Billionaire Warren Buffett says stocks remain attractive investments even at today’s high prices when compared to bonds or real estate.
“I don’t know when to buy stocks, but I know whether to buy stocks. Business is good across the board. It was good two years ago, it keeps getting better.”
He reiterated his view that stocks are the best long-term investment during an interview on CNBC on Thursday.
“I don’t know when to buy stocks, but I know whether to buy stocks,” Buffett said. “Business is good across the board. It was good two years ago, it keeps getting better.”
Buffett said his Berkshire Hathaway conglomerate added a few more Apple shares to the 252 million it held at the end of June.
And he says Berkshire has also repurchased some of its own stock in the past month since it relaxed its own rules on buybacks. The company’s former policy regarding stock buybacks didn’t allow them unless the price exceeded 1.2 times the book value per share. Berkshire stock recently traded at 1.45 times multiple.
The new buyback policy was announced on July 17 and gives Buffett a new avenue to put Berkshire Hathaway’s $111 billion in cash to use. The new policy is meant to be used “conservatively,” and will allow Buffett and Berkshire Vice Chairman Charlie Munger the ability to repurchase stock when the price dips below the company’s “intrinsic value.”
Buffett said Berkshire has “bought back a little” of its stock since the new policy was enacted, and that he and Munger need “a big enough discount” to ensure the move is good for long-term shareholders.
Berkshire owns nearly 100 businesses in insurance, food, energy, retail, industrial, railroad and other sectors, in addition to its holdings in Apple, Bank of America Corp, Wells Fargo and Coca-Cola.
Buffett was in New York Thursday on his 88th birthday to dine with the person who paid $3.3 million in a charity auction for a private lunch with the investor.
The lunch auction raises money for the Glide Foundation that helps the homeless in San Francisco.
The Associated Press contributed to this report.