Buffett says economy continues to grow steadily

OMAHA, Neb. — Investor Warren Buffett says the economy continues the steady improvement that began in fall of 2009 and he remains optimistic despite Russia’s advance into Ukraine.

Buffett appeared on the business cable channel CNBC Monday morning after releasing an upbeat annual letter to his Berkshire Hathaway Inc. shareholders over the weekend. Buffett is chairman and CEO of the Omaha, Neb., conglomerate.

Buffett said the reports he gets from Berkshire’s 80-odd subsidiaries in a variety of industries show that the economy is growing at a moderate rate, despite swings in investors’ mood.

“The American economy for five years has been moving at a fairly steady rate upwards —not as fast as people would like — but I think that absolutely continues now,” he said.

But Buffett said he doesn’t make investment decisions based on the economy or world events, and Berkshire continued buying an unnamed stock in the United Kingdom Monday. He said he focuses on the prospects of the business in which he’s investing, and the price.

The Russian military advance into part of Ukraine over the weekend shouldn’t prompt investors to sell stocks in good businesses in the United States, Buffett said.

“People react too much to short-term things in the stock market whereas they behave quite rationally when they get into other investments,” he said.

Buffett addressed a variety of topics in the three-hour long television interview.

Buffett said it’s clear that railroad tank cars carrying crude oil need to be updated because oil from certain regions is more dangerous than originally thought.

Berkshire Hathaway owns the BNSF railroad and a manufacturer of tank cars.

“There will be changes made and there should be changes made,” Buffett said. “We have found in the last year that it’s more dangerous to move certain types of crude certainly than was thought previously.”

Buffett said the crude oil from the Bakken oil field in North Dakota and Montana and the Eagle Ford oil field in south Texas has proven more volatile than anticipated.

That volatility may have contributed to several fiery derailments in the past year, including one in Lac-Megantic, Quebec, last summer that killed 47 people.

Buffett reiterated Monday that he thinks it’s a good idea to build the proposed Keystone XL pipeline TransCanada wants to construct to carry Canadian oil south across the Great Plains to connect to Gulf Coast refineries.

He said he doesn’t expect that pipeline to reduce the amount of oil railroads are hauling significantly.