Buffett says deal partner 3G follows ‘standard capitalist formula’
“I can very easily determine the competitive position of Apple now and who is trying to chase them”, he said.
“Fear spreads like you can not believe until you’ve seen a few examples of it”, Buffett said.
“So it is a huge tax cut for guys like me”, Buffett said.
The billionaire faced several questions at the gathering about declining employment in the manufacturing sector – a key theme in the recent presidential race – and about job cuts at Kraft Heinz, the food maker backed by Buffett and 3G Capital.
“I can’t think of what I really (would) have done much about purchases or sales in any election”, he said.
Buffett’s change of heart would be both a boon to his shareholders and somewhat ironic: The investor has publicly espoused the value of income-paying stocks, particularly for retirement savers, but may bring dividends to Berkshire just as he prepares to retire himself.
Last year, Buffett said CNBC – cyber, nuclear, biological and chemical attacks – posed a major threat to the economic well-being of Berkshire shareholders.
It is known as the “Woodstock of capitalism”, according to the New York Times.
Over the course of 6 1/2 hours, Buffett, 86, and Munger, 93, touched upon a range of topics, as they sipped Coca-Cola and munched on See’s sweets (from two of Berkshire’s holdings).
Buffett’s logic is straightforward: The Oracle of Omaha thinks he can make more money for shareholders by investing their money than they can make for themselves with it. He said the company had too much cash it could not reasonably deploy.
Apple, which Buffett bought a stake in past year, accounts for about 5.5% of Berkshire’s portfolio.
Mr Buffett’s conglomerate and 3G have worked together on a number of deals and “there’s a chance we will do more and perhaps even bigger things together”, he said.
Buffett also explained that, in his view, Berkshire’s investment in Apple – despite his noted aversion to investing in technology companies – was more a bet on a highly successful peddler of consumer electronics than a wager on technology per se.
“They’ve been very good about severance pay and all of that, but they have followed the standard capitalist formula, market system formula, of trying to do business with fewer people”, Buffett said.
Buffett also defended Berkshire’s foray into airlines, where it is a top investor in the country’s big four carriers, American Airlines, Delta Air Lines, Southwest Airlines Co and United Continental Holdings.
Today, one share of Amazon can be bought for $934.15.
Warren Buffett, the billionaire investor and CEO of Berkshire Hathway, is bullish on India, now the world’s fastest growing economy. “Walmart and Google were missed opportunities”, he said.