CNBC's Claman: Buffett Worried About Trade, Dollar


After the release of his eagerly anticipated annual shareholder letter, Warren Buffett told CNBC’s Liz Claman that he’s deeply concerned about U.S. trade problems and predicts more weakness for the dollar.

“Mr. Buffett told me last night that the longer this goes on, the more severe the moment of truth will be, he also says you don’t know when that moment of truth is coming,” Claman said.

Investors are paying particular attention to this warning from Buffett: “Per capita wealth will increase, but our citizens will also be forced every year to ship a significant portion of their current production abroad merely to service the cost of our huge debtor position.

"It won’t be pleasant to work part of each day to pay for the overconsumption of your ancestors, I believe that at some point in the U.S. the future of the U.S. workers and voters will find this annual “tribute” so onerous there will be a severe political backlash. How that will play out in markets is impossible to predict, but to expect a soft landing seems like wishful thinking.”

Breaking Down Investments

Perhaps the best way to ride out the market rollercoaster is to simply be Buffett.

In his letter, Buffett breaks down Berkshire Hathaway’s major investments, in which the company has a $700-million or more stake. He lists 17 companies, five more than last year. The new ones are Conoco Phillips, Johnson & Johnson,Tesco, U.S. Bancorp and POSCO, a South Korean steel company. Buffet boosted his position in Wealth Fargo and reduced positions in Anheuser-Busch and Ameriprise.

Buffett told Claman Berkshire owns a 4% stake in POSCO and hinted he’s looking closely at South Korea for investment.

“I would take that list of 17 companies, do a fundamental analysis and see where the price of the stock is today and what it’s done over the last three or six months,” Harvey Eisen, chairman of Bedford Oak Partners told Claman on “Morning Call.” “Warren Buffet has done the analysis for you. You should look at those and you should buy that portfolio.”

Looking for Successor

The “Oracle of Omaha” also said he’s looking for honest and able management, particularly someone who can help take over the investment business. Buffett said he’s looking to hire a younger money manager “genetically programmed to recognize and avoid serious risks” and is independent thinker and emotionally stable.

Among the names being circulated: hedge fund manager turned retail CEO Eddie Lampert and GEICO investment chief Lou Simpson.

Regardless of the successor, Buffett watchers say there is only one Buffett.

“He is the greatest investor that has ever lived,” Eisen said.