CNBC's full interview with Berkshire Hathaway Chair Warren Buffett

[0:00] We are sitting down right now with Warren Buffett, the chairman of Berkshire Hathaway, [0:06] who, for the first time in 60 years, has been watching all of this from the audience instead [0:10] of being on stage. And, you know, last year at this time, Warren, you surprised everyone [0:14] with the announcement that you were stepping down as CEO. Fast forward a year, and here we are. [0:19] What do you think? Well, I think it's all working. It's all working. It isn't our ideal [0:25] surrounding area or environment, I should say, in terms of deploying cash for Berkshire. [0:36] But in terms of how we got the right management, we got the right arrangement, and, you know, [0:48] we can pick our spots, and nobody can tell us what to do exactly. And so sometimes we're doing [0:58] nothing. But other times we get quite active. I mean... [1:02] You know, Ajit spent some time on the stage today talking about how one of his keys is [1:08] to do nothing when it comes to insurance, when it comes to writing insurance, which is the [1:11] 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 [1:21] is to find one that, you know, makes sense. And there may be 20 out there that make sense [1:27] that you don't understand, and you just leave them alone. [1:31] You said that the world or the surrounding environment is not ideal. And I guess that [1:35] points to the idea that there's almost $400 billion in cash on hand, although Greg took [1:40] some pains to show it's really more like $380 billion in cash on hand. But there's a lot [1:45] of cash on hand. And you're still active in managing the portfolio, too, and looking at [1:50] stocks. You're looking around, and you don't see a lot that you want to invest in. [1:54] Yeah. Well, then we don't do anything. I mean, we've been in—of the 60 years I've been in [2:01] the business, you know, there's probably five of them really juicy, you know. And I think [2:10] it was Tom Watson Sr. of IBM that said—they asked him the reason why IBM had been so successful, [2:21] or something like that. And he said, I'm smart at spots, and I stay around those spots. And that's—that's [2:28] the whole thing. And IBM was in three different businesses, including time clocks and a couple [2:35] of—and two of the three turned out to be no good. But—so they just focused on the one. [2:41] What is it when you look around that it's just prices are too high at this point? [2:48] I would imagine there are—Greg said this from the stage, too. There are businesses that [2:51] you like, just not these prices. Well, and I would say I understand [2:55] fewer of the businesses as a percentage of the whole than I did 10 years ago. I have not learned [3:04] new industries for some years, you know. And—and—so I don't kid myself on that. I'm—I'm not going [3:14] to learn them. I'm not going to have an edge on, you know, a whole bunch of younger people that have [3:20] actually grown up with them, used the product, seen things. But—well, as I mentioned, you know, [3:31] you don't have to understand too many if they're like Apple. But looking around, let's just get some [3:39] macro thoughts on this, because I don't know that this is something that—that Greg is going to [3:43] comment on, per se. Just looking at the macro stock market environment, what does this feel like to [3:49] you? Is—does it feel expensive? Does it feel like there are opportunities in some places? [3:54] Well, it feels like, you know, I've compared the markets to a church with a casino attached. And—and [4:04] people can move between the church and casino. And—and I would say there are more people in the church [4:09] and more people in the casino. But the casino has gotten very attractive to people, you know. [4:14] If you're buying one-day options or selling them, I mean, that is—that's not investing, [4:24] it's not speculating, it's gambling, you know, just totally. There's nobody that can explain why [4:32] they're buying an option for one day, unless they—maybe—maybe the fellow that—that, you know, [4:39] made the 400 and some thousand dollars from knowing when we were going into Venezuela. [4:43] I couldn't do it. But, I mean, that's pretty—and the quantity of those things is just incredible. [4:50] So, we've never had people in a more gambling mood than now. But that doesn't mean that investing is [4:58] terrible. It does mean that—that prices for an awful lot of things will look very silly. I mean, [5:05] they—you know, they had a squeeze and then—and Avis of all things. Well, Avis has been around for 50 [5:12] years, but just this past week. And we have lots more regulation and everything now, but [5:24] 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—you laid it out yourself. In the 60 [5:35] years you've been doing this in the business, you've had maybe five juicy years. I guess that means [5:40] you're always looking for the next juicy year. What do you think it would take to make a juicy [5:46] year or a juicy opportunity for you? It's a phone call in many—in some cases. You know, [5:52] but we bought a business last year. It wasn't big enough to be meaningful, but we got a letter. [5:59] At Bell Labs? Yeah, Bell Labs. And, you know, and sometimes there's more zeros attached to them [6:08] than others. And we're big enough to handle anything. And we can make decisions faster than [6:13] anybody. And our word is good. There's an awful lot of people that they're—when they—they're in [6:24] the business of reselling something or, you know, it's—and it's a lot better. If you're a good [6:32] salesperson, there's no reason to be selling vacuum cleaners or, you know, as we'll sell stock, [6:40] you'll make way more money. It's where the money is. And there's—and there's more money around than [6:46] ever. But the best opportunities have probably come when the macro environment leads to panic. [6:54] Most likely. Well, the most likely time to buy things is when nobody else will answer their phones. [7:00] You know, everybody else talks about their wonderful trading departments and everything. [7:04] Just try them out. Sometimes when markets are collapsing, they don't answer the phones. [7:10] Right. And if they do, the bids are subject, [7:15] and the offers are subject, and the spread is wide. And then—and they'll use the information [7:20] they get from you about what you want to do to go out and kill you some other way. I mean, [7:24] it's—it's—it's really like going through a slaughterhouse. I mean, you know—you don't feel [7:30] like eating hot dogs for a while. I guess what I'm trying to get at is, [7:35] do you see the circumstances building up anywhere that could lead to a time like that again? Is [7:42] any—any sort of panic in the market? Sure. [7:44] Where do you see them? Well, if you saw them, [7:46] it wouldn't happen. Okay. I mean, [7:48] you've got all kinds—you don't worry about what—what people are talking about can happen. [7:53] But it's—it's something that comes out of the blue, huh? But something will come out of the blue. [7:59] Yeah. I mean, [8:00] a—a nuclear bomb can come out of the blue, you know. [8:06] Well, let's knock on wood on that. [8:08] Well, well, it doesn't do any good to knock on wood. [8:12] That's—it's—that's the point. Yeah. [8:16] It—it was the archduke getting shot, you know, in 1914 or something like that for World War [8:27] One. It—it's just take everything in life. And it—it—it's something people are talking about [8:37] and thinking about, it's not going to happen. But there are things that can happen out of the blue. [8:42] And actually, that's particularly true to use that phraseology now, [8:46] because the things that can come out of the sky, you know, don't know what can happen tomorrow. [8:56] I mean, I don't like to talk that way to people, whether it's you or anybody else. I mean, [9:03] because, you know, whether it does you a lot of good to worry about that, [9:10] I don't think it does do any good to worry about it. I think it's—it's good to be cognizant of it, [9:17] but worrying about it is terrible. And I don't like to—I don't like to even cause that belief [9:23] with people. I don't like to go wrong. Yeah. [9:26] Tell them the end is coming, the end is coming, or something like that. [9:29] A friend told me yesterday, he's recently started using the phrase, [9:32] I don't fret, I don't worry. And that's probably a good way to go about life. [9:35] 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 [9:44] handle that with its businesses? Well, we can't handle runaway inflation, [9:47] except not to be there in the way of it. And if you look at the number of countries that have had [9:55] runaway inflation since World War II, you know, in my lifetime, it's very large, you know. [10:02] And once you create that, it becomes a different world. You know, in Germany, [10:15] obviously, we experienced it after World War I. But there are dozens and dozens of countries [10:22] that have experienced it. And of course, you have countries that have gone bankrupt like six or seven [10:28] times. I mean, it's just amazing what people do in financial markets. [10:36] What about the inflation that we're dealing with right now, which is, you know, not excessive. [10:40] It's north of three percent at this point. But we're not even back at the levels we were [10:44] during COVID. We're going to get eight to nine percent. So what about just higher energy prices, [10:49] how that works through the line, and how you handle it? Well, it came close before Volcker. I mean, [10:55] it was just, it was cash is trash, you know. And people were losing faith in the currency, [11:04] and they felt they could borrow and 12 percent earn 6 percent on farming or something like that. [11:11] And they had a huge farm in this state, Nebraska, collapse because they bought beyond the earning power, [11:20] their paid interest rates beyond the earning power, just because they felt that the dollar was going [11:27] to disappear and the land wouldn't disappear. It's tragic for many people. And if you're the best [11:41] doctor in town or the best lawyer in town, you'll always make money under any choice. The best TV [11:51] personality. I mean, it's, it's, but, uh, what not having faith in the money does to a country, [12:02] it, it turns it into something else. Yeah. And I, you know, I've always hoped that, [12:07] you know, the U.S. never does it. But we are not immune from it happening. Uh, [12:14] we have a lot of control over whether rates may go up a half a point or down a half a point, [12:21] but we may have less control over whether they go up 50 points. You've long been, um, a supporter [12:29] of Jay Powell's. Exactly. He had his last FOMC meeting as chairman, uh, just this last week. [12:35] He did say that he's going to be sticking around, staying on the Fed, staying in that position, [12:40] um, for the foreseeable future, in part because of, uh, the threats that he's faced. [12:46] I'll feel better when he's there, uh, when he's not. I mean, it, uh, it, uh, you know, [12:56] I just, I felt better when Boker was there. But you, it's, economists aren't the best at this [13:07] sort of thing either. If you read any old economics book from 1950 or 1970, it was that, uh, Paul Samuelson, [13:17] who was a terrific guy and smart as hell. Uh, he had the standard textbook for 25 years. And [13:25] if you looked up, you know, zero interest rates and year after year after year, it was a 900 page [13:34] book and there wasn't an entry for it. You know, I mean, it was the most important economic development. [13:41] I mean, in terms of the impact it would have and everything during the lifetime of the students [13:46] reading it. But, uh, uh, it's what you don't think of that does all the damage. [13:54] Yeah. Let's talk a little bit about CEOs, um, in some of the Berkshire holdings. You mentioned [14:01] Apple's, uh, Tim Cook and just the phenomenal job you think he's done. [14:05] Incredible. [14:06] Uh, he's not the only one of your major holding CEOs who stepped down. James Quincy recently stepped [14:11] down from Coca-Cola too. And we just spoke with Vicki Holub, who announced that she is retiring and [14:17] stepping down from that position at Occidental. Uh, part of what Greg's talked about is how stable [14:22] that portfolio is. And, and these holdings are companies that he knows and managers that he, that [14:28] he knows. There's gonna be some new managers in some of those major holdings coming in. Is that a [14:31] problem? [14:32] Well, it was certainly a problem with Coca-Cola there for a good many years around the company. I mean, [14:40] sure. It's, it's, uh, and you have the most problems with, with, with a really good company [14:47] because it'll, it'll, it'll, it'll continue. I mean, if you're selling some product that people [14:53] are buying every day, you make the wrong decision for a long time. Uh, uh, but that's one of the problems [15:02] with investing at, uh, uh, uh, Tim Cook, I, I, I felt was very, very good from the start. And, [15:12] and our, most of our managers, uh, are very good at the smaller problems. They, they, they can't [15:22] anticipate the, the overwhelming problems. That's, that's, uh, my job or now Greg's job. [15:29] Um, do you feel good about those holdings still? Have you met any of the new managers [15:36] of those businesses? I haven't met the old managers. [15:40] Of the new businesses, of the new CEOs that are coming in. Tim Cook's replacement, [15:44] you know, Enrique at Coca-Cola. I certainly met the people at, at, at Bell Labs that we've, [15:50] yeah, you know, and obviously I met Vicki. We made the deal. Right. And so I, I enjoy meeting with [15:58] people and, uh, uh, uh, but you can make mistakes with people. I mean, look at the divorce rate, [16:06] you know, that's, that's, that's more important than whether you got the right CEO or anything else. [16:10] Right. And, and, and now you've got years of trial. I mean, back when I was young, [16:15] I mean, you had to make the decision, you know, or you didn't have to make a decision. [16:20] You know, you didn't have to make a decision. Good many people made the decision when they were 20 or 21. [16:23] To get married. Yeah, they got married. Yeah. [16:26] Now they, they, they, they spent five years and they still make the same mistakes. [16:32] So you think we're getting worse at our judgment? [16:35] Well, I don't know. Maybe the people behave differently before the marriage and after, [16:39] who knows? Exactly. I would say that almost everybody feels either their marriage is better [16:46] or worse than they anticipated a month after they were married. But I don't know which. [16:51] Warren, let's talk a little bit about deep fakes because the deep fake Warren that popped up [16:59] early in this session was pretty good. They had somebody standing up, you know, [17:05] Greg was joking about it, but you know, the first, the first question went to a guy from Warren up in the [17:11] rafters who lives in Omaha. You've been concerned about some of these AI deep fakes and what that means [17:18] for the world. Yeah, I would, I would be concerned if everybody was, well, actually, [17:24] the worst thing would be to have a, uh, a really good imitator of any president that came along. [17:32] I mean, just imagine, well, yeah, we had that famous thing before way back in, in, in New Jersey, [17:39] where they had the Martians coming and everything like that. Oh, War of the Worlds with Orson Welles. [17:43] What you, what you can do. Uh, well, if you're convinced, but people will lend you money for it. [17:52] They shouldn't, you shouldn't be borrowing it. I mean, uh, it's, it's scary. And it's, [18:02] it's particularly scary when you have nine countries or so with the nuclear weapons and, [18:08] and people working on it, something even more late. We haven't dealt with us, [18:12] but we don't know what's going to happen. Yeah. Let's circle back to Berkshire and the Berkshire [18:17] of today. Um, I think I was speaking with you yesterday or the day before, [18:22] and we were talking a little bit about Greg Abel and what a nice guy he is. [18:26] He's a terrific guy. You said something interesting to me, [18:28] though, um, about how you picked him and it wasn't because he was a nice guy. [18:33] Why did you pick him? Well, he's very, very, very smart about businesses. Incidentally, [18:40] he's getting his Canadian, I mean, he's getting his American citizenship here very soon. And he was [18:46] going over with me all the things he had to learn about. And I've actually spent a little time in [18:54] the past with groups of individuals. Of course, my wife did, did, still became an American [18:59] citizenship, an American citizen. And the things they have to learn about the Constitution and all [19:06] these, and they're usually so proud when they become American citizens. And I think, [19:11] I, I think I detected in Greg even, I mean, you know, as successful he's been and everything else, [19:18] I mean, he is, it means something to him to become an American citizen. And, uh, you know, [19:28] and he sits there with his young son, you know, and the son knows more about some of the answers [19:34] to the questions, you know, than he may get asked or something about becoming a citizen. It's, [19:39] it's really interesting. And where else does that happen in the world? I mean, what people, [19:46] you know, that America's special and, and, uh, it's a miracle, uh, what America's accomplished. [19:56] I mean, it's just an absolute miracle. And yet the miracle, the division of the, of, of the output [20:07] and everything is about as inequitable as you could come up with, while at the same time, [20:13] it's got these great attractions. There is some secret sauce. I've never been able to define it [20:22] precisely. But, uh, uh, when you run a country for 200 and some years and people want to come here [20:29] every year, I mean, there's, there's something about it. And what Greg Abel is very, you know, [20:35] is looking forward to becoming an American citizen that means something to him. And you can't buy that [20:44] any place. They're packaging or, you know, it won't work for a Madison Avenue approach, [20:50] approach, you know, and, you know, be an American or something like that. But that, that, [20:55] that feeling just goes, I'm in my 95 years, I've, I've seen it, you know, it's time after time. [21:02] So I felt, I felt good when I, Greg just volunteered that in the last day or two to me, [21:09] that he was, he's up there for his final exams here for becoming a citizen. [21:14] I didn't realize he wasn't a dual citizen already. I knew he was Canadian, but I thought he had dual [21:18] citizenship. He doesn't have a full, whatever the complete citizenship requirement is. And, [21:23] and you can say, why does he carry him? He's gotten along fine without it here and everything. [21:28] He still wants to be a citizen. Yeah. 250 years, [21:32] we're celebrating our 250th anniversary. Um, you pointed out that you've been around for 95 of them. [21:38] You think we have the special sauce that that will continue in this country, [21:41] or what do we need to do to preserve that and make sure that it does continue? [21:45] We've got a special sauce. There's a secret sauce. It's such a good secret that I don't know what [21:51] exactly it is, but I do know this, that anybody that has a choice would choose to be born in America. [22:04] I mean, you know, you can pick some very small country. They're very happy that they're, [22:07] but this is, is there any other country that everybody's for a couple hundred years wanted to [22:17] emigrate to? I mean, it, it, uh, and it attracted some terrible people, you know, too, but, but, uh, [22:27] it worked. And they had the mafias from the different groups, not, not just the Italian mafia, [22:33] but, uh, I mean, it, it wasn't that they were all, we had some system for picking out the, [22:39] the wonderful people from some other countries, but it has, it has worked, but it's worked. [22:47] The extremes to which it works, uh, don't seem to belong to that kind of a society. I mean, [22:56] if you were drawing up dreams for the ideal society and you would have this kind of GDP per cap [23:04] and everything, you wouldn't design, you wouldn't design the, you wouldn't design the inheritance [23:13] laws. You wouldn't, I mean, you just do all kinds of things differently, but somehow it's worked. [23:19] But that doesn't mean that we can't do better. I mean, at all. [23:27] You know, Warren, there are thousands of people, shareholders and partners of yours for decades, [23:34] in some cases, who are sitting out in this arena right now. And I just wonder if there's [23:38] a message you'd like to give to them, um, who's been following you for years and who've been [23:44] partners of yours for years. The number one rule I give them is just, not give them the golden rule. [23:52] I'm not a religious guy, but I mean, nobody said it any better in a couple thousand years than that, [24:02] which may be why it's lasted to a certain degree, too. I mean, that, uh, you know, [24:08] more people are reading a 2000-year-old book about how to behave than anything that anybody's coming up [24:15] with lately. Uh, uh, it's got a lot of, uh, particularly the Old Testament, it's got different [24:23] kinds of stories to some extent. But, uh, if the whole world lived by the golden rule, [24:33] 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, oh, [24:47] I mean, just everything in life. And it doesn't cost you anything. In fact, it's reflected in [24:54] better behavior toward you. So, I mean, it's a very selfish sort of thing in one sense. But [25:00] I've never seen anybody that's unhappy that behaves that way. They, uh, uh, and I've seen a lot of [25:09] people in a lot of different kinds of situations. Warren, I want to thank you for taking this time [25:16] to sit down with us today. Warren Buffett, the chairman of Berkshire Hathaway. Uh, [25:21] Greg Abel is going to be taking the stage in just a moment, and you will see more from him in just a [25:27] moment.