. My program would be on the very high incomes that are taxed very low. Not just high incomes.
BUFFETT: Some guy make a 50 million here playing baseball, his taxes won't change. Make $50 million a year appearing on television, his income won't change. But if they make a lot of money and they pay a very low tax rate, like me, it would be changed by a minimum tax that would only bring them up to what the other people pay.
ANDREW: OK. So does that mean you disagree with the president's new jobs proposal, which would be paid for by raising taxes on households with incomes of over $250,000?
BUFFETT: Now that's another program that I won't be discussing. I—my program...
BUFFETT: ...is to have a tax on ultra-rich people who are paying very low tax rate, not just all the rich people; and it would probably apply to 50,000 people in a population of 310 million.
ANDREW: OK. So, but that means you disagree with the president on the 250,000.
BUFFETT: No. No, no, no. You may disagree with him, I don't know.
ANDREW: No. I don't know, but I'm asking, so you agree $250,000 is the right number?
BUFFETT: I will look at the overall plan that gets submitted to Congress and which they are voting on and decide, net, do I like it, or do I not like it. I— there's no question there will be parts I'll disagree with, just like any plan.
ANDREW: And are you a supporter of his jobs program right now?
BUFFETT: I am a supporter of the action he's trying to get the Congress to join him in taking to really do something rather than sit there and go in different directions.
ANDREW: But you agree with all the details or no?
BUFFETT: Oh, I haven't looked at all the details.
ANDREW: OK. Fair enough. Cathy, you know, one of the conversations that we have always about Berkshire is succession. It is an issue. And as something who understands the culture of this company so well and what Mr. Buffett has done for it, I'm curious if you could pick his successor, what kind of person would it be? Who would it be?
TAMRAZ: Well, I don't want to think about it, but since you're making me think about it. He's irreplaceable in terms of who he is. I think I'm not privy to what's going on. That's at the board level, but it's got to be somebody that knows how to motivate people because the one thing that Warren Buffett does, not better than anything else, because he's the capital...
ANDREW: Can the culture remain the same?
TAMRAZ: Yes. Because there are so many people throughout the organization that live and breathe the same— the culture that Warren has created and it's infectious. I feel it myself after five and a half years in the company. The culture will go on.
ANDREW: All right. Now you recently hired Ted Weschlerto be one of your investment managers.
ANDREW: Some people have speculated he actually could ultimately be CEO. He's not just been an investment manager, but also a investment banker and has worked in corporate America. How should we think about him?
BUFFETT: We've got a lot of talent.
ANDREW: You've got a lot of talent. And will you be— that— you have two. You've suggested that you would go for— that you would have three in total.
BUFFETT: Possibly, possibly.
ANDREW: Possibly. Do you have a name already in your hat?
BUFFETT: I've got a couple in my mind, but I'm very happy with the two. I'll be happy if we have a third. You know, and it's not essential at all, but...
ANDREW: And none of those three do you think will become the CEO of the company?
BUFFETT: Hard to tell. Hard to tell.
ANDREW: Final question, Berkshire Hathaway, long thought of as a play on America, given the industrials and how much that represents.
ANDREW: So many people say we're going back into a recession. You say what?
BUFFETT: Oh, we're not. We're not going— I think it's very, very unlikely we'll go back into a recession. We're coming out of a recession and what we've been doing it since 2009, and a great majority of our businesses are going to be earning more money than they did last year and the year before.
ANDREW: Right. How much are you worried about Europe impacting and infecting actually Berkshire's business and our economy?
BUFFETT: I don't worry too much about it infecting us. I worry about what will happen in Europe. And it's bound to have some fallout here. How it plays out, nobody knows. All I know is our business is five years from now and 10 years from now, and the country's businesses will be doing a lot better than now.
ANDREW: You own some German bonds?
BUFFETT: We own German bonds.
ANDREW: German bonds.
ANDREW: What kind of haircut do you want to take on those?
BUFFETT: On German, no...
ANDREW: You think you're OK.
BUFFETT: They're in our— we have a German reinsurance subsidiary that's on those bonds for a long, long time, and we're fine with them. But we've sold other countries.
ANDREW: Bank of America .
ANDREW: Big deal for you. (CEO) Brian Moynihan, since you— since you made your investment, a lot of things have happened there. Did you expect those things to happen...
ANDREW: ...the way they have in terms of layoffs and everything else?
BUFFETT: ...I expected him to clean up a lot of the problems from the past, and they're going to take a long time to clean up.
BUFFETT: I mean, two years from now and three years from now you'll still see some headlines on it.
ANDREW: And your bet is that the company not only survives but thrives?
ANDREW: Or you're just making a bet that you stick around and you're going to get your dividend?
BUFFETT: No, it's a great underlying business. It's a fabulous underlying business, but it's got a lot of problems from the past. Brian didn't create those, he has to— he has to clean up the mess. But I've been in those kind of situations before.
ANDREW: Fair enough. Warren, thank you so much.
BUFFETT: OK. Thank you.
ANDREW: Cathy, congratulations on 50 years.
TAMRAZ: Thank you, Andrew. Thank you.
ANDREW: Let's hope there's 50 more. Back to you guys, thanks so much.
HOBBS: So Andrew, has he invited you to the dinner tonight?
ANDREW: I have not been invited. Warren has not invited me. Am I invited to the dinner tonight?
ANDREW: I don't know how much that plate costs, though. That's a pricey plate.
BUFFETT: Let's— get out your wallet.
ANDREW: Yeah, I've got to get my wallet out, so. Anyway, back to you guys.
BUFFETT: We're very selective.
BUFFETT: All you have to have is $1,000 or...(unintelligible).
HOBBS: Andrew Ross Sorkin with Warren Buffett.
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