(In Feb 27 item, corrects headline and first paragraph after
CNBC transcript of Buffett interview shows size of Berkshire
Hathaway's 2017 share purchase was "70 million plus" shares, not
By Sam Forgione
NEW YORK Feb 27 Warren Buffett, chairman and
chief executive of Berkshire Hathaway Inc, told CNBC on
Monday that his conglomerate had purchased "70 million plus"
shares of Apple Inc in 2017 and that U.S. stocks were
not in "bubble territory."
"Apple strikes me as having quite a sticky product and an
enormously useful product to people that use it, not that I do,"
Buffett said. He said Berkshire's Apple stake, at 133 million
shares, was worth about $17 billion and amounted to Berkshire's
Apple Chief Executive Tim Cook had done a "terrific job,"
Buffett said, but added he had not bought shares since the
company's earnings report.
Berkshire revealed in its annual report on Saturday that its
massive stake in Apple stock, as of Dec. 31, had risen to 61.2
million shares for a total of $6.75 billion.
Buffett, who told the cable television network that
Berkshire had spent about $20 billion on stocks since just
before the Nov. 8 U.S. election, also said the U.S. stock market
was cheap with interest rates at current levels.
Benchmark 10-year U.S. Treasury notes last
yielded 2.333 percent in morning U.S. trading.
The billionaire investor said it was extremely difficult to
attempt to find a floor in stock prices and that he did not know
what would happen in the near term in the equity market.
He said U.S. shares could conceivably "go down 20 percent
Buffett said Berkshire's positions in airlines remained
unchanged. He said pricing shares of airlines has historically
been a "very tough game" and he had never met the chief
executives of the four airlines in which Berkshire holds stakes.
Berkshire reported a $9.3 billion airline stake at the end
of Dec. 31, according to Securities and Exchange Commission
filings, with investments topping $2.1 billion in each of
American Airlines Group Inc, Delta Air Lines Inc
, Southwest Airlines Co and United Continental
Buffett, who was a vocal supporter of Democratic
presidential candidate Hillary Clinton, said he would judge U.S.
President Donald Trump based on how safe the country is in four
years. He said he would also judge the Republican president
according to how the U.S. economy performs overall and how wide
participation in a better economy extends.
Despite his disagreement with some of Trump's policies,
Buffett said the U.S. economy would be better off in four years
under any president. He said that U.S. Secretary of State Rex
Tillerson made "a lot of sense."
On Kraft Heinz's snubbed bid for Unilever,
Buffett said it was never intended to be a hostile offer and
that there was not a "backup deal." Berkshire is a key investor
in Kraft Heinz.
"Will there be another deal at Kraft Heinz some day? My
guess is yes, but who knows when, I mean, there’s no backup
deal, and again, it would have to be friendly and frankly, the
prices in that field make it very, very, very tough to make an
Asked about Berkshire's $86 billion cash pile, he said the
conglomerate was "always looking" for acquisitions but that
there was "nothing close."
Buffett said it was enormously important for the U.S.
economy to have 30-year government-guaranteed mortgages, but
that mortgage giants Fannie Mae and Freddie Mac
were not necessary in order to accomplish that.
On 30-year U.S. Treasury bonds, Buffett said: "It absolutely
baffles me who buys the 30-year bond" and that doing so was not
sensible at current yields. U.S. 30-year government bonds
last yielded 2.964 percent.
Buffett reiterated that Americans are better off buying
plain-vanilla index funds than committing money to active
managers. He added that the hedge fund industry's standard fee
structure of 2 percent of assets and 20 percent of investment
gains "borders on obscene."
In an annual letter to shareholders on Saturday, Buffett
slammed fee-hungry investment managers: "When trillions of
dollars are managed by Wall Streeters charging high fees, it
will usually be the managers who reap outsized profits, not the
Buffett praised Amazon Chief Executive Jeff Bezos as
possibly the best manager he had ever seen and said Berkshire
"missed big time" by not purchasing Amazon shares early
on. Buffett said the U.S. economy was doing "terrific," even at
just 2 percent growth per year.
(Editing by Jennifer Ablan and Bernadette Baum)