Watch CNBC's full interview with Berkshire Hathaway Chair Warren Buffett

0:00 We are sitting down right now with Warren Buffett, the chairman of of Berkshire Hathaway, who for the first time in 60 years has been watching all of this from the audience instead of being on stage. And you know, last year at this time, Warren, you surprised everyone with the announcement that you were stepping down as CEO. Fast forward a year and here we are. What do you think? Well, I think it's all working. It's all working. I It isn't our ideal surrounding area or or environment, I should say, in terms of deploying cash for Berkshire.

0:38 but in terms of how we got the right management. We got the right arrangement and you know, we can pick our spots and and and nobody can tell us what to do exactly and and so sometimes we're doing nothing, but other other times we get quite active. I mean You know, a G spent some time on the stage today talking about how one of his keys is to do nothing when it comes to insurance, when it comes to writing insurance, which is the same thing that you have always talked about with whether to invest or not.

1:15 >> Yeah. The world is full of people that are offering you things to do. And then the question is to find find one that, you know, makes sense. And there may be 20,000 that make sense that you don't understand and you just leave them alone. You You said that the world or the surrounding environment is not ideal and I guess that points to the idea that there's almost $400 billion in cash on hand. Although Greg took some pains to show it it's really more like $380 billion in cash on hand.

1:44 But that there's a lot of cash on hand and you're still active in managing the portfolio too and looking at stocks. You're looking around and you don't see a lot that you want to invest in. >> No. Well then we don't do anything. I mean, we've better than of the 60 years I've been in the business, you know, there's probably five of them been really juicy. You know, and I think it was Tom Watson senior at IBM that said they asked him the reason why IBM had been so successful or something like that. And he said, "I'm smart at spots and I stay around those spots."

2:27 And that's that's the whole thing. And IBM was in three different businesses including time clocks and a couple of and two of the three turned out to be no good, but >> >> so they just focused on the one. What what is it when you look around that it's just prices are too high at this point? I I would imagine there are Greg said this from the stage too. There are businesses that you like just not at these prices.

2:53 >> I would say I understand fewer of the businesses as a percentage of the whole than I did 10 years ago. I have not learned new industries for some years, you know, and and so I don't kid myself on that. I'm I'm not going to learn I'm not going to have an edge on you know, a whole bunch of younger people that have actually grown up with them, used the product, seen things but it well as I mentioned, you know, you don't have to understand too many of them like Apple.

3:36 But looking around, let's just get some macro thoughts on this because I don't know that this is something that that Greg is going to comment on per se. Just looking at the macro stock market environment. What does this feel like to you? Is does it feel expensive? Does it feel like there are opportunities in some places? >> feels like you know, I've I've compared it the market to a one church with a casino attached. And and people can move between the church and casino and and I would say there are more people in the church and more people in the casino.

4:11 But the casino's gotten very attractive to people. If you're buying one-day options or selling them I mean, that is that's not investing, it's not speculating, it's gambling. I mean, just totally. There's nobody that can explain why they're buying an option for one day unless I may maybe maybe they follow that that you know, made the $400,000 from knowing when we were going into Berkshire Hathaway and doing it. But I mean, that's pretty and the quantity of those things is just incredible. So, we've never had people in a more gambling mood than now. But that doesn't mean that investing is terrible. It doesn't mean that that prices for an awful lot of things will look very solid. I mean, they you know, they had a squeeze and and then and Avis has some old things. Well, Avis has been around for 50 years, but just this past week and we have lots more regulation and everything now, but but people spend their time figuring out how to get around the rules rather than follow the rules.

5:28 That's just a challenge. The type of investor you are though is is you laid it out yourself. In the 60 years you've been doing this in the business, you've had maybe five juicy years. I guess that means you're always looking for the next juicy year. What do you think it would take to make a juicy year or a juicy opportunity for you? It's a phone call in many in some cases. You know, we we bought a business last year. It wasn't It wasn't big enough to be mean meanable, we got a letter. Bell Labs?

6:00 Yeah, Bell Labs. And and you know, and and sometimes there's more zeros attached to them than others and and we're big enough to handle anything and we can make decisions faster and than anybody and our word is good. but there's an awful lot of people that they're when they they're in the business of reselling something or you know, it's and it's a lot better if you're a good sales person there's no reason to be selling vacuum cleaners or you know as well sell stock, you'll make way more money.

6:42 It's where the money is. And there's and there's more money around than ever and you know But the best opportunities have probably come when the macro environment >> That's the most likely, yeah. Well, the most likely time to buy things is when nobody else will answer their phones. You know, everybody else talks about their wonderful trading departments and everything. Just try them out sometime when markets are collapsing, they don't answer the phones.

7:12 And and if they do, the the bids are subject and the offers are subject and the spread is wide and then and they'll use the information they get from you about what you want to do to go out and kill you some other way. I mean, it it's it's it's really like going through a slaughterhouse. I mean, you know you don't feel like eating hot dogs for a while. >> >> I guess what I'm trying to get at is do you see the circumstances building up anywhere that could lead to a time like that again? Is any any sort of panic in the market?

7:44 >> Sure. Where do you see them? >> Well, if you saw them as they wouldn't happen. Okay. I mean, you've got all kind You don't worry about what what what people are talking about can happen. it's it's something that comes out of the blue. But something will come out of the blue. Yeah. I mean, a >> >> a nuclear bomb could come out of the blue. You know. Well, let's knock on wood on that. >> >> Well, well, I it doesn't do any good to knock on wood. That's It's It's that's the point. Yeah. It you know, it was the Archduke getting shot, you know, in the 1914 or something like that in World War one and I it it's just take everything in life.

8:30 And it if it if something people are talking about and thinking about, it's not going to happen. Yeah. It but there are things that can happen out of the blue. And actually that's particularly true to use that phraseology now because the things that can come out of the sky that you know we don't know what can happen tomorrow. I mean, I don't like to talk that way to the people, but but it's you or anybody else. I mean, cuz I don't whether it does you a lot of good to worry about that. I don't think it does you any good to to worry about it.

9:14 I think it's it's good to be cognizant of it. But worrying about it is terrible and I don't like to I don't like to even cause that belief with people. I don't like to go around Yeah. >> telling them the end is coming, the end is coming or something like that. A friend told me yesterday he's recently started using the phrase, "I don't fret. I don't worry." And that's probably a good way to go about life. But let let's talk about some of the issues that are out there right now.

9:40 inflation is up. That's an issue. So, how does Berkshire how does Berkshire handle that with its businesses? >> Well, we can't handle runaway inflation except not to be there in the way of it and if you look at the number of countries that run away inflation since World War II in my lifetime. It's very large. Yeah, and and Once you create that, it it becomes a different world and You know, Germany obviously experienced that after World War I. But but there are dozens and dozens of countries that have experienced it. And of course you have you have countries that have gone bankrupt like six or seven times. I mean it's >> >> it's It's just amazing what people do. But in financial markets.

10:36 What about the inflation that we're dealing with right now, which is, you know, not excessive. It's north of 3% at this point, but we're not even back at the levels we were during COVID. >> 8 to 9%. So, what about just higher energy prices, how that works through the line, and how you handle it? >> Well, it came close before Volcker. I mean it was just it was cash is trash, you know, and people were losing faith in the currency, and they felt they could borrow and 12% earn 6% on on farming or something like that. And they they had a huge farmers in this state, Nebraska, collapsed because they bought beyond the earning power of their paid interest rates beyond the earning power just cuz they felt that that that the dollar was going to disappear and the the land wouldn't disappear and it's it's it's tragic for many people and and and If you're the best doctor in town or the best lawyer in town, you'll always make money under any choice.

11:49 The best the best TV personality. I mean it's it's but What Not having faith in the money does to a country. It it turns it into something else. Yeah. And I You know, I've always hoped that you know, the US never does it, but we are not immune from that happening. We have a lot of control over whether rates may go up a half a point or down a half a point, but but we may have less control over whether they go up 50 points.

12:26 >> >> You've long been a supporter of Jay Powell's. Exactly. >> He had his last FOMC meeting as chairman just this last week. He did say that he's going to be sticking around, staying on the Fed, staying in that position for the foreseeable future in part because of the threats that he's faced. I'll feel better when he's there. when he's not. I mean it it No, I just felt better when Volcker was there.

13:01 But you it's It kind of almost sunk the best in this sort of thing. You know, you read any old economics book from 1950 or 1970, it was that Paul Samuelson, who was a terrific guy, and smart as hell. He had the standard textbook for 25 years and if you looked up, you know, zero interest rates and year after year after year, it was a 900-page book and there wasn't an entry for it. You know, I mean it was the most important economic development. I mean in terms of the impact it would have and everything during the lifetime of the students reading it. But It's what you don't think of that that does all the damage.

13:55 Let's talk a little bit about CEOs and some of the Berkshire holdings. You mentioned Apple's Tim Cook and just the phenomenal job you think he's done. Incredible. he's not the only one of your major holding CEOs who stepped down. James Quincey recently stepped down from Coca-Cola, too. And we just spoke with Vicki Hollub, who announced that she is retiring and stepping down from that position at Occidental. part of what Greg's talked about is how stable that portfolio is. And and these holdings are companies that he knows and managers that he >> >> that he knows. There's going to be some new managers in some of those major holdings coming in. Is that a problem?

14:33 Well, it was certainly a problem at Coca-Cola there for a good many years when I was around the company. I mean sure, it's it's And you have the most problems with with with a really good company because it'll it'll it'll it'll continue. I mean if you're selling some product that people are buying every day, you you can make the wrong decision for a long time. But that's one of the problems with investing. That Tim Cook I I I felt was very very good from the start. And and our most of our managers are very good at the smaller problems.

15:21 Like they can't anticipate the the over looming problems. That's that's that's my job or now Greg's job. Do you feel good about those holdings still? Have you met any of the new managers? I I haven't met the old manager. >> >> Of the new businesses of the new CEOs that are coming in, Tim Cook's replacement >> know, and Luke at Coca-Cola. >> met the people at the at the labs that we Yeah. Yeah, I'm you know, and obviously I met Vicki. We made the deal.

15:55 And so I I enjoy meeting the people and But you can make mistakes with people. I mean look at the divorce rate. You know, that's that's more important than whether you got the right CEO or anything else. And and now you've got years of trial. I mean back when I was young, you had you had to make the decision. You know, or you didn't have to make the decision, but a good many people made the decision when they were 20 or 21. To get married. Yeah, they got married.

16:25 >> Yeah. Now they they they spend five years, they still make the same mistakes. >> >> So, you think we're getting worse at our judgment as we >> Well, I don't know. And maybe the people behave differently before the marriage than after. Who knows exactly. I would say that almost everybody feels either the marriage is better or worse than they anticipated a month after they were married. >> >> But I don't know which. Warren, let's talk a little bit about deep fakes because the deep fake Warren that popped up early in this session was pretty good. they had somebody standing up, you know, Greg was joking about it, but you know, the first the first question went to a guy from Warren up in the rafters who lives in Omaha.

17:14 you've been concerned about some of these AI deep fakes and what that means for the world. >> Yeah, I would I would be concerned if everybody was Well, actually the worst thing would be to have a a a a a really good imitator of any president that came along. I mean just imagine. Well, yeah, we had that famous thing before. Way back in in New Jersey where they the Martians coming and everything like that. >> Oh, War of the Worlds with Orson Welles.

17:43 >> But what you what you can do Well, if you convince black people to lend you money that they shouldn't you shouldn't be borrowing it. I mean it's it's scary. And it's it's particularly scary when you have nine countries or so with the nuclear weapons and and people working on in something even more We haven't dealt with this. We don't know what's going to happen.

18:14 Yeah. Let's circle back to Berkshire and the Berkshire of today. I think I was speaking with you yesterday or the day before and we were talking a little bit about Greg Abel and what a nice guy he is. And you said >> terrific guy. You said something interesting to me, though, about how you picked him and it wasn't because he was a nice guy. Why did you pick him? Well, he's very very very smart about businesses. Incidentally, he's getting his Canadian I mean he's getting his American citizenship here very soon and he was going over with me all the things he had to learn about and I've actually spent a little time in the past with groups of individuals. Of course my wife did did it till became an American citizenship an American citizen.

19:02 And the things they have to learn about the Constitution and all this and they're usually so proud when they become American citizens. And I think I I think I detected in Greg even. I mean you know, there's the successful he's been and everything else. I mean he is it means something to him to become an American citizen. And you know, and he's a civil this his young son, you know, and the son knows more about some of the answers to the questions, you know, that he may get asked or something about becoming a citizen. It's it's really interesting.

19:41 And where else does that happen in the world? I mean where people you know, that that America's special. And and it's it's a miracle what America's accomplished. I mean, it's just an absolute miracle. And yet the miracle the division of the of of the output and everything is about as inequitable as it you could come up with, while at the same time it's got these great attractions. There is some secret sauce.

20:20 I've never been able to define it precisely, but when you run a country for 200 and some years and people want to come here every year, I mean there's there's be something about it. And when Greg Abel is very you know, is looking forward to becoming an American citizen that means something to him. And you can't buy that any place. They're packaging or you know, won't work for a Madison Avenue approach approach, you know, being American or something like that.

20:54 But that that feeling just goes up in my 95 years. I've I've seen it you know, time after time. So I felt I felt good when I Greg just volunteered that in the last day or two to me that he was he's up there for his final exams here pretty soon becoming a citizen. >> I didn't realize he wasn't a dual citizen already. I knew he was Canadian, but I thought he had dual citizenship. >> have a full whatever the complete citizenship requirement is. And and you can say why does he care? I mean, he's gotten along fine with others here and everything. He still wants to be a citizen. Yeah.

21:31 250 years we're celebrating our 250th anniversary. you pointed out that you've been around for 95 of them. Do you think we have the special sauce that that will continue in this country or what do we need to do to preserve that and make sure that it does continue? We've got a special sauce. There's that's a secret sauce. It's such a good secret that I don't know what exactly it is. But I do know this that that anybody that has a choice would choose to be in born in America. I mean, you know, you can pick some very small little countries that are very happy that they're but this is is there any other country that everybody's couple hundred years has wanted to emigrate to? I mean, it it and it attracted some terrible people, you know, too, but but it worked.

22:29 And they had the mafias from the different groups. I'm not not just the Italian mafia, but all I mean, it it wasn't that they were all we had some system for picking out the the wonderful people from some other countries. But it has it has worked, but it's worked the extremes to which it works. don't seem to belong to that kind of a society. I mean, if you were drawing up dreams for the ideal society and you would have this kind of GDP per capita and everything you wouldn't design you wouldn't design the you wouldn't design the inheritances laws. You wouldn't I mean, you'd just do all kinds of things differently, but somehow it's worked.

23:20 But that doesn't mean that we can't do better. I mean, at all. You know, Warren, there are thousands of people, shareholders and partners of yours for decades in some cases, who are sitting out in this arena right now. And I just wonder if there's a message you'd like to give to them. those who've been following you for years and who've been partners of yours for years. The number one rule of government is just that that that giving the golden rule.

23:53 Do unto others as you I'm not a religious guy, but I mean nobody's said it any better than than than in a couple thousand years than that. Which may be why it's lasted that to a certain degree, too. I mean, that you know more people are reading a 2,000-year-old book about how to behave than anything that anybody's coming up with lately. Now, it's got a lot of pretty the Old Testament's got different kinds of stories to some extent. But if the whole world lived by the golden rule, it would be such a more wonderful society. Do unto others as you'd have them do unto you.

24:39 >> Yeah. And that's true for everything from parenthood to being a boss to being all I mean, just everything in life. And it doesn't cost you anything. In fact, it it it it's reflected in better behavior toward you. So I mean, it's a very selfish sort of thing in a in one sense. But I've never seen anybody that's unhappy that behaves that way. They and I've seen a lot of people in a lot of different kinds of situations.

25:14 Warren, I want to thank you for taking this time to sit down with us today. Warren Buffett the chairman of Berkshire Hathaway. Greg Abel is going to be taking the stage in just a moment and you will see more from him in just a moment.