Buffett’s Letter – 2016

Following is the transcript of a CNBC interview with Warren Buffett on CNBC:

– American dynamism my theme for decades
– US always comes back and wins
– I don’t know anyone who can time markets
– People should buy stock consistently over time
– Interest rates act like a gravity on valuation
– We are not in a bubble territory now
– Stocks are cheap with current interest rates
– If interest rates go up a lot (5-7%), that brings stocks down
– Things are always unpredictable in short term
– Investment decisions has something to do with interest rates
– I want my money in companies, not treasuries
– We bought more Apple since 2017 began
– We haven’t bought Apple post-earning report
– I bought more Apple because I liked it
– Apple has a sticky and useful product
– Tim cook has done a terrific job at Apple
– Apple stake now worth about $17B
– Our stakes in airlines “about the same”
– Airline industry had a bad first century
– Airlines need to operate well over 80% capacity
– Charlie is ok with our airline stakes
– Don’t want to own any chemical common stocks
– I don’t mix politics and investment decisions
– I’ll judge President Trump on safety
– I want to see more people benefit from economy
– US economy will improve under any president
– Border tax would be big tax on consumers
– 3G and I agreed on friendly bid for Unilever
– First bid for Unilever got neutral response
– It was apparent quickly Unilever bid unwelcome
– No intention to do hostile Unilever bid
– No “backup deal” following Unilever
– Unilever is a high quality business
– No big deals close for Berkshire
– I can very easily be wrong
– Self-driving cars could cut Geico profits
– We don’t commit to owning stocks “forever”
– No plans to sell Amex or Coke
– Retailing is an area “too tough for me”
– Many department stores disappeared rapidly
– Bezos may be best manager I’ve ever seen
– NYT, WSJ among few papers that can survive
– Wells Fargo’s mistake was failure to act
– Wells Fargo needed to attack issue immediately
– Get it right, get it fast, get it out and get it over
– Index fund will outperform active managers
– Most money wasted on investment advice
– Retained earnings add value over time

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