As much as he likes stocks, Buffett said the last eight years or so have been a tough environment for active investors to beat the S&P 500 index.
In fact, he told CNBC that Berkshire investment managers Ted Weschler and Todd Combs have trailed the S&P 500 by a “tiny bit” since each joined the company.
Combs, in his late 40s, arrived in 2010 after a three-year search by Berkshire for someone to help manage its massive portfolio of stocks. Weschler, in his late 50s, joined Berkshire two years later, after paying a combined $5.3 million to win the 2011 and 2010 auctions for an annual charity lunch with Buffett.
However, Buffett pointed out that Combs and Weschler — both former hedge fund managers, and each managing about $13 billion of the Berkshire portfolio — have done better in the market than he has over the same time period.
Berkshire — whose stock holdings, including the top six by market value Apple, Bank of America, Wells Fargo, Coca-Cola, American Express and Kraft Heinz — was worth nearly $173 billion at the end of 2018.
In the wake of Friday’s 27 percent decline in shares of Kraft Heinz after the company announced a $15 billion write-down of two key brands, Buffett said, “We overpaid for Kraft,” which in 2015 Berkshire and Brazilian private equity firm 3G Capital merged with H.J. Heinz, the global ketchup powerhouse it purchased in 2013.
As for Apple, Buffett told CNBC on Monday, “If it were cheaper, we’d be buying it. We aren’t buying it here.” He added, “I don’t see myself selling — the lower it goes, the better. I like it, obviously.”
While government filings show that Berkshire trimmed its Apple stake in the fourth quarter, Buffett said it was Weschler or Combs, he didn’t specify, who decided to sell some Apple to make a new investment.
Buffett doubled down on his bitcoin criticism, saying the world’s biggest cryptocurrency has “no unique value at all” and “attracts charlatans.” He is not alone. Many business leaders, including J.P. Morgan chief Jamie Dimon, have also expressed skepticism.
Bitcoin was trading around $3,800 per unit midday on Monday. It had soared from under $1,000 at the beginning of 2017 to about $19,000 by mid-December of that year. But since then, it’s been falling rather steadily — about 80 percent from those all-time highs.
Looking at the political landscape, Buffett said he would support Mike Bloomberg if the 77-year-old former three-term New York mayor were to run for president in 2020 against Republican incumbent Donald Trump. “If Mike Bloomberg announced tomorrow that he was a candidate, I would say I’m for him,” Buffett said.
There are indications that the billionaire businessman Bloomberg, who switched his party affiliation from independent to Democrat in October, is thinking about running for the Democratic presidential nomination. He was an independent in his third mayoral term. He was a Republicans in the first two.
Making no evaluation of Schultz as a potential candidate, Buffett added, “I think generally [that] third-party candidates, they’re going to hurt one side or the other, and they’re more likely to hurt the side that they actually favor, because they’re closer to that view, and so they pull more people away that would otherwise go with the second-best with that view.”
Buffett said he’s never been a card-carrying Democrat, pointing out that he’s voted for Democratic and GOP candidates over the years.
However, Buffett has been more aligned with Democrats than Republicans on the issue of taxing the wealthy, an issue he’s been speaking out about for years. “The wealthy are definitely undertaxed relative to the general population,” he said.
Sens. Elizabeth Warren, 69, and Bernie Sanders, 77 — both Democratic presidential hopefuls — have called for higher taxes on the rich. Democratic Rep. Alexandria Ocasio-Cortez, the 29-year-old freshman firebrand from New York, has also proposed that wealthy Americans pay more in taxes.
“That probably means more taxes for guys like me, and I’m fine with it,” Buffett said.