American Express challenges Apple for top slot in Berkshire portfolio

BECKY FAST: Let’s talk a little about the fact that the market dropped almost 800 points this morning.

WARREN BUFFET: Yes.

BECKY FAST: I’m worried about you?

WARREN BUFFET: No, actually this is good for us.

I mean, we’re net buyers of stocks over time. And just as I am a net food buyer, I expect to be buying food for the rest of my life, and I hope food prices drop tomorrow.

So when stocks go down, no, we’ll buy on balance. And who wouldn’t rather buy at a lower price than at a higher price?

People are really weird about this. I mean, they’re – most people, most of your audience are savers, and that means they’re going to be net buyers and they should want the stock market to go down. They should want to buy at a lower price.

But as stocks rose, they felt like they were feeling better.

2) 06:03 ET

BECKY FAST: When you look at futures this morning, down about 818 points, I think the first thing the audience probably wants to hear from you is your thoughts on what’s going on with the coronavirus, whether that’s a reason to panic, whether you’re concerned about that.

WARREN BUFFET: I don’t know that I have any special thoughts beyond coronavirus news…

If you’re buying a business, which is what stocks are, businesses – in fact, people will be better off if they say I’m buying a business today and not a stock, because it gives it a different perspective – then probably if you buy a farm, if you buy an apartment, if you buy a business, you’ll own it for 10, 20 or 30 years.

And the real question is: Has the 10-year or 20-year outlook for American businesses changed in the last 24 hours or 48 hours?

And we — you’ll notice, we partially own most of the businesses we own — American Express, we’ve owned for 20 years; We’ve owned Coca-Cola for 40 years, but they’re our business. And you don’t buy or sell your business based on today’s headlines.

3) 06:05 ET

BECKY FAST: But if I think I can potentially get something 10% cheaper, maybe cheaper than that, if I wait a week or a month, maybe that’s what I’ll sit and wait for.

WARREN BUFFET: Well, if you think you have – if you are right you will be incredibly rich (LAUGHS). All you have to do is keep buying in 10-day intervals and keep making your 10-day forecast.

If I knew what the market would do, of course —

But you don’t know; I don’t think anyone knows what the market will do.

I think you know if you’re making a smart purchase at a given price.

4) 06:07 ET

WARREN BUFFET: You definitely can’t predict the market by reading daily newspapers, that’s for sure.

And you really can’t; You definitely can’t predict the market by listening to me.

5) 06:46 ET

BECKY FAST: For people who just woke up and want to know what you think about this morning’s selloff – to see the Dow drop 700, 800 points in the morning – what is your reaction when you see something like that?

WARREN BUFFETT: My reaction is that I like to buy stocks. I mean, I don’t want anyone’s harm, but I like it; If they want to sell them to me cheaper, I prefer that. (Laughs)

So, if this is roughly a 3% decline, I don’t know how many 3% declines I’ve had in my life, but there were a lot of them.

And I actually can’t think of anything you shouldn’t buy.

This doesn’t mean stocks will rise or fall next week, next month, or next year.

But if anything, if you want to own American businesses, you have a chance to buy them 3% cheaper.

BECKY FAST: Does this mean Berkshire will buy stock today?

WARREN BUFFETT: We definitely won’t sell. And yes, we can easily buy things, of course.

6) 08:02 ET

BECKY FAST: Warren, we talked about the coronavirus this morning, but now there are people across the country waking up and tuning in at this hour, so maybe we should revisit that topic.

When the markets are down 750 points… how do you wake up, read this and think deeply?

WARREN BUFFET: I don’t think so — it doesn’t make any difference to our investments. So every day there will be good or bad news.

In fact, if you go back and read all the newspapers of the last 50 years, you’ll probably find that most of them – the headlines – tend to be bad.

But if you look at what happened to the economy, most of what happened was extremely good. I mean, it’s amazing what happens over time.

So, if someone came to me and told me that the global growth rate was going to fall by 1 percent instead of a tenth of a percent, if I liked it and I liked the price, I’d still buy the stock – and I like the price better today than I did last Friday.

7) 08:59 ET

BECKY FAST: Before I let you go, let’s get back to futures this morning because it’s currently indicated that the Dow is going to open with a decline of about 100 or 830 points. Weakness again on concerns about coronavirus and what it means.

What’s your mindset when you go out today and look at the stock market and decide what to do?

WARREN BUFFET: We buy businesses that we will own for 20 or 30 years. We take it all, we take it piece by piece. When we buy in part, they are called shares.

And we think the 20- and 30-year outlook remains unchanged due to the coronavirus.