Buf­fett says it doesn’t feel like a 3% econ­omy

Bil­lion­aire in­vestor weighs in on Ap­ple, Har­vey and Trump

USA TODAY US Edition - - MONEY - Adam Shell

Bil­lion­aire in­vestor War­ren Buf­fett says it still feels more like a 2% econ­omy to him de­spite the gov­ern­ment to­day boost­ing its sec­ond-quar­ter GDP growth es­ti­mate to 3%.

In an in­ter­view with CNBC, Buf­fett, who turned 87 Wed­nes­day, weighed in on many top­ics Wall Street is watch­ing, rang­ing from Hur­ri­cane Har­vey and North Korea to his ma­jor hold­ings in Ap­ple and ma­jor banks such as Bank of Amer­ica and Wells Fargo.

When asked if it felt like a 3% econ­omy, Buf­fett, chair­man and CEO of Berk­shire Hath­away, which has in­vest­ments in vir­tu­ally ev­ery part of the U.S. econ­omy, said, “I would guess we are in a 2% growth econ­omy now. Ev­ery now and then we think we are ac­cel­er­at­ing, and ev­ery now and then that maybe there’s a dou­ble dip. It just seems to be a cou­ple of per­cent.”

Here’s what the “Or­a­cle of Omaha” said about other key top­ics:

uAp­ple stock. Buf­fett said he has not sold a sin­gle share of Ap­ple stock since he be­gan ac­cu­mu­lat­ing them, but he said one of his fund man­agers — ei­ther Ted Weschler or Todd Combs — did last quar­ter as a way to fund new in­vest­ment ideas. At the end of the sec­ond quar­ter, Buf­fett’s Berk­shire owned 130.2 mil­lion shares of the iPhone maker, ac­cord­ing to reg­u­la­tory fil­ings, which amounts to a 2.5% stake in the tech com­pany, Buf­fett said.

Buf­fett did not say whether he was adding to his Ap­ple po­si­tion in the cur­rent quar­ter.

uKraft Heinz ac­qui­si­tion mind-set. Buf­fett said con­sumer prod­ucts giant Kraft Heinz, best known for brands such as Heinz ketchup, Os­car Mayer hot dogs and Jell- O, would not buy ri­val Mon­delez In­ter­na­tional, home to brands such as Oreo cook­ies, Den­tyne gum and Wheat Thins crack­ers. Kraft shares were un­changed, while Mon­delez shares fell 1.9%. Buf­fett’s Berk­shire is a ma­jor owner of Kraft Heinz along with pri­vate eq­uity firm 3G. At the end of the sec­ond quar­ter, Berk­shire owned 325.6 mil­lion shares. uBerk­shire’s siz­able bank

hold­ings. Buf­fett, who on Tuesday night ex­er­cised his right to buy 700 mil­lion shares of Bank of Amer­ica stock at a dis­counted price of $7.14 un­der terms of a 2011 deal with the bank af­ter he in­vested $5 bil­lion, says he’s happy with his new in­vest­ment. “I like the busi­ness, and I like the val­u­a­tion very much,” Buf­fett said.

Buf­fett, also a ma­jor holder of Wells Fargo, says he still thinks it is a “ter­rific bank” de­spite its fake ac­counts scan­dal. “The prob­lems are be­ing cor­rected,” Buf­fett said.

uHur­ri­cane Har­vey.

Through its own­er­ship of Ge­ico auto in­sur­ance, Buf­fett said Berk­shire Hath­away un­der­writes roughly 10% of the auto poli­cies in Texas and in­sures about 500,000 cars. “We don’t know at this point” the size of the losses, he said. He added that Berk­shire re­duced its ex­po­sure to cat­a­strophic lines of in­sur­ance in re­cent years due to pre­mi­ums com­ing down, so he didn’t fore­see a hit from that line of cov­er­age. uPres­i­dent Trump’s ten

ure. Buf­fett, who raised money for and voted for Hil­lary Clin­ton in the 2016 pres­i­den­tial elec­tion, says he prefers not to crit­i­cize sit­ting pres­i­dents, even ones he didn’t vote for. “I am not in the busi­ness of at­tack­ing any pres­i­dent,” he said. Buf­fett says he has in­vested dur­ing 14 of 15 pres­i­dent’s terms dur­ing his life­time, and stocks rose each time.

uNorth Korea threat. Say­ing, “Who knows what could hap­pen?” Buf­fett stressed that the more na­tions such as North Korea that have nu­clear ca­pa­bil­i­ties the “more likely that ... some­thing with a re­mote prob­a­bil­ity fi­nally hap­pens. It’s a more dan­ger­ous world.”


“I would guess we are in a 2% growth econ­omy now,” Berk­shire Hath­away Chair­man and CEO War­ren Buf­fett said.

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