What does Warren Buffett, one of the richest men on earth and one of the greatest investors ever say about buying homes? Yesterday on CNBC's program "Squawk Box" Mr. Buffet said that if it were practical he would buy a "couple hundred thousand of them." When asked about whether buyers should get into the market Buffett said, "If I knew where I wanted to live the next 5-10 years I would get a 30 year fixed mortgage and buy a home."
With the Federal Reserve saying that interest rates are likely to remain low in the future, investors are looking for investment opportunities that will produce income and appreciate in value. In markets like Pierce County it is possible to purchase homes for less than the cost of rent which makes them excellent investment opportunities. "It's a leveraged way of owning a very cheap asset," says Buffett.
On other topics, Buffett said:
Last year he picked eight European companies for investments of $175 million each by Berkshire because they are "terrific" and their stock prices were cheap. He did not name the companies.
If voters elect a Republican president in November, he would prefer that it be Mitt Romney. "He would be more likely to make sensible decisions," Buffett said, "and less likely to make nonsensical decisions than the other three" - Rick Santorum, Newt Gingrich and Ron Paul. Buffett is a longtime Democrat and supporter of President Barack Obama.
The late Steve Jobs, co-founder of Apple Inc., called him several years ago and asked how to invest several billion dollars in cash that Apple had accumulated. Buffett said he told Jobs, among other things, that if Apple's stock price was undervalued he could buy back shares of Apple stock. Jobs said the shares were undervalued but didn't buy the shares.
Congress should tackle the federal deficit problem this year. He said lawmakers should vote on the deficit-reduction plan laid out in 2010 by Alan Simpson and Erskine Bowles, which includes both spending reductions and increased tax revenue.
His biggest worry is that someday the country will suffer a significant nuclear, chemical or biological terrorist attack. "Nuclear, chemical and biological knowledge has spread, and there are plenty of people that ... wish us ill, so that is the biggest worry we have."
He has "zero" influence over the editorial content of The World-Herald, which he said probably will endorse one person for president while he will "probably vote for the other guy."
He personally owns stock in JPMorgan investment bank and said CEO Jamie Dimon "writes the best annual letter in corporate America."
