Warren Buffett-Well keep buying businesses – Fox Business 1/21/2010

mr. Buffett goes to Washington DC and we are with him right here on fox business welcome back to Warren Buffett we're continuing our conversation of course your your view on so many things matters to a lot of people because you're arguably the the greatest living investor and and I'd love to know your thoughts on this Massachusetts election I bring that up because it makes me wonder about the whole financial zeitgeist in people's minds about thinking that any kind of change is the change that they want three major elections since President Obama had taken office and that would be the governor gubernatorial races in Virginia in New Jersey and then of course the state Senate race in Massachusetts all three went to Republicans what is Massachusetts tell you well it tells us that people are are unhappy with how they see the world around them right now they see they see a high jobless rate they see people having problems with their mortgages they they're they're in a fairly negative mood currently they'll get over at some point but right now you know they're not happy with Congress they're they're not they're not happy with banks they're not happy with the administration they're not happy with the health care bill whatever it may be some combination of that and they and and so they're going to vote against whoever they think is down here in Washington is that misguided well it probably is but but it does send a message I mean you have to respond to that because in the end to get things done in this country you need to get people marching with you and and and people right now are not marching with Washington yeah we at Fox Business do this thing called red ink watch and we if you were to print out the stimulus bill about this high how many trees had to die for this thing and people look at it and they say we don't feel any job creation even though we've come way off of the job losses and the bleeding that we saw in the employment world yeah and they saw that stimulus bill of 8,000 air marks or something of the sort and they did they do not be Washington favorably man and and that feeling I think is probably about Washington is soured some during the past year partly because factors like the economy but partly because of what they see on television when they watch Congress yeah Congress is not running very high in the polls at the moment let's get to Berkshire of course yesterday you have the the big meeting and everybody voted to split the B shares the cheaper share is less expensive that's not safe yeah and today is the first day they're trading Warren the volatility is is crazy five times normal volume which is what you always have bristled against do you wanted long-term shareholders again the stock is hitting a new high does this make you happy or does it disconcert you a little bit we want to get the same kind of shareholders we've attracted in the past we want to get people to look at buying a share and Berkshire like buying a piece of a farm or an apartment house that they intend to hold forever and it's up to us to attract those kind of people bike how are you what our policies our communications are with them and I think it'll be okay but my guess is there been a little more action than about seventy two dollars and change at the moment out the price on it but just in the end you know we hope we have shareholders or and sync with us who measures the way we measure ourselves we've got the sort of time horizons and all of that sort of thing what instead of a day trader so we're in today we get very very few of them in the end you know you did this so you could complete the purchase of Burlington Northern the railroad I want to make a comparison here because you are also of course Kraft largest shareholder you've been out of it saying he were against craft buying Cadbury how does issuing shares of Berkshire at what many believe is a lower valuation with these beef shares to buy Burlington Northern a business that is far more cyclical perhaps than Cadbury would be to craft how does that differ than what Kraft is doing well Kraft is paying a price for example sold a piece of business in part with where they sold her the nine times operating earnings after taxes they said they sold her for 3.7 billion but they sold it in a very tax inefficient manner so they did that to buy something that probably by the time you get through adding the costs are going to incur deal costs everything is Steen or 17 times earnings we're not doing anything like that advert sure we we are issuing some shares which I hate issuing Charlie hates issuing him the Board of Directors states issuing them but it was the only way we can make the deal and we are using 22 billion of cash in what we think is a very effective manner and we're not selling off any of our businesses to do so we're not selling any businesses no we use the liquidity from the 54:1 split that's left over to buy more businesses other than will get buying businesses yeah as long as I'm alive well behind well we'll try to buy them for cash sometimes we may have to use some stock but we'll use as little stock as possible this reminds me of course and you're the biggest shareholder of Coca Cola's well you were against Coke buying Quaker Oats and PepsiCo picked it up and that of course was Gatorade and worked out very well for PepsiCo name a figure problem

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