Инвестиции на Бъфет вдигат залога в полза на САЩ
Berkshire Hathaway е закупила акции в ExxonMobil и Nestlé и почти е удвоила участието си в Walmart
18.11.2009
Berkshire е придобила над 87 000 акции на Exxon, най-големия петролен производител в света. На снимката: нейна бензиностанция в Бруклин.


Снимка: ЕПА-БГНЕС

Джъстин Баер

Berkshire Hathaway е закупила акции в ExxonMobil и Nestlé и почти е удвоила дяла си в Walmart в инвестиционен набег, който се тълкува като израз на все по-силната вяра на Уорън Бъфет в икономическото възстановяване на САЩ. Интересно е и какво говори този негов ход за бъдещите цени на енергията.
Всичките инвестиции са направени в тримесечието, което приключи на 30 септември, и детайлите по тях бяха разкрити в съответните доклади за борсовите регулатори. Те предсказват и стъпката на Бъфет по-малко от два месеца по-късно, с която той се втурна в най-мощната сделка в кариерата си – покупката на един от най-големите американски жп оператори Burlington Northern Santa Fe за $26,6 млрд.
Бъфет следва прогнозите си, които сподели и в редакционен коментар за “Ню Йорк таймс” през октомври миналата година, че акциите ще се представят по-добре от валутите през следващото десетилетие. Оттогава насам индексът Standard & Poor’s 500 се покачи с 10%.
„Стойността на повечето валути, включително американската, ще се понижи, измервана в покупателна сила - заяви Бъфет пред „Файненшъл таймс“ този месец. - Все още мисля, че след 10 години бих искал да притежавам акции, вместо пари в брой.“
Изявлението му от октомври 2008 г. впечатли някои инвеститори, които го сметнаха за подранила прогноза за скок на фондовите пазари, но сега тези му думи изглеждат доста далновидни. 
Счетоводната стойност на акция на Berkshire, т.е. общите активи минус нематериалните активи и пасиви, се покачи с 10% през последните три месеца и е с 15,2% по-висока от началото на годината. Този скок се дължи преди всичко на покачването в стойността на огромния й портфейл с акции. Миналата година стойността на компанията падна с 9,6%, което е най-резкият годишен спад при управлението на Бъфет. Акциите й от клас А се сринаха, след като кризата потисна печалбите й и инвеститорите се разтревожиха за дериватите, притежавани от Бъфет, но по-късно се възстановиха. 
Berkshire е холдингова компания, която е под контрола на Бъфет от 1965 г. Тя е закупила над 87 000 акции на Exxon, най-големия петролен производител в света, и 3,4 млн. американски депозитарни разписки (ADR) в Nestle. Участието на Berkshire в Walmart се равнява на общо 38 млн. акции в края на третото тримесечие, което е ръст от 90% спрямо юнския отчет. Делът се оценява на над $1,8 млрд. по цени към септември. Базираният в Омаха холдинг е придобил и акции в Republic Services и в застрахователя Travelers. 
Нетните приходи на Berkshire са се утроили до $3,24 млрд. през третото тримесечие, подпомогнати от засилените резултати от фондовите пазари и дериватите. Berkshire е регистрирала над $1,1 млрд. осчетоводени печалби по дериватите за тримесечието. Те идват предимно от портфейла със суапове за осигуряване срещу кредитен риск на стойност над $30 млрд., чиято стойност се покачи, след като оптимистичните пазари свалиха вероятността холдингът да трябва да се разплаща по инструментите си от застрахователен вид. Оперативните бизнеси на Berkshire, които се простират от застраховане до корпоративни самолети, са регистрирали печалба от $2 млрд. през третото тримесечие като продължение на тенденцията от предишните три месеца.

Wednesday, Sep. 24, 2008

It's a little like saving sex for your old age.
WARREN BUFFETT,
who is investing $5 billion in Goldman Sachs Group Inc., on why he prefers to buy companies instead of conserve his cash

The Dangerous Temptation of Super-Cheap Stocks
Thursday, Oct. 23, 2008

Benjamin Graham was well prepared for the Crash of 1929. The now legendary investor had hedged his bets: he would buy preferred stock in a company and sell short common stock in the same company. When stocks crashed in October 1929, common shares fell much faster than preferreds, and Graham made a lot of money off short sales. 

But after the crash, most of those preferred shares seemed so cheap that Graham couldn't bear to part with them, he wrote in his memoirs. They kept falling, and his profit soon turned to a loss. His fund (equivalent to a modern hedge fund) ended the year down 20%. In 1930 it dropped 50.5%; in 1931 16%; in 1932 3%. "The stock market," as Graham resignedly put it in the first edition of his book with David Dodd, Security Analysis (1934), "is a voting machine rather than weighing machine." 

It had actually begun voting along with Graham by then — his fund gained 50% in 1933, and he did spectacularly well for himself in the next two decades. "In the short run, the market is a voting machine," he later took to saying, "but in the long run, it is a weighing machine." Over time, Graham's strategy of buying stocks that seemed inexpensive relative to a company's underlying assets and earnings really was (and presumably still is) a profitable strategy. But for months and even years on end, cheap stocks are perfectly capable of getting cheaper. 

It's an important lesson to remember these days. Stock prices have dropped a lot, so stocks look a whole lot cheaper than they were just a couple of months ago. By some — but certainly not all — measures they even look cheap in historical terms. But that's no guarantee prices won't keep dropping.
So while some value investors, most notably Graham's protégé Warren Buffett, have recently announced that they're in a buying mood, that's not necessarily a signal that the market has bottomed out. 

Buffett's most famous market pronouncement came in October 1974, when he told Forbes that, with the S&P 500 down in the low 60s after peaking at 120 the year before, he felt "like an oversexed guy in a whorehouse. This is the time to start investing." (The quote is from Roger Lowenstein's Buffett. In print, Forbes changed "whorehouse" to "harem.") That actually was pretty well timed — the market rebounded sharply in 1975. Then it dropped again, and the long secular bear market that had begun in 1965 didn't end until 1982. Buffett made tons of money in the second half of the 1970s — because he was a really smart investor and because he'd set up his investment vehicle, Berkshire Hathaway, as a self-funded enterprise that didn't rely on cash from (and thus didn't have to respond to the whims of) outside investors. But the S&P 500 was, when adjusted for the double-digit inflation of those days, actually lower in mid-1982 than when Buffett spoke out in October 1974. 

Add in dividends — the yield on the S&P 500 was 5.43% in 1974; it's just over 3% now — and stock-market investors came out modestly in the black over that stretch. They would have done much better, though, putting their money in gold or real estate or baseball cards. Then again, most of the gold bugs and baseball fans probably missed out on the market's great turn in 1982. Buffett and his fellow value investors did not.

We appear to be eight years into another of those long, secular bear markets like the one from 1965 to 1982, or 1929 to 1949. If you're looking for a bottom, an end to the pain, you're very likely to be disappointed. "Bear markets behave rather like Lucy in the Peanuts cartoon strip," Phil Coggan writes in this week's Economist. "Just when Charlie Brown is persuaded to attempt to kick the football, she snatches it away." 

The corporations whose shares trade on the stock market today are for the most part valuable entities, and the employees of many of them will find ways to make them even more valuable in the future — something that cannot be said of gold or real estate or baseball cards, which is why stocks can be expected to outperform all of those assets over time. It stands to reason that it's better to buy into stocks at today's prices than at those that prevailed a year ago. But it's also possible that they'll be even cheaper next year.

Another Bad-News Bear?
 Monday, Jun. 27, 2005

Warren Buffett may be the greatest investor ever. But his long-term philosophy, which was ridiculed as he avoided the dotcom boom--and vindicated as he avoided the bust--is being scrutinized once more. The buy-and-hold billionaire is up to his ears in exotic investments known as derivatives, which are used to bet on things like the weather and the direction of interest rates. Derivatives were at the core of the 1994 bankruptcy of California's Orange County and the 1998 demise of hedge fund Long-Term Capital Management. Buffett once called derivatives "financial weapons of mass destruction," so you'd think he would steer clear. But his company, Berkshire Hathaway, has acknowledged a $307 million pretax loss in the first three months of this year that's due to a $21.4 billion position in "currency contracts," which are derivatives that hit pay dirt when the dollar falls. Problem is, the dollar is rallying. The greenback--up 4% against the euro in the first quarter and an additional 8% since then--shows no signs of stalling, and Jim Bianco of Bianco Research estimates that Buffett's losses this year have surpassed $1 billion. 

Sweden surprised the world last week by cutting interest rates, which could trigger rate cuts throughout Europe and a falling euro. Yet Buffett has indicated that he's sticking with his bet. "There's no change in the underlying factors affecting currencies," he said, adding that in the long run, the U.S. trade deficit must weaken the buck. It's not all bad news for Buffett fans. He first bet against the dollar as it was falling in 2002 and remains in the money overall. But with his gains eroding, dreaded derivatives may claim the biggest victim yet.

ANNUAL REPORTS: The Best of Buffett

1991

Pssssst! Wanna look at the hottest read in town? Then snap up a copy of . . . the Berkshire Hathaway Inc. annual report. While the title suggests a pastiche of dry statistics and commercial puffery, connoisseurs of corporate entertainment eagerly await each year's version -- particularly the plain- spoken chairman's letter, written by superinvestor Warren Buffett. In the Omaha-based holding company's 1990 edition, released last month, the author quotes such thinkers as Woody Allen, Bertrand Russell and Buffett's four-year- old granddaughter Emily, while characteristically mocking his own financial acumen.

"Your Chairman displayed exquisite timing," he writes about his purchase of a large stake in USAir. "I plunged into the business at almost the exact moment that it ran into severe problems." Buffett also notes his purchase since late 1989 of $440 million of RJR Nabisco junk bonds. A crazy investment? He acknowledges that he's leery of new issues of junk bonds ("The only time to buy these is on a day with no y in it"), but the RJR bonds have been traded for a while -- and Buffett says their market value has increased $150 million since he bought them.

Comeback Crusader
Monday, Mar. 10, 2003

During investment banker Herb Allen's annual gathering for media moguls in Sun Valley, Idaho, last July--when locals were paid $20 an hour just to be available for baby sitting--Coca-Cola CEO Douglas Daft at one point turned for advice to investment legend Warren Buffett, who sits on Coke's board.

What would happen, Daft wondered, if Coke suddenly stopped giving Wall Street quarterly earnings estimates?

Buffett answered that Coke's shares would be more volatile and some investors would sell but that these were prices worth paying.

Daft would forever "be free from that fiction," Buffett said, according to someone close to both men, and better able to focus on long-term goals.

That did it for Daft.

This past December, Coke made it official: no more advance earnings estimates.

A month later, McDonald's followed suit, and a few days after that, AT&T made it a trend.

People are listening to the Sage of Omaha again.

The man whom many consider to be the greatest investor of all time--Buffett once raised $210,000 at a charity auction for his 20-year-old wallet, with a stock tip inside--fell into disfavor in the late '90s.

He was criticized for avoiding tech shares when they were soaring, and for clinging to big positions in stocks like Coke and Gillette after they had peaked and were driving down the market value of his company, Berkshire Hathaway.

But now Buffett, 72, is on a comeback. By avoiding fads and sticking to what he knows, the Nebraska native is finding ways to make money in a bear market that has ravaged many fortunes.

His long-held stake in the Washington Post Co. has sparkled during the market downturn, and over the 30 years that Buffett has owned the stock he has turned an $11 million investment into $1.2 billion.

More recently, he has been snapping up steady cash-producing private businesses like kitchen retailer The Pampered Chef.

Beyond adding to a personal wealth estimated at $30.5 billion--second only to Bill Gates'--Buffett is a man on a mission.

He has been agitating for publicly traded companies to clean up their management, and this Saturday he will take that crusade up several notches in his eagerly anticipated annual letter to shareholders.

Long a must-read among investors and executives, Buffett's folksy, insightful yearly musings on business and finance carry added credibility today, thanks to his early warnings about the dangers of overpriced stocks, gimmicky accounting and other new-era traps.

Much of Buffett's letter, to be released on his firm's website (berkshirehathaway. com), will expound on corporate reforms needed in the wake of scandals at the likes of Enron, Tyco and WorldCom.

He will probably urge that boards hire independent directors who will ask tough questions and curb excessive executive pay.

He will call on CEOs to focus more on the long term and provide investors with clear, complete and timely information.

 
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Buffett will touch on what has long made his letter popular: how he is deploying Berkshire's $75 billion investment portfolio. He's less interested than he used to be in common stocks;

he apparently finds their prices too high.

Instead he's dabbling in junk bonds and acquiring private assets that range from apparel makers to gas pipelines.

Buffett's book is no longer the model it once was: the investments he favors these days--specially constructed bonds and convertible preferred stock and private companies--aren't available to most investors.

But they offer a clue as to how he views the investment landscape.

Most investors will appreciate Buffett's generalship of the battle for stronger measures to restore corner-office accountability and stock-market confidence.

His penchant for keeping things simple is legendary, and the need for reform remains acute.

Just last week two former executives at Kmart were charged with manipulating earnings (their lawyer says the prosecution is "wrong and unjust"), while Dutch retailer Ahold owned up to faulty bookkeeping at a U.S. subsidiary and restated the past two years' earnings, slashing them $500 million. 

The last time Buffett took on "corporate governance" was in his 1993 report, in which he focused on the need for companies to hire outside directors for their business savvy, not "because they are prominent or add diversity," and asserted that directors must have the spine to root out unethical behavior and take their concerns directly to shareholders--or resign, if entrenched directors balk. 

His biggest impact, though, has come fairly recently.

A good example is Wall Street earnings guidance, the issue on which Coke just got real.

Some 95% of public companies still provide guidance.

But in part because of Buffett's stand, the trickle of dissenters is growing.

A cynic might note that this trickle consists mainly of companies that have struggled in recent years.

Mickey D's, Ma Bell and Coke may simply be taking Mother's advice: If you can't say something nice, say nothing at all.

But others are sure to fall in line.

Buffett has long asserted that spoon-feeding analysts quarterly guidance puts undue focus on short-term results and leads companies to avoid prudent risks that probably would pay off over time. 

Stock options are another Buffett hot button. While that Sun Valley conference was under way last summer, Coke's board voted to begin treating the options it grants to executives and other employees as an expense that reduces reported earnings--which is how Buffett and increasingly others say they ought to be accounted for. Coke was just the third large company to make the change, preceded years earlier by Boeing and Winn-Dixie Stores.

Since Coke made the move, about 150 others have piled on.

The Financial Accounting Standards Board is widely expected to begin requiring such treatment of stock options within a year or two.

Buffett "is so sound and so right about so many issues that eventually people catch up to what he's been saying," says Barry Diller, CEO of USA Interactive and a fellow director with Buffett on the boards of both Coke and Washington Post.

As in his investing, Buffett sticks to his principles even during periods when they're unpopular, and expects to be proved correct in the long run. Then others follow.
 
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Buffett is in fashion today--but that wasn't the case just a few years ago.

In December 1999--about the same time Buffett presciently warned in FORTUNE that stock-market returns were on the verge of a dramatic and long-lasting slowdown--a writer at Barron's stated what many were thinking: "Warren Buffett may be losing his magic touch."

As the Internet craze mounted through the '90s, Buffett had become a renowned technophobe.

But consider this feat: during the past three grueling bear-market years, Berkshire stock has soared nearly 40%.

Those remarkable returns came during a period when hundreds of companies went bankrupt and millions of investors, including honchos like Bernie Ebbers at WorldCom, were wiped out.

Buffett's investing savvy during those hard years has made his giant insurance businesses, Geico and General Re, the envy of their industry.

While other insurers have lost billions investing the premium payments they receive, Berkshire's insurance units have benefited from Buffett's deft hand.

For example, he got General Re to dump all its stocks before Berkshire bought the company in December 1998, ahead of the market's collapse.

Now Geico and General Re have deep enough pockets to ride out the insurance industry's famously volatile cycles and capture more business in the long term as struggling firms fall away.

"Over the past 18 months he's put his insurance business in a great position," says Thomas Russo, a money manager, long-time Buffett watcher and Berkshire shareholder at Gardner Russo & Gardner.

"He alone has the capital, and I don't think Berkshire's stock price reflects that yet." 

Buffett's influence over the influential is what gives his views so much currency.

His position on an issue inspires strategy in places where he holds no board seat or investment stake.

Look again at the earnings-guidance issue.

Daft sought out Buffett.

McDonald's made its announcement after CEO Jim Cantalupo had turned to one of his advisers--Don Keough, a former long-time Coke executive and FOB (Friend of Buffett). Keough had adopted Buffett's view.

On the question of expensing stock options, Cathleen Black, president of Hearst Magazines, who sits with Buffett on the Coke board, has broached the idea at IBM, another firm at which she serves as a director.

Diller says he intends to stop granting stock options altogether and look for another incentive plan.

Doris Christopher, who sold The Pampered Chef to Berkshire, says she has been captivated by Buffett's willingness to lose money in the short run to preserve a firm's reputation--like, say, eating the cost of shipping a product express after a customer has had it on back order.

She advocates that approach at three nonprofit groups at which she is on the board.
 
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Buffett declined to be interviewed for this story lest, he says, he be besieged by follow-up media requests.

No time for all that while he's hard at work saving American business from itself.

Yet he doesn't view himself as any sort of caped crusader.

"I've never seen him try to push an agenda," says Black.

Buffett's efforts tend to be understated.

But now that he's becoming more vocal about his beliefs, he can expect more opposition.

In an op-ed article in the Wall Street Journal, Harvey Golub, a director at Dow Jones and former CEO of American Express, has already argued that stock options should not be regarded as an expense on a company's books.

Intel chairman Andy Grove spoke for much of the tech world last September when he told the Conference Board that "stock options are a red herring.

The real issue is excessive compensation for executives. [Expensing options] will not be an effective deterrent to abuse."

Meanwhile, many investors who can't afford to hold a stock forever value quarterly guidance because it helps prevent nasty profits surprises that can whipsaw a stock's price.

Somewhat lost on Buffett's new stage of influence is the plight of the typical investor, who just wants to learn a thing or two about the market.

Yes, Buffett still says plenty about how to find value, and his archive of letters on the Net amounts to a timeless library on the issue.

Investors can piggyback Buffett by investing in Berkshire--if, that is, they can muster the $61,700 it takes to buy a single "A" share.

Even the "Baby Berks," or "B" shares, which carry reduced voting rights and grant no say on the company's charitable giving, cost $2,065 apiece.

Mimicking Buffett was much easier when he was buying common stocks like Coke, American Express, Gillette, Wells Fargo and Washington Post--his largest stock holdings today.

Buffett plainly warns against do-it-yourselfers' venturing, as he has, into concentrated positions in the junk bonds of individual companies.

"These are not, we should emphasize, suitable investments for the general public," he wrote in last year's annual letter, in which he copped to having bought 13% of the debt of bankruptcy-bound financial-services firm Finova.

But investors can approximate this kind of investment by buying a diversified junk-bond mutual fund.

So what's Buffett doing right now?

He still picks up small stakes in the occasional common stock, like Best Buy and PNC last year.

"I'd be surprised if he hasn't got more exposure to junk bonds," says Russo.

"And what this tells us is, now is a good time to buy distressed assets."

That message also seems clear in Buffett's recent investments in fiber-optic company Level 3 and energy firm Williams Cos., both strapped financially.

These are public companies, but Buffett did not buy their common stocks.

He holds non--publicly traded securities in each--convertible bonds in Level 3 and convertible preferred stock in Williams.

Buffett also cherry-picked a prize gas pipeline from Williams and another from distressed energy company Dynegy.

These investments do not necessarily point to broad value in any particular industry.

Level 3, for example, is an unusual play on the world's vastly overbuilt fiber-optic networks.

Buffett believes Level 3 will be one of the few left standing in this area. But he's collecting 9% annual interest while he waits.

The common stock is far more risky.

Buffett's bigger plays have been in buying whole businesses, which suggests that he sees private-asset values as a bargain while the public markets have not yet become cheap.

But take heart.

Maybe after he cleans up how America's largest companies are run he will want to buy their common stocks again. 

HOW SMART IS WARREN BUFFETT?
 Monday, Apr. 03, 1995

A friend of mine, who shares my weakness for making ill-fated investments, recently bought a share of Berkshire Hathaway.

That's the flagship company of Warren Buffett, who recently surpassed Bill Gates as the nation's richest human.

Like many of us, Buffett started with a modest bankroll, only he managed to turn his into $13 billion-plus. We've seen oil magnates, real estate moguls, shippers and robber barons at the top of the money heap, but Buffett is the first person to get there just by picking stocks.

While we've all been puttering around with our own portfolios, buying what Mario Gabelli likes, or last year's laggards in the Dow, we could have been sitting on a few shares of Berkshire Hathaway and turned $1,000 into $1 million.

That's the return since 1969.

I actually owned Berkshire for a stretch in the 1980s but sold it too soon.

Buffett himself rarely sells too soon.

A key element of his strategy is to buy companies at favorable prices and sit on them.

It's the sitting part that Robert Hagstrom says most of us overlook.

Hagstrom is a Philadelphia investment adviser and longtime fan of Buffett's.

While other Buffett buffs were waiting for their hero to write a book that explains how he does it, Hagstrom came out of nowhere as a replacement author.

The publication last November of his book, The Warren Buffett Way, helped spark a sudden rise in the stock price of Berkshire Hathaway from $16,000 to a record $25,000 a share (this is no penny stock).

Since Buffett owns 42% of Berkshire Hathaway, Hagstrom's effort made Buffett $2 billion richer, at least temporarily.

This is the biggest favor ever done to a subject by a writer, and Hagstrom has never even met Buffett.

True to his instincts, the investor friend I mentioned earlier naturally waited for Hagstrom's readers to bid up Buffett's stock to an extravagant level before buying his first share.

Had he read Hagstrom's book beforehand, he might have thought better of it because another of Buffett's rules is that you should pay sensible prices for things.

Hagstrom's detailed description of Buffett's modus operandi has caused a bit of confusion among Buffett followers.

Inspired by the book, a number cruncher at Standard & Poor's took all the attributes of a Buffett-type investment (consistent profitability, high return on equity, etc.) and programmed a computer to spit out the names of the companies that qualified.

Thirty did, but only two of those stocks are actually found in Buffett's portfolio at Berkshire Hathaway.

As the Standard & Poor's computer sees it, most of Buffett's biggest holdings, with the exception of U.S. Tobacco and Coca-Cola, shouldn't be there.

This poses a problem: If you want to invest like Buffett, do you buy the stocks he owns--or the stocks a computer says he ought to own?

 
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I recently met up with Hagstrom in New York.

He says we could argue all day about how Buffett picks stocks and what a computer thinks about it.

A lot of good investors own good stocks, but what makes Buffett a great investor is that he owns only a few stocks and sticks with them.

Eighty percent of the gains in Berkshire Hathaway have come from just six issues.

Year after year he holds them, long after the rest of us would have got tired of seeing them on a brokerage statement.

The last time Buffett disposed of a major position was 1986, when he dumped Handy & Harman, a precious-metals outfit, and Lear Siegler, an auto-parts manufacturer.

Two years ago, he sold a third of his position in Capital Cities/ABC, and has since admitted that he made a mistake there.

Buying and holding wouldn't have worked with the clinkers in my portfolio, but Buffett doesn't have too many clinkers, except perhaps for USAir (another mistake he recently acknowledged).

Neither, however, has he ever invested in the winningest stocks in the country.

None of his holdings made the list of the top 50 performers over the past 20 years.

So if he's the winningest investor without having owned the winningest stocks, something other than stock picking must have helped him.

Hagstrom has recently joined forces with Joan Lamm-Tennant, a professor of finance at Villanova, to test whether buying and holding make any difference on portfolios that are randomly selected by Villanova's computers.

They tracked the performance of 3,000 fictional portfolios--some containing as few as 10 stocks, others as many as 150, going back 10 years.

The upshot is that portfolios with the fewest stocks and the lowest turnover outperform portfolios with more stocks and a higher turnover. And that's without taking brokerage fees and taxes into account.

In a second test, they took randomly selected portfolios of 10 stocks each and compared results with the average mutual fund over a 10-year stretch.

Apparently, the random portfolios do just as well as the funds. Perhaps this explains why funds can't come close to matching Buffett's record.

Berkshire Hathaway resembles a fund, but since it isn't one, Buffett has the freedom to be boring.

Hagstrom's next step is to launch a mutual fund, Focus Trust, based on Buffett's principles.

It's in registration and scheduled to be launched in April.

The plan is to pick a few stocks that Buffett might want to own (though probably not the ones he does own) and hold onto them.

The management fee will be very low, because with that strategy, the managers won't have much to do.

time.com

Wednesday, Nov. 04, 2009

This is all happening because my father didn't buy me a train set as a kid.
WARREN BUFFETT,
billionaire investor, joking about why he decided to buy the Burlington Northern railroad for $34 billion

Wednesday, Nov. 04, 2009

This is all happening because my father didn't buy me a train set as a kid.
WARREN BUFFETT,
billionaire investor, joking about why he decided to buy the Burlington Northern railroad for $34 billion

Excerpts: Warren Buffett on Charlie Rose

"I felt it was an opportunity to buy a business that is going to be around for 100 or 200 years, that's interwoven in the American economy in a way that if the American economy prospers, the business will prosper. It is the most efficient way of moving goods in the country. It's the most environmentally friendly way of moving goods, and both those things are going to be very important. But the biggest thing is, the United States is going to do well. I mean, we can't move the railroad road to China."

"We came closer to a financial meltdown than certainly any other time I've ever seen, and probably in certain respects, there was even more panic than the Great Depression, because it came on so fast and so unexpected. And the whole country wanted to deleverage -- corporations, individuals -- fortunately we have a government that responded. It was when we talked last, there was the question of whether Congress would respond like they should; they finally did. And I felt they would. In the end, they come together over things that are this vital to the country. But we have the right people in Washington. If we'd had a group that behaved like a deer in the headlights, that deer would've gotten run over."

"The stimulus was not perfectly executed, and nothing's perfectly executed. I mean, we shouldn't be criticizing that, but . overall, if you get the job done I don't believe in picking too much at given actions. But you know, there should have been more infrastructure in there, and they hung a Christmas tree on it -- as I said, it's sort of like mixing a tablet of Viagra with candy. I mean, it would have been better to leave out the candy and have the full Viagra."

"In the end, Congress is the one that determines the value of the dollar over time. If they follow policies that require us printing too much of it, monetizing debt and all that sort of thing, dollars will become worth a lot less . They have to -- once the economy is rolling again, they've got a apply some -- they've got to raise taxes now that income will go up as the recession ends anyway, but they're going to have to close the gap between expenditures."

"I basically don't like it (value-added tax) because it's somewhat akin -- it's isn't the same -- but it's somewhat akin to a sales tax . we don't need more regressive taxes in the United States . I think that if we're looking for more money, we ought to look to guys like me. I mean, I am still paying a lower rate on dividends and capital gains than my cleaning lady is, in terms of her payroll tax just to start with. And so, I just think that we've gotten so far out of whack in terms of who's been prosperous in recent years. And most of the economy -- most people have been left behind, you know. So, we learned that a rising tide lifts all yachts."

"I am a hundred percent for the independence of the Fed . I mean, if you have a central bank that is bowing to the will of Congress, either directly or indirectly through some various mechanisms, it would be a disaster."