Buffett Watch

  Monday, 26 Feb 2018 | 4:16 PM ET

Apple rides Buffett's praise to a new all-time high share price

Apple shares hit a new all-time high on Tuesday, riding a wave of praise this week from famed investor Warren Buffett.

The stock rose to $180.48 a share in intraday trading, according to FactSet, passing the previous high of $180.10. Shares hit an intraday high of $179.39 in the regular trading session on Monday, just missing the all-time high after Buffett spoke to CNBC.

"Apple has an extraordinary consumer franchise," Buffett told CNBC's "Squawk Box" on Monday following the release of an annual letter to shareholders on Saturday. "I see how strong that ecosystem is, to an extraordinary degree. … You are very, very, very locked in, at least psychologically and mentally, to the product you are using. [IPhone] is a very sticky product."

Buffett added that his firm, Berkshire Hathaway, had bought "more Apple than anything else" over the past year. Apple is now Berkshire Hathaway's second-largest position in terms of market value behind Wells Fargo and ahead of Bank of America, the company said in regulatory filings.

Apple shares have risen about 30 percent over the past year amid early expectations that a slew of customers would upgrade to new models such as the pricey iPhone X. But excitement around Apple has waned slightly, and other big tech names, such as Microsoft and Amazon, have seen faster growth. Nonetheless, Apple remains the largest public company in terms of market capitalization by a wide margin.

— CNBC's Tae Kim contributed to this report.

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  Monday, 26 Feb 2018 | 2:56 PM ET

Warren Buffett wants to lower health-care costs — while eating and investing in junk food

Warren Buffett wants to lower health-care costs, but his fast-food-fueled diet and his food and beverage investments have historically been linked to costlier care.

The Berkshire Hathaway CEO, Amazon's Jeff Bezos and J.P. Morgan Chase's Jamie Dimon announced in January they would partner to cut health-care costs and improve services for their U.S. employees. On Monday, Buffett repeated his now-famous line that health-care spending is a "tapeworm on the economic system" in an interview with CNBC's "Squawk Box."

In a conversation earlier in the morning, the investing legend said he frequents McDonald's, Burger King and occasionally Wendy's. Buffett's Berkshire owns International Dairy Queen and holds stakes in Restaurant Brands International, the parent company of Burger King, as well as Kraft-Heinz and Coca-Cola.

"I think it's a little irrational wanting to improve health care and investing in companies that also produce highly processed, minimally nutritious products that are contributing to, are not the only cause of, but are contributing to a public health epidemic," said Las Vegas-based nutritionist Andy Bellatti.

More than one-third of American adults are obese, according to the Centers for Disease Control and Prevention. Obesity costs the U.S. an estimated $147 billion in medical expenses, according to a study published in Health Affairs in 2009.

Being overweight or obese can contribute to chronic, and costly, conditions such as diabetes and heart disease.

Type 2 diabetes was estimated to cost $245 billion in the U.S. in 2012, including $176 billion for direct medical costs and another $69 billion in indirect costs, according to the American Diabetes Association.

Heart disease costs the U.S. $200 billion every year in health-care services, medications and lost productivity, according to the CDC's National Center for Health Statistics.

Of course, not everyone who drinks a can of Coke or eats a cheeseburger is overweight or obese. But public health advocates have urged people to eat fewer processed foods and drink fewer sugary drinks while boosting consumption of whole foods such as fruits and vegetables.

As for Buffett, he has spoken very publicly about his love for breakfast at McDonald's and his penchant for Cherry Coke.

Buffett wasn't immediately available to comment.

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  Monday, 26 Feb 2018 | 1:58 PM ET

Warren Buffett remembers first meeting Charlie Munger: ‘We were sort of made for each other’

The chairman and vice chairman of Berkshire Hathaway, Warren Buffett and Charlie Munger, are legendary business partners.

And to hear Buffett tell it, the two didn't have to learn to like each other.

"We had dinner together in 1959," says Buffett, speaking to CNBC's "Squawk Box" on Monday, recalling how the two first bonded.

"We went to dinner and in five minutes, Charlie was rolling on the floor laughing at his own jokes — and I do the same thing," says Buffett.

"We knew we were sort of made for each other," adds the Oracle of Omaha.

Though the men both grew up in Omaha, Nebraska, and both worked at Buffett's grandfather's grocery store, they didn't know each other until Munger was 35 and Buffett was 29, according to Buffett.

Today, Munger is 94 and Buffett is 87. Munger is worth almost $2 billion and Buffett is worth $89 billion, according to Forbes.

The wife of a prominent Omaha doctor, who had invested with Buffett and also knew Charlie Munger, first brought the two men together for lunch at the Omaha Club, according to a 2015 piece about the two men in the "Omaha World-Herald." Munger was a lawyer in California, but his father, Alfred, had died and Munger had to return to Omaha to take care of his father's legal practice.

Soon after, Buffett and Munger were both invited to dinner at a local businessman's house. Later the two went for dinner together at Johnny's Dinner. That's the meal where Munger fell on the floor laughing, the "Omaha World-Herald" says, citing Buffett biographer Alice Schroeder.

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  Monday, 26 Feb 2018 | 1:54 PM ET

Buffett's hunting for deals and 'wouldn't rule out owning an entire airline'

Warren Buffett's newfound optimism for the airline industry appears to have grown.

"I wouldn't rule out owning an entire airline," the billionaire investor and Berkshire Hathaway CEO told CNBC.

In an annual letter published on Saturday, Buffett said the company is searching for deals but is struggling to find one for a good price. Airline stocks are trading at lower multiples than the S&P 500.

Buffett surprised investors in 2016 after Berkshire revealed it took stakes in the largest U.S. airlines. Buffett's stakes in American Airlines, Delta Air Lines, United Continental Holdings and Southwest Airlines were worth close to $10 billion based on Friday's closing prices and Berkshire's recently disclosed investments.

Buffett had long shunned airlines and had been so opposed to investing in airlines in the past that he told shareholders in a 2007 note that "if a farsighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favor by shooting Orville down."

But airlines have recently enjoyed a stretch of profitability, helped along by a plunge in fuel prices in mid-2014 and record numbers of travelers who are taking to the skies.

Buffett told CNBC in an interview that the industry may not be out of the woods entirely.

"It's a business that's always subject to someone doing something very dumb, competitively," he said.

The chances of that happening are less now following a decade of mega-mergers, Buffett said.

"The industry was suicidally competitive for decades," he said. Now "it could turn into fierce competitive battles that wipe out earnings or it can be a business that's more decent but still subject to lots of competition. It's really hard to know for sure how it will develop. It's not risk-free."

Indeed, investors are still skittish about fare wars eating into company revenues as they compete with each other. Shares of United sank after the carrier announced plans for annual capacity growth of as much as 6 percent.

It wasn't clear which airline Buffett would purchase, if any. But he did say that the airline business climate allows carriers to form ultra low-cost airlines. Low-cost carriers Spirit Airlines and Allegiant Travel Company each have market capitalizations of around $2.7 billion, compared with the $25 billion market cap of American Airlines and Delta's nearly $39 billion.

Buffett last year told CNBC that many travelers are just focused on price and that they would rather fly for a lower fare than pay more for additional legroom or other perks.

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  Monday, 26 Feb 2018 | 1:30 PM ET

Warren Buffett says he has $116 billion to spend. Here are five companies he should buy

Posted ByLauren Hirsch

Warren Buffett's Berkshire Hathaway wants a deal, but according to Buffett's most recent annual letter to shareholders, it simply can't find one that both fits its criteria and is trading at an affordable valuation.

At year-end last year, Berkshire Hathaway had $116 billion in cash and short-term Treasury bills, the letter revealed.

The letter outlined the kinds of companies Buffett is looking for, a set of criteria that has not digressed much over the past several years. They include: "durable competitive strengths; able and high-grade management; good returns on the net tangible assets required to operate the business; opportunities for internal growth at attractive returns; and, finally, a sensible purchase price.

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About Buffett Watch

  • Warren Buffett is arguably America’s most-admired and most-followed investor. Buffett is the largest shareholder and CEO of Berkshire Hathaway and one of the world’s most famous and most generous philanthropists. Legions of investors - from all walks of life - follow Buffett's homespun investment philosophy: invest in what you know, invest in value. Here on CNBC.com's Warren Buffett Watch, we’ll keep you up to date on what the “Oracle of Omaha” is doing by following Buffett's trades, words and deeds.