Warren Buffett Talks Financials, Markets, Economy & Politics (BRK-A, WFC, AXP, JPM, FNM, FRE, BUD, CNQ, BNI, BRK-B)

This morning there was a rather long CNBC interview where Becky Quick got to interview Berkshire Hathaway’s (NYSE: BRK-A) Warren Buffett live in Omaha.  He noted specifically that the economic weakness was going to go out into 2009 with a further slowing down in housing, retail, and credit.  Buffett talked about many issues from economics to specific stocks to politics.  The good news for equity traders is that Buffett said equities are a better value now. We covered the equities angle first and then went over some of his other comments after.  These are paraphrased comments for the most part, but the specific stocks he covered with opinions below were Wells Fargo (NYSE: WFC) andAmerican Express (NYSE: AXP), Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE), Anheuser-Busch (NYSE: BUD), and he commented on Canadian oil sands after his visit to Canadian Natural Resources Limited(NYSE: CNQ) and railroad Burlington Northern (NYSE: BNI).

He didn’t say which one it was, but out of Wells Fargo (NYSE: WFC) andAmerican Express (NYSE: AXP) he said he has added to his positionrecently because of added weakness.  We would predict that it wasAmerican Express as this one is down more, although looking at a3-month chart shows that in mid-July (after his last filing dates)Wells Fargo was actually down more than American Express.

Interestingly enough on the financial systems he said that it hasturned out that Wall Street was a nudist beach where too much was goingon.  He did say that another Bear Stearns failure is possible, although hewouldn’t give any names.  He also said he agrees with JPMorgan Chase(NYSE: JPM) Jamie Dimon that people who spread false rumors to takedown financial institutions should go to jail.

On, Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE), Warren Buffettsaid that these could be completely wiped out for the common holder,although the actual entities won’t likely be allowed to fail entirely.He thinks private investment alone won’t be able to save these.

On Anheuser Busch (NYSE: BUD), Buffett said he sold some of hisholdings before the merger at $61 or $62 as the company was not wantingto be acquired.

As far as his recent trip with Bill Gates to the Canadian oil sands, hesaid he was interested in the idea but isn’t making an immediateinvestment there.  Their visit to Canadian Natural Resources Limited(NYSE: CNQ) properties has driven shares the last couple of days, so ifhe’s not going to put in cash there might be some profit taking thereon that word.  Another note he made was that he wished he would havebet on the railroads like Burlington Northern (NYSE: BNI) much sooner than he did.

You can see Buffett’s FULL EQUITY HOLDINGS from just last week.

On the political front, he did say he believes that Obama is the betterchoice for the future.  Mr. Buffett said he would not actually beattending the Democratic Convention, and he also said that he did notask Obama specifics on oil and taxes to avoid putting him on the spot.And he even keyed in about John Edwards having an affair and lyingabout it while he was raising cash should be grounds for a class actionsuit against him to get a refund for contributions.  He also said heis against any windfall taxes against the oil companies and he isagainst that notion despite Obama’s plan.  He didn’t go so far assaying he thinks it will get thrown out, but said many notions getthrown out in politics.

On the U.S. Dollar, he has no direct currency plays right now.  He’s nolonger betting directly against the U.S. Dollar with currency plays.He said he gets that by owning foreign companies now (and many Buffettholdings have currency exposure).  Buffett is also worried thatinflation may continue rising and this is a real problem for the Fed.

This was a rather long interview that CNBC’s Becky Quick was able toget today.  As far as whether anything he said was earth shattering orfull of any new great insight, well that is for you to decide.  We are also providing a link to the full live blog from CNBC if you want to read further into his exact comments.

Jon C. Ogg
August 22, 2008