Warren Buffett remains a buyer on the stock market, and he buys more aggressively if prices decline in the companies he likes, he said in Omaha on Monday.
On CNBC’s “Squawk Box” news program, Buffett said buying stock in those businesses is part of his long-term strategy for Berkshire Hathaway Inc., the Omaha-based conglomerate of which he is chairman and chief executive.
“Our goal is to add to fundamental earning power every year,” Buffett told interviewer Becky Quick in a three-hour session broadcast from the lobby of the Hilton Omaha hotel.
That includes buying whole companies — Berkshire closed on its purchase of the Duracell battery company Monday — and investing in businesses by buying shares of their stock.
Once Berkshire chooses a company for a stock investment, he said, it is more likely to buy more shares if its per-share price declines, all other things being equal.
Buffett also said Geico, the Berkshire-owned auto insurance company, is using IBM’s super-computer, nicknamed Watson, to analyze insurance data. Berkshire also owns 8.4 percent of IBM’s stock.
The two companies are cooperating in what he said was an example of using a computer to find ways to improve productivity, which he said is important for a country to continue growing its economy.
Buffett’s 51st letter to Berkshire shareholders came out Saturday, and most of the discussion Monday touched on the letter’s topics, including oil prices, climate change and his decision to live-stream Berkshire’s annual meeting for the first time.
The meeting April 30 in Omaha is to be shown over Yahoo Finance’s website.
“We’ll give it a shot and see what happens,” he said of the Internet plan, which he said may cause in-person attendance at the meeting to level off or decline moderately.
He said he decided to live-stream the meeting partly because last year Omaha seemed to have “maxed out” its capacity to host the estimated 40,000 people who attended.
In addition, he said, he wants to give all shareholders a chance to see him and Berkshire Vice Chairman Charlie Munger in a live setting.
Buffett said he likes to see the managers who run Berkshire’s companies occasionally, so it’s only fair that Berkshire shareholders have a chance to watch their top executives, too.
Buffett also announced a contest for the estimated 400,000 employees of Berkshire-owned companies that could make new multimillionaires.
The Berkshire employee who picks the most winners in the coming NCAA men’s basketball tournament will receive a $100,000 prize, he said. If an employee picks the winners in all the games leading up to the last 16 teams, that person would win $1 million a year for life.
Berkshire had insured an earlier basketball tournament contest that would have paid $1 billion to someone who picked the winners of all the games, a task with astronomical odds. Nobody won the grand prize.
Buffett also said:
» Berkshire’s property insurance companies adjust their rates about every six months, and if climate change started causing an increase in risk, rates would go up. But so far that hasn’t happened.
» Although he has endorsed Hillary Clinton for president, her Democratic challenger, U.S. Sen. Bernie Sanders “is not tailoring his message week by week. ... With Bernie, you know exactly what he thinks.”
» Sanders “is bothered by the fact that, in a country with a $56,000 GDP per capita so many people are poor. ... He would like to do something about that. ... Bernie has a tendency to demonize institutions and he thinks the solutions would be simpler, and he would turn the system somewhat upside down.”
» The Republican Party may pick its nominee at its convention if front-runner Donald Trump doesn’t win a majority of delegates through state primary elections.
Berkshire Hathaway Inc. owns the Omaha World-Herald.
Contact the writer: 402-444-1080, email@example.com