Highlights of Warren Buffett on CNBC – October 16, 2013

Warren Buffett was interviewed on CNBC from 6 a.m. – 9 a.m. today.  These are some of the highlights:

(1) The threat of not to raise the debt ceiling after you have spent the money is a political weapon of mass destruction and totally irresponsible.  It should never be used.

(2) Stocks are where we have our money.  They are the most attractive alternative over the next 20 years.

(3) Stocks are NOT at bubble levels.  It makes no sense to diversify into cash or long term bonds.

(4) Berkshire has $40 billion in cash to invest, but a $12+ billion “elephant” recently got away.

(5) Earlier this morning Berkshire purchased a $1.1 billion UK company that manufactures liquid dispensing and beverage cooling machines.

(6) Companies should be managed for shareholders who are going to stay, not for those who leave (referring to Apple and Carl Icahn).

(7) Bank of America’s (BAC) earnings report released this morning is very good with write-offs down to 70 basis points vs. 50 basis points for Wells Fargo.  (Berkshire owns warrants to purchase 700 million shares of BAC at $7.14 over the next 8 years vs. current price of $14.28.  Wells Fargo is Berkshire’s largest equity holding.)

(8) Buffett is very pleased with Berkshire’s large investment in IBM.  IBM will be reporting its quarterly earnings after the market closes today.

(9) Instead of local governments taxing soft drinks with sugar, they should tax calories (candy, etc.).  It is calories that add to a person’s weight.

(10) Berkshire-owned Benjamin Moore Paint is profitable even though its CEO has recently been replaced.