Buffett Watch

Buffett: We need a big mattress for money in Europe

Berkshire Hathaway Chairman and CEO Warren Buffett said Monday he is concerned about negative interest rates, now seen in Europe and Japan.

"We are doing something the world has never seen," he said. "We do not know how this movie plays out."

"Berkshire Hathaway is sitting with billions of dollars of euros in an insurance company ... in Europe and they will bear a negative rate," Buffett told CNBC "Squawk Box," two days after issuing his highly anticipated annual letter.

"We would be better off with a big mattress in Europe that we just stick all this stuff in, if I could just find a person I trusted to sleep on that mattress," he said. "It distorts everything."

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Buffett reiterated his caution about the Federal Reserve raising rates in the U.S. while most other central banks are lowering rates and pursuing other easy money policies.

The Fed increased rates for the first time in more than nine years in December. At the time, policymakers projected four more hikes in 2016. But with the new year market turmoil, such an aggressive path looks in doubt.

Buffett: We buy more aggressively when stocks drop

Asked whether he's concerned about the stock swoon, Buffett said "not that much" has changed from his viewpoint in the past five months or so because he's a more aggressive buyer of stocks when the market is going down.

"We're almost always a buyer of stocks," he said. "It's hard to think about many months when we weren't a net buyer of stocks."

Buffett reiterated his mantra that it's "crazy" to time the market. "In 10 or 20 or 30 years, I think stocks will be a lot higher then they are now."

He said buying stocks based on what he buys or what any other big investor buys is not a good investment strategy. "A great strategy is just to buy stocks consistently over a lifetime. And not worry too much if they go up or down on any given month or year," Buffett said.

"It's what I tell me wife to do in my will," he continued. She's going to be 90 percent in an index fund. And 10 percent in governments."

Buffett has long-championed buying index funds instead of actively managed funds.

He lost a little ground in the eighth year of his $1 million 10-year wager that an inexpensive plain stock index fund would outperform high-fee hedge funds. But as Fortune Carol Loomis reported in her annual update, Buffett still has a big lead.

"You'd be better off in stocks if you did not get a quote on them. Quotations cause people to do things they wouldn't otherwise [do]," Buffett told CNBC Monday. "Focusing on the prices and where they're going to do is a terrible way to invest in businesses."

Case in point is one of Buffett's big investments, IBM, which has been underperforming over the past 12 months, losing about 18.5 percent. He told CNBC he doesn't think buying IBM stock was a mistake, but it could turn out to be.

Buffett: Business 'a bit softer' than I had thought

Giving investors an idea of his commitment to the market, he said he bought stocks after the Sept. 11 terrorist attacks, and after the 1987 stock market crash. "The country is not going to go away," he said. "The country will grow in value over time."

The billionaire investor said he bets on American business doing well over the long term, though he acknowledged that businesses have been "a bit softer" than they were four to five months ago.

Buffett said low oil prices "without a doubt" are good for consumers, but the benefits at the gas pumps come very slowly, while the capital values in the American oil patch go away immediately.

In his annual letter to Berkshire shareholders, released on Saturday, Buffett dismissed the idea that the U.S. economy would fail to provide a better lifestyle for future generations than it has in the past.

"It's an election year, and candidates can't stop speaking about our country's problems (which, of course, only they can solve)," wrote Buffett, who is supporting Democrat Hillary Clinton.

"[But] babies being born in America today are the luckiest crop in history," he asserted.

— Reuters contributed to this report.