Buffett interview (October 2007) _ financial wealth of

October 18, 2007, Buffett and Fox News Business Channel interview, he talks about the United States economy, politics, tax system, as well as the investment exchange of views, and laments: "sorry prematurely sell oil stocks. " Fox News business channel program host David · Assmann: I'm honored to introduce Fox Business Channel team of the new member Liz · Kleinmann, she will be in Eastern time each day, 2: 00 pm to 5: 00 pm and I together here in a programme. Today, Liz in Nebraska Omaha has a special arrangement, she will be there "share God" and Burke summer · Hathaway Company's Chief Executive Officer, may be the greatest Investor-Warren Buffett ·. Liz, here to you. Presenter Liz · clyman: thank you, David. I could not hide her excitement and thrill. To join the Fox Business Channel is really great, the most important thing is that I interviewed the first participant is Warren Buffett ·. Thank you for participating in our program, Mr. Buffett. Burke summer · Hathaway Company Chairman and CEO Warren Buffett ·: pleasure. Kleinmann: your Entourage? Buffett: my Entourage? clyman: Yes. Your bodyguards? your Entourage? Buffett: Oh, Yes. Well, I very much hope that they will come, but they will come. Kleinmann: you with most of the CEO are quite different. You don't need to do such a thing. Buffett: Yes, I do not need a bodyguard. Kleinmann: Yes, you do not need them. In this one-hour Fox Business Channel live program, I would like to know your thoughts and ideas, and ask you something a little sharp. The first is the United States economy. Many viewers are watching our program, they are very worried about the United States economy, maybe some of them is about to lose their homes, some worrying is close to $ 90/barrel of crude oil, crude oil prices today close slightly lower than the price. Do you think the current economy? Buffett: good. United States economy is improving, I already expected to those you mentioned, crude oil prices near $ 90/barrel, all food prices are rising, the real estate market has begun to decline, but we see some areas are improved. We see the speed is slow retail sales, while we've got the data connected with the construction industry, these industries are rapidly declining. But so far there is no substantial increase in unemployment. Kleinmann: you mentioned the decline of industry will eventually lead to economic recession? Buffett: it's hard to say, but there is such a possibility. I mean, when increasing the cost of transportation, food and consumers before to refinance and get cash in the real estate market continues to shrink start to bring pressure on United States citizens, the economy might be into recession, it is in the affirmative. Kleinmann: but you just mentioned unemployment data and not disturbing. Do you think the Fed will because a data frightened? because you're not fed officials, not because of market ups and downs of everyday. August 2007, employment accident reduction after the Fed cut interest rates will make a decision, whether you think this shows that the Fed has frightened? although next month employment continued to increase. Buffett: they can see more information, I mean, I guess they take into account the data outside of employment. They saw the mortgage market is happening, but in fact we are not the Fed's policy is concerned, we are not worried about the economy into recession, I hope to be in a lifetime experience several times of economic recession. I mean that in the next 20 to 30 years, economic occasionally into recession. But in General, we will do well. Kleinmann: real estate market will be the result of economic recession, one of the main reasons. Buffett: Yes. See Kleinmann: Monday a notice of the Ministry of finance, the current real estate market conditions allow the Bank to join together to launch a value of "$ 1,000 like assistance" Assistance Fund. Packaged mortgages then sold to investor ideas originally be from such as Citi Bank, the Bank purchased by those who make their troubled mortgage loans to help practices is not a good idea? Buffett: now it seems this program is also very mysterious. I mean, they announced that on Monday, said will then announce more details. But now I have not seen the details, so I really don't know what they are talking about, but I do not think that the mortgage loan together or change the mortgage owner can change these mortgage tool itself survival capacity, nor does it change the status of the payment can be completed on schedule. Therefore, I temporarily not the judgment. To see more detail, I am skeptical of this plan. Kleinmann: whether there will be a able to everyone pay their mortgage loan fund? Buffett: No. I think not. I mean, ultimately you have to have enough money to pay the bills each month, especially if the prime rate as early maturity, your monthly bills start increases. You know, the mortgage market has many problems. Kleinmann: many people believe in the free market, I know you are too. In a free market, the Federal Government should intervene in these situations? Buffett: I think they won't intervene — I think so. A Ministry of Finance officials have indicated that they do is provide sandwiches. As long as they only offer sandwiches, so do nothing wrong. Kleinmann: doing nothing wrong. Looking back on it, you think that banks and large financial institutions to these assets placed in the balance sheet is a huge mistake? Buffett: Yes. If they use these assets included in the balance sheet, will be subject to restrictions on the size of funds, in order to circumvent these restrictions, they will mortgage loan package for new investment instruments and continue to benefit from these investment vehicles, so they will not be subject to capitalGold. In my view, these loans should be included in the balance sheet, so everyone can know what is happening. Kleinmann: sounds should be. This reminds me of the Countrywide Financial Corporation, Countrywide is America's largest mortgage lenders, it earlier in the summer of 2007 will caught this crisis and obsessive. We all know you will from the eyes of others and to discover the treasures of spam, when you see the company's share price fell to 15 dollars/units, have you ever considered buying the stock? or at least help them? Buffett: me and the company's CEO Andrea Lu · Meuse Laurent (AngeloMozilo) several times. Kleinmann: during that period within? Buffett: Yes, at that period. I didn't purchase the company's shares, if they have a comprehensive plan — because they need to have a grand plan to go out of the dilemma we may buy part of securities of the company involved. But you know, then United States Bank, bought $ 2 billion of convertible preferred stock. Therefore we did not take any action. Kleinmann: but now United States Bank is also affected. Buffett: Yes, they met and other large investment banks and commercial banks the same problem. You know, only when the tide receded, they know who they were in the nude swimming, so to speak. Now that the tide is out. Kleinmann: but we see several naked body. Buffett: Yes. Kleinmann: Andrea Lu · Mo mazlo yet completely out of trouble. People may want to know why he would sell the stock (although doing so complies with the requirements of United States Communications Committee), and ordinary people may not know that the problem has appeared to increase the intensity of selling out? this is not a very good idea. Buffett: Yes, he changed his plans. I am so, earliest Anji Lu is see the mortgage market is undergoing something of a person, he said: "I'll never see a" soft landing, and when people are talking about the mortgage market is a soft landing. He gives some warning signals, perhaps he sold stock behavior is also a kind of warning, I think he might see what will happen in the market. He is also in public occasions expressly on the given description. Kleinmann: but many would say, boy, it looks really bad. I buy stock, but he is in stock. Buffett: Yes. I do not like the others sell stock when you buy shares, I've never been in a company to sell a stock when you merge, merge does not lead to trouble. Kleinmann: some things you wouldn't do, this is of course. The market has seen a big drop, many house builders stock price decline has occurred, you may have already purchased a construction company's stock, for example, Hovnanian. Is it true? Buffett: I didn't buy a unit. Kleinmann: Hovnanian companies didn't buy a share? Buffett: No. I'll watch them. I looked at the company's financial reports, on these stocks. I research everything, but ... Kleinmann: what you waiting for, such as another price? Buffett: until I think price is undervalued, I will have to wait. I any securities are doing, but I do not think that the company's stock price has been underestimated. Kleinmann: not yet underestimated?: Warren Buffett. Kleinmann: now ... Buffett: by the way, you will find an interesting phenomenon, from 30 months ago until 18 months ago for a year, many buildings are trying to bring the company sold to Burke summer company, other industries have never experienced such a situation. I don't want to point out that the company's name, but many are listed companies, when the company's stock price soaring, the company's management to discourse full of confidence, these people are trying to sell their companies. Kleinmann: this to you what? Buffett: This tells me that they clearly know what is happening or what, but they do not know the real estate market adjustment costs would be so expensive. Kleinmann: but you have Clayton Homes, you really get involved in the housing construction industry. Buffett: this is a prefabricated housing construction company. Yes, that's right. Kleinmann: this is the case. You can find in other people's eyes are rubbish is famous for its treasures, why don't you buy a company that has been suppressed? Buffett: if their price is lower than the value of I think. Kleinmann: they have not fallen to a level that you said? Buffett: yet ... You know, I'm building and no expert, but as far as I'm concerned, their price has yet to fall below the level of value. Kleinmann: Burke summer · Hathaway Company's how about the company, such as Benjamin Moore paint company · (BenjaminMoore), this is a very large extent dependent on the real estate contract company, we see the new housing starts are shrouded in clouds. Buffett: Yes. Kleinmann: clearly, the real estate market is indeed there have been some issues that your company's business are also in trouble? Buffett: Yes. Although Benjamin Moore paint company · 2007 nine months profit rose slightly, but our bricks and mortar business but sharply, mainly in the southwest district. Burke summer's Shaw carpets are sold to the just-completed housing, and competitor's carpet business has declined. Housing industry has fallen, but the business building business is not affected, but those same building-related industries are in decline. Kleinmann: you have a large group. Buffett: Yes. Kleinmann: when a group of half of the business performance of the bad, and the other half of the business may well, done a good job of what industry? Buffett: us this year in insurance business for good luck, I said quite lucky. Kleinmann: while other business General ...Buffett: is this. Insurance business is very large, in the summer than Burke's other business. So when we are lucky in that piece, you know, it makes everything better. Kleinmann: there are other purposes for Burke summer very large investment, such as in oil stocks, a lot of people on your original purchase and subsequent sale of the shares in the petroleum, on a number of great interest to watch our TV programs and are not familiar with the company's audience, the oil is a controversial stock because the parent company in oil — China National Petroleum Corporation and the Government of Sudan had business dealings between the Bush Administration has said that this should be on the genocide in Darfur has some responsibility. I may watch your annual meeting, many shareholders on your buying decisions for oil co. in very unhappy, hope you can give up these shares. Buffett: Yes. Kleinmann: you expressed opposition to the shareholders vote majority shareholders to agree with you, you don't have to sell the shares. Was in the month of May. But starting from September, you will continue to sell these shares, you have to empty all the petroleum stocks? Buffett: we have already sold in oil, but we are depending on the price to make a judgement. The annual meeting, held in may, in accordance with the standards of the United States market, stock prices in the oil is approximately 110 u.s. dollars/units, since then, the stock price in oil has doubled. Unfortunately, I'm a little prematurely sold PetroChina, but this is the basis for the valuation of the decision. When we buy in oil, if the share price multiplied by the company, you will find in the oil market value to 350 billion. When we sell out, the market value is the original 8 times — Oh, sorry, is 8 times more — in accordance with the standards of the United States, the initial share price in oil for $ 20, and sell when the price is between $ 160-200. Kleinmann: considerable profit. Buffett: Yes, we used 5 billion earned approximately $ 35. I prematurely sold PetroChina, I sold it after that, they might want to shoot me, and said that Warren has to sell the House. When it is dropped. Kleinmann: Yes, you have chosen pocket to Ann. Buffett: this is a lot of money. Kleinmann: virtual numbers. Buffett: virtual figures, quite right. Kleinmann: Charlie · monger might say so. Buffett: monger will say: "you have succeeded. "Clyman: but you can't try and try again. For a never bought shares of ordinary people, your suggestion is you don't might have sat there waiting, at the mouth and said, Oh, the rose is rose, it should be. Buffett: we even have never considered these, we think that what price to sell, we think the company worth?, in fact, when we initially purchased, I am in the oil market value may be least 1,000 billion. Kleinmann: it is how to catch your attention? how do you find someone like petroleum companies? Buffett: I'm sitting in the Office can see a report, luckily it is written in English, I described a very good company, the annual report provides information on crude oil reserves, oil refining, chemical products, and other aspects of all information. I sat there reading this report and to think that the company values 1,000 billion. Now I do not see the prices, first look is the company's business and try to find out how much money the company values, as if you see the prices, in my judgement will be affected. So I look at the company's fundamentals, try to assess its value before the price. If the price is lower than the value of my evaluation, I would buy. Kleinmann: How do you assess it? Buffett: this important skill. Kleinmann: Yes. Buffett: but for the purchase of the entire business, this is essential. When we sell out, the stock price was already embodies the values, we believe that this is a very reasonable price. Now that crude oil prices from $ 30/barrel rise to 75 dollars/barrel, today was higher. But today or yesterday, I believe that oil is the world's second largest market value of the company. Kleinmann: which company after?: Warren Buffett is higher than that of General Electric, which is lower than Exxon. Kleinmann: you mean Exxon Mobil. Buffett: not and Exxon. Kleinmann: you've cleared all the stock in the oil? Buffett: Yes. I wish I had not empty, but it was empty. Kleinmann: when to empty the? Buffett: we spent some time to sell all the shares in oil. Kleinmann: took some time to sell it? Buffett: a few months now. Yes. If it declines, we may buy back. Kleinmann: can you buy for political pressure or sell stock?: does Warren Buffett. Kleinmann: or similar ... Buffett: my answer is no. Kleinmann: on Darfur genocide of the aggrieved person does not affect your selling company stock decision? Buffett: Yes. The Chinese Government has in 88% of shares and control the top 30 companies in 29 of the Chinese Government and the Sudan. If you bought the 30 companies listed in any of the stock, the Chinese Government will be your key partner. The problem is that you are responsible for dealing with them? clyman: your next week will travel to China to participate in local, a metal cutting the company's opening ceremony ... Buffett: Yes. Kleinmann: is Israel's IMC international metal cutting ... Buffett: given my limited ability, Liz, I mean, they were in using our ... Kleinmann: you must be on the cutting industry. Buffett: Yes, I'm quite familiar with it. Kleinmann: you are studying Chinese other companies? Buffett: no, the answer is no. But my research companies, regardless of the State, not by sector, as much as I read each annual report and try to find out whether there is a real bargain. Kleinmann: you four years ago is how to find oil in the annual report of? it's name may be a lot of people ... Buffett: other people look at is the Playboy, I see the annual report. Kleinmann: are there ... (Whisper) Buffett: in fact, I was in a magazine of see it ads. When I was holding in oil — which is what I do — it's my job to configure resources that I find the configuration of funds by the opportunity to configure the funds. Kleinmann: your best investment in the history, the purchase of shares in which one is best? Buffett: I do not care about it is not the best, you might say we 7 dollars the price of buying a Burke. Kleinmann: today it is close to ... Buffett: 128,000 or 129,000, I do not know, probably almost the price. Purchase of the first stock price $ 7.375. If my life within the best investment, it is possible the Government employees insurance company (GEICO). This is a company I buy 20 years old, after selling, then later buy the whole company. Kleinmann: this is a good investment. Buffett: the result is good. Kleinmann: we will continue this dialogue. I had some questions to ask, you can choose to answer or not, but we hope you can answer. Let us look back, talk about the mystery of the currency. For the month of May 2007, Mr. Buffett said that he developed an interest in a currency, I will ask him what the monetary. We will discuss the Bear Stearns, the anniversary of the "Black Monday", etc. Do not go away. Fox is commercial. (The full text of about 21,300 words, please refer to the Value "magazine)