Buf­fett says own­ing IBM shares could prove a mis­take

The Pak Banker - - COMPANIES/BOSS -

WASH­ING­TON: War­ren Buf­fett, chair­man and chief ex­ec­u­tive of Berk­shire Hath­away Inc (BRKa.N), told CNBC on Mon­day the firm's own­er­ship of IBM (IBM.N) shares could prove a mis­take and that he was buy­ing more U.S. stocks over­all since the end of last year.

"We've owned stocks that we've lost money in," said Buf­fett, the world's third-rich­est per­son. "If I'm wrong, you sell them out and take a big loss. We've done that on a few oc­ca­sions with stocks and bonds over the years."

Berk­shire, which held an 8.59 per­cent stake in IBM as of Dec. 31, 2015, said in an an­nual share­holder let­ter on Satur­day that it planned to keep that stake de­spite a $2.6-bil­lion pa­per loss at the end of last year.

Buf­fett told the ca­ble tele­vi­sion net­work he did not think he was wrong for own­ing IBM shares so far, but said it "could be" a mis­take.

He said he has been wrong be­fore, not­ing Berk­shire's in­vest­ment in trou­bled Bri­tish gro­cer Tesco PLC (TSCO.L), which he char­ac­ter­ized as a "huge mis­take" in 2014.

"I bought Tesco, it went down, and it kept go­ing down, and I was wrong about the com­pany," Buf­fett said on Mon­day. Berk­shire no longer has a stake in the su­per­mar­ket chain. Busi­ness was a bit "softer in many places" than he had an­tic­i­pated four or five months ago, Buf­fett said, adding that in gen­eral, stocks would ad­vance over time. "We have bought more stocks since the end of the year," he said.

He did not know what the con­se­quences of sus­tained low in­ter­est rates glob­ally would be, but they made all as­sets more valu­able, Buf­fett said.

Buf­fett, who is back­ing Demo­cratic can­di­date Hil­lary Clin­ton in the 2016 U.S. pres­i­den­tial elec­tion, said he had been sur­prised by the elec­tion sea­son and "amazed" by Repub­li­can party de­vel­op­ments, stat­ing: "This takes the cake." Buf­fett crit­i­cized Demo­cratic can­di­date Bernie San­ders, say­ing he has "a ten­dency to de­mo­nize in­sti­tu­tions."

He weighed in on a pri­vacy fight be­tween Ap­ple Inc (AAPL.O) and the U.S. govern­ment, say­ing pri­vacy should trump se­cu­rity in smaller cases, but se­cu­rity should trump pri­vacy in ma­jor cases.

"If there is some­thing ma­jor, some­thing that the At­tor­ney Gen­eral or the head of the FBI would be will­ing to sign and go to a judge on and say, ' we need this in­for­ma­tion and we need it now,' I would be will­ing to trust that of­fi­cial," he said.

Buf­fett said he was a "lit­tle sur­prised" by Berk­shire's roughly $396 mil­lion in­vest­ment in pipe­line op­er­a­tor Kin­der Mor­gan Inc (KMI.N), and that it was the de­ci­sion of one of Berk­shire's top port­fo­lio man­agers who each run $9 bil­lion, a ref­er­ence to Todd Combs and Ted Weschler.

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