Warren Buffett, billionaire investor, told us on Wednesday that he definitely notices the overall global economy slowing. There has been a major decline in Asia and we are still seeing a lot of problems in Europe.
On the flipside, he noticed that the US economy is slowly improving. He believes that business is going to improve no matter which candidate wins the upcoming presidential election.
Companies are currently reporting mixed earnings financially, and they are doing everything they can to safeguard themselves against federal budget cuts that might come in the future.
Buffett mentions that even though the United States economy is outperforming both Asia and Europe, it would be a lot better if American fiscal leaders addressed our financial problems head-on. This would be a great way to improve American business overall.
This past Wednesday, when Warren Buffett made an appearance on CNBC for a two-hour segment, he said, “we’re still inching ahead, but were inching.”
Warren Buffett, founder and head of Berkshire Hathaway Inc., tells us that he can see the direction of the overall economy because of the subsidiaries that Berkshire Hathaway owns. Some of his subsidiaries are Clayton Homes, which is a large real estate brokerage, and Burlington Northern Santa Fe railroad, to name just a few.
Buffett believes that the American economy is going to improve no matter which candidate enters the White House. It could be Republican nominee Mitt Romney, or current president Barack Obama. He also mentioned that he supports Obama. He believes that the biggest difference between the two candidates is their views on social issues, and the people that they plan to appoint as judges.
“I think the economy will get better under either one of them,” said Buffett.
Buffett also mentioned that the housing industry in the United States of America is finally beginning to rebound, but it has a long way before it reaches its peak. He mentions that Clayton Homes is selling 10% to 15% more manufactured homes, and the real estate brokers of Berkshire Hathaway are currently handling about 15% more transactions recently.
He also said that the economic recovery in the housing market is going to eventually help with hiring in the job market.
During part of his interview, Jeff Immelt, current CEO of General Electric Company, joins Warren Buffett. Both of these leaders were in Columbus Ohio for the event that took place at Ohio State University. Mister Immelt mentions that the economic trends taking place overall are continuing to be positive, but due to the aftermath of the recession, business is still quite volatile.
“I think if you’re out there hustling you can find business,” said Immelt.
He also wants investors to take a look at the long-term positive trends taking place. The GE boss mentions that his company is sitting on a $200 billion dollar backlog at this point in time.
He also thinks that investments would improve in the United States if the country leaders address the supposed fiscal cliff of automatic tax increases and spending cuts that might very well take place at the beginning of 2013.
Warren Buffett believes that there is an obvious solution to this problem, and our nation’s leaders know it, but they are refusing to act because all of the upcoming presidential election. He believes that the solution is obviously going to involve spending cuts and tax increases.
“It’s going to get done,” said Buffett. “The American people won’t stand for it not getting done.”
Warren Buffett also praised Federal Reserve Chairman Ben Bernanke. He really likes what he’s been doing, and Warren Buffett even said that he would support him if he went for a third term.
Warren Buffett also mentioned that he is on the lookout for a major acquisition for his company Berkshire Hathaway. He just doesn’t plan on paying any extra so that he can compete with other bidders.
In recent years, Berkshire Hathaway has lost out on some of their major acquisitions due to private equity firms aggressively bidding against him with money that they borrowed. We learned this in the CNBC interview that Warren Buffett gave this past Wednesday. Berkshire Hathaway does not borrow any money for their acquisitions, and at the time of this writing, they have $40 billion worth of cash on hand. “Pricing is difficult, and money is cheap,” said Buffett.
He also mentioned during the interview that this past week somebody talked to him about a $6 billion deal that might interest him. He hasn’t looked over the financial statements as of yet, so he couldn’t say one way or another if he believes the deal would work.
During 2012 so far, Berkshire Hathaway has made a total of 15 smaller acquisitions. Warren Buffett calls them bolt on acquisitions because they are easily added to the existing businesses of Berkshire Hathaway. He recently added more to Berkshire Hathaway’s investments and IBM and Wells Fargo stock during the year, but his true preference is to make a large business purchase for the company.
He also mentioned this past Wednesday that he’s really feeling good now that his prostate cancer treatments have been finished for about a month.
“I feel fine. I feel great,” said Buffett.
At 82 years old, Warren Buffett mentions that his treatments were very tiring. He had six weeks’ worth of radiation treatment, and he didn’t finish them until this past September.
He told the world about his cancer diagnosis this past April, and told us that his diagnosis was not life threatening since it was caught early.