Aug 302018
 

Warren Buffett was interviewed on CNBC on August 30, 2018, his 88th birthday.

The 5 highlights were:

(1) Stocks are currently more attractive than fixed income or real estate.   Berkshire Hathaway is buying stocks every day including today.

(2) Buffett recently purchased additional shares of Apple.  The value of an iPhone to the user far exceeds its cost of $1,000.

(3) Berkshire has recently bought back some of its shares since they were priced below their intrinsic value.  (Note: This implies that Berkshire bought back its shares at about 1.4 times book value ($310,000).  Therefore, Buffett and Munger estimate Berkshire’s intrinsic value to be at least 1.5 times book value ($330,000 —“margin of safety”).  Berkshire closed at $315,800 on August 31.)

(4) Berkshire owns about 9 1/2% of each of the four major airlines and wishes to keep its stakes below 10% to avoid additional regulations.  Otherwise, they would like to own 20% of each airline.

(5) Packaged food companies are not as attractive as they used to be.  But they still earn high returns on tangible assets.

 

 Posted by at 9:38 pm

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