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tv   Squawk Alley  CNBC  September 8, 2015 11:00am-12:01pm EDT

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can a business be...alive? good morning, it is 10:00 a.m. at berkshire hathaway headquarters in omaha, nebraska, it's 11:00 a.m. on wall street and "squawk alley" is live. ♪ ♪
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welcome back to "squawk alley," joining us, kate mitchell the founder of scale venture partners, talking some markets today. jump shot fort, kayla tausche are out, but here for the hour, sara eisen. jon steinberg the ceo of the "daily mail," north america. we continue to wait for buffett. in a few moments, a first on cnbc interview with the oracle of omaha. becky quick will have it in 30 minutes. we'll talk markets, economy, china and a lot more coming up soon. in the meantime, we talk about some markets, stocks rallying all morning long. a little off the highs, the dow is up 250. mary thompson on the floor watching the movers. >> we're off the highs of the day, but a strong section. let's check out the vx, the fear index. we saw a hull-back of 10%, recovered as the session has gone on. >> the sectors moving higher.
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leading the s&p 500, we have strength in technology. the semiconductors are stronger, industrials on the heels of the eu or the ecb approval the deal. the dow movers, intel the only dow component to finish the last week, which was the second-worst week of the year for the dow, the only one to finish in the green for the week. extending those gains today. apple ahead of its announcement tomorrow. walmart and bowing also moving higher. want to focus on ge, the european commission approving its deal to buy al stmpb im for $9.5 million. i just got over the phone with the ceo, who said the company showed the right mix of flexibility and resolve. the company had to agree to certain divestitures to get this done. he expects it to grow by double
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digits, as far as oil and gas, which has been a concern for ge, no change to its outlook for 2015. this unit has been cutting costs in the face of lower oil prices, he said we'll revisit this in 2016. as far as his own future in the cup, he says he feels like a 30-year-old. i think if people are looking for immelt to step down soon, i think that would suggest he has other plans. focusing on digital is his next task. checking movers in the s&p 500, teco acquired by a canadian utility. chesapeake moving higher, up about 7. e-trade is restructuring its balance sheet and wholesale funding options and freeport mcmoran, mining stocks, glencorp. said it was restructuring dividend and debt. eliminating dividend and
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reducing operations in its african mines. and microchip reflecting the strength in tech stocks. talk some markets here. the volatility continues today. with the dow and the overmarkets with what the world did over our long holiday weekend. >> a piece in "vanity fair" arguing there's a bubble in silicon valley. at the same time uber raised a lot more money and going into 100 more cities in china. how does the market where we are look through the lens of vc, where you are? >> it's such a mixed message depending on which stage you plan. think if you take the most mature, obviously the public tech stocks are back up. but with the volatility where it is, i think ipos are still going to be a little slow this year. i think late-stage rounds, look you see uber still strong with all the capital coming in. so there still seems to be a lot of enthusiasm there perhaps to
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the detriment of some of the pricing. >> i'm wondered how much of a role preferences play in the late-stage valuations not actually being the real valuation. it occurs to me that the ratchets are really the caveat that goes to this. do you think the private markets are not afraid of the giant prices, because if they win they win and if they lose they get capped downside protection? >> you're all over it. you understand what's happening in silicon valley. a couple of years ago you didn't see those kinds of ratchets, now you have price protection with those, very experienced buyers, which signals a bit of a pull-back. and if we continue to see that, that could be good for this market. but yes, they have price protection typically at ipo these days. >> generally in these cycles, i wonder how long the lag time is from wall street to what's happening in the public markets here to whether it has an impact there. what's usually the timeframe on that? >> well you know it's interesting. we're optimistic in silicon valley. when there's good news in the public markets, we take it right away. when there's a correction, we
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tend to think it happened to somebody else. in all honesty. i think people will be thrilled today and ignore last week. and i think in the long run investors in our asset class, our public investors into our companies are going to take a sharper look. i don't think that's bad for us. we could use a correction here. we're very optimistic. >> kate in nick bilton's piece, which i referenced a couple of moments ago about a bubble in silicon valley. one of his points is that the variety of business models we're seeing are all sort of improvement on what he says domino's pizza mastered in the '80s, trying to get some good to you as quickly as possible. do you think there's really a paucity of ideas here now? and we're not breaking in you true new ground? >> well, i don't actually. but i also think a lot of the value tends to go to those that we all understand. we understand things like domino's pizza. there's a huge amount of remo l remodeling that's happening
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inside data centers in corporate america around the world. but it's very technical. the good news for investors is there's a bigger barrier to entry, because that's one of the things you point out, a challenge with the you know, the repeat businesses that are just reinventing themselves with technology. there isn't often a big barrier to entry. we think there's a good reason to be concerned about those models, but there is technology happening, it just doesn't get the same attention. >> let me get your take on interest rates. as an operating a few weeks ago i would have said now, now i want the quarter of a point because it will stabilize, it will tell marketers who are my clients, it is what it's going to be. what is your take on what you think should happen or the sentiment in the valley around the meeting coming up? >> it's interesting, you're right in that it's all about sentiment. our companies don't borrow a whole lot. so the price increase isn't going to be a huge challenge for us. think we're looking to get it behind us, the marginal cost of capital for the more mature companies will be a good thichb,
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a levining agent. i think it would be a good thing to get that talk out of the market and move forward. >> i wonder about the unicorns being created, the billion dollars, are those kinds of checks going to be written in this environment of higher interest rates and potentially more market volatility? >> i do think there will be some pullback. these are often the same investors that play in the public markets. with volatility where it is, growth looks a little riskier and despite the terms like preferences and ratchets, i think a lot of buyers may pull back. that wouldn't be all bad that will increase the cost of capital on the margin for those late-stage companies. spending in certain cases has gotten particularly high. it probably could use some right-sizing. i don't think it would be all bad. a little leavening agent in this late stage, is always a positive. >> we'll talk to you soon. kate mitchell joining us. when we come back, make sure
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you keep it here, warren buffett is coming up in about 20 minutes. a live first on cnbc interview. which you don't want to miss. in the meantime, stocks still rallying, the dow is up 239, we're below 1950 on the s&p and europe's close the next catalyst for the rest of the trading day.
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welcome back to "squawk alley."
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let's get you a market check with, stocks in rally mode on this tuesday, gaining back all of friday's declines. when the dow fell 270. we're up 260 on the dow jones industrial average, s&p 500 up a little more than 1.5%. all of the major sectors are in green. technology leads. and industrials and financials having a good day. we're moments away from an interview with the one and only warren buffett. make sure to keep it here on "squawk alley." berkshire hathaway's chairman and ceo. a good time to hear from him with all the crazy market moves. a lot of news on streaming video. disney is expanding streaming movie service, adding more partners, including microsoft and amazon. users will be able to buy a a digital copy of a ton of digit at titles and watch it through any service on the crowd. verizon launching a trial version of its own mobile video service, verizon says it will launch near the end of the month. targeting millennials with 100 to 00 hours of exclusive
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content, the "daily mail" is partnering on the service. why, where does this fit? why is this important? >> the two announcements side by side work well. disney wants their content basically anywhere anyone can get it and they want to get paid for it we have a similar attitude as well. elite daily is one of the leading millennial site. largely on youtube. we put that content on spotify's video service, we did that deal now we'll be on verizon's go 90, too people who want to use that platform, will get elite daily content and we'll be able to monetize there. >> 5 g, largely led by verizon is on the way. so all of this consumering on mobile will be a better experience than we're used to, i assume. >> i think when you look at millennials, they're consuming most of the content on phones, 50% of phone video viewing happens in the home on wi-fi networks. it's more and more of the theme of cutting of traditional television. now do i ultimately know which one of these platforms is going
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to win out or if it will be a dispersion of platforms? no, but as a content creator, we're back in the driver's seat and we've got multiple people competing for our content. the only way we can survive and thrive is by being you know, by playing them off one another. >> what do you think about the disney move? where is disney in terms of the older traditional media companies? the content creators in getting their content online? digitally. a move like that? >> i think today's disney announcement is not as interesting as the netflix announcement. they sold into the pay tv window. netflix will get the movies after they come out of theatrical release. this is just if you bought a disney movie, own it you've got the ability to view it on any platform that is your preferred platform. >> amazon planning to release a $50 tablet this holiday season. it would make it one of the least-expensive tablets around. half the price of the current fire hd.
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speaking of amazon, the company said it would allow offload download of treeming view. something that netflix isn't planning soon. because according to its chief products officer, the users couldn't handle the choices. one of the things i've learned is that every time you offer a choice, you paralyze someone who can't decide if that's what they want to do or not. i don't think it's a very compelling proposition. netflix is one of the few stocks in the red after being up 3.5% in the morning. ha do you make of that? >> i can't even comment on it, it's so ridiculous. oh, it's so hard, it's so hard to download, from going an on airplane or the subway, i can't figure out how to use netflix to go offline. obviously there's a real reason. obviously they're afraid of piracy, there's another reason they want to have streaming. maybe they're afraid if you watch offline, you won't circulate to consumption. my ceo walked in and said tessco
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is selling these super cheap tablets in the uk and we're seeing huge web viewing on them of "daily mail" on the cheap tablets. >> $50? >> i think tessco was selling some at that point. there's a manufacturer of these cheap android tablets. >> amazon has launched cheap tablets and it's been a bust. had to take a $1 hin milli00 mi writedown. >> i think this is bad move by netflix. netflix has history of reversing itself when it makes poor decisions. people are in weak wi-fi places, if you've got little kids, you know the buffering drives them crazy. you want good wi-fi networks. i think they have to allow downloading, it makes them uncompetitive not to. >> you're going to be here for the hour which is good news for us. >> encyclopedic. stocks are p in rally mode.
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the dow is up. and the s&p up 1 billion.6%. the next big driver for today's action will be the close in europe. and the interview you can't afford to miss, berkshire hathaway chairman and ceo, warren buffett. i'm here at the td ameritrade trader offices. ahh... steve, other than making me move stuff, what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place that lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. impressive... what's up, tim?
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for all the confidence you need. td ameritrade. you got this.
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want to draw your i tension to another reversal, this time on crude. which was down some 4% earlier. now barely positive. this as all the major averages are up over 1%. don't go anywhere, becky quick's interview were buffett is coming up. as we hang on to gain, about 1.5%. >> shares of apple are up more than 2% this morning. as apple gears up for a big product launch. as they try to revive splugish
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ipad sales. apple shareholder and wedgewood partners ceo, david ralph. what would you like to see, s refresh on the iphone. what would you look for as a positive catalyst for the apple stock? >> i think in terms of catalyst for the stock i'm focusing on the updated iphone. let's face it when iphone is generating 60% of revenues and maybe 80% of operating income, apple usually knocks new iphones out of the park. that's where they have typically been very polished in revealing new features. and i think there's about 275 million apple users that currently have some variation of the iphone 5 and they need to hear a message that's compelling for them to upgrade. and certainly the other products, you know, the ipad pro, the apple tv, that's going to give us a road map to you know where apple thinks their
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company is going to be going in those those two areas. in terms of wall street, we need to have a very good iphone presentation. >> you know, dave when you think about stuff like the ipad pro. 9 to 5 mac is calling it monster screen, all the things that get geeks like me excited. to your point none of that stuff really moves the needle. is there anything coming out of the event that can move the stock at all, you think? >> well surprisingly, i think maybe the ipad pro and the apple tv can move the needful wall street is convinced that these products can disrupt some existing markets and be a meaningful source of new revenue. now it's not going to be anything like the iphone. you think about the apple's ibm and cisco's strategic alliances. think we'll get insight where apple sees that market. let's see if apple tv is ready for primetime and the where the road map may lead if wall street
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starts modeling decent revenue numbers for those two. it starts to move the needle. but it's still going to come back to that iphone. it's, we need a good iphone presentation and i think if apple is successful, if you look at calendar year estimates, not fiscal, but calendar year estimates, i think the street is like 10 and change for 2016. if apple has some success in laying out this road map, executing, we think that earnings for calendar year 2016 may start to approach 11 a share, the stock cheap. >> michael gereman says they've sprinkled a little more sugar on this one if the force touch technology alters the way people think about their phone. >> i think it might be different
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in this case. in terms of if if there's another level of forced touch, maybe a third dimension, if the software with force touch allows simpler navigation, there's so many people that are very comfortable with the user platform of the iphone. think that's an easier evolutionary aspect to the iphone. and i think we're going to get a faster modem and some faster chip. think it's going to be a compelling s cycle upgrade. >> david, let me take the new product to me that has the most chance of moving the needle. which is the apple tv. the apple tv with the $40 a month cable or television bundle. how do you model that? that strikes me as something that could be as big a business as a netflix. especially in they roll into original content creation. >> that's the biggest news that may come out of this. if the new apple tv and apple's aspiration of getting more video
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content, maybe some original programming, you start pencilling in those realities, it does start to move the needle so this may be the breakout product announcement for apple tv. we think so. it's going to be an interesting day tomorrow. >> barry, quickly it looks like apple is your fifth biggest holding in your portfolio as of the beginning of august, 6%. what have you been doing in the last few weeks? are you buying more as the stock has sold off? >> we upgraded to our second largest position. we only 22 stocks, so apple is very important for us. we've owned it continuously since 2005. >> is your number one position still berkshire? >> it sure is. >> stay with us, we'll get your reaction after becky quick's interview with berkshire hathaway's warren buffett. the european markets closing in a few moments. german dax led the way up 2% after trade surplus numbers hit
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the highest level on record. also up, considerably, the pan european stock 600, the ftse 100, the french cac, luckluster data from asia overnight. the european commission clearing the way for ge's acquisition for alstom's power company. when we come back, make sure you keep it here as sara said, the interview of the morning. the oracle of omaha, warren buffett will join us. opinions. there's no shortage in this world. who do you trust? whose analysis is accurate? how do you make sense of it all? a simple, unbiased stock score consolidated from the opinions of independent analysts... is that too much to ask?
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good morning, everyone, i'm sue herera, here's your cnbc news update. three more democratic senators, gary peters of michigan, ron widen of oregon and richard blumenthal of connecticut say they will vote in favor of the iran nuclear deal this gives president obama the 41 votes he needs to prevent a resolution against that agreement in congress. the family of freddie gray, the baltimore man who died from injuries sustained while in police custody have reached a $6.4 million settlement with the city. the settlement still needs the approval of the city's board of estimates, the death sparked days of riots in baltimore. demonstrators gathering
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outside the conduct jail where county clerk kim davis is being held. senators will meet with her today to show their support. and the minnesota dentist who killed cecil the lion in zimbabwe returned to work this morning. half a dozen people protested his arrival. back to "squawk alley." a lot of green on wall street, all major averages are up more than 1% as we speak. ahead of the conversation with warren buffett. with our own becky quick, but first we check the nasdaq movers with bertha couples. >> the nasdaq composite is shyer. the 100 are in positive territory for the year with half of the big caps now positive year to date. it's up about 12.5% from the
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august 24th low. apple is, ahead of its product event tomorrow adding the most weight to today's gains. with today's move, apple shares are now up more than 20%. from its 52-week low. back on august 24th. a key tech conference this week could also provide a boost to the sector as well. chips in particular today. higher after microchip raised guidance in conjunction with its appearance at the city global tech conference. others slated to present are sandisk, yahoo. biotechs are higher, there's a big conference on tap. and ubs is upgrading sector names, amgen to a buy from neutral and it's a fairly broad rally as you look. a lumber the large-cat stocks, ebay, facebook have moved out of correction territory. back it within 10% of recent
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highs, but netflix trading on strong volume and after starting higher, falling into negative territory for the seventh straight session. and netflix one of the few stocks trading at nearly all of its daily volume. and we're not even halfway into the day. back to you. >> that's been the one to watch this morning. berta, thank you. it was up 3.5% at the the open. and now in the red pretty nasty intraday reversal. people are looking for reasons today. is it because of what an apple tv may pose tomorrow? >> i think it's because of whenever we talk about streaming in general. as being exciting area that everybody is looking at, that's bad for netflix, to have ari from lion tree come on. i'm looking at one of mahaney's most recent netflix reports, you see "orange is the new black" and "house of cards" and enormous trailoff. and the interface layer for
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netflix is almost abstracted, when you watch it on a smart television, so all they have is hit content. their one viacom move away from someone doing a original tv series which is very competitive. mr. robert could have been a netflix did. that's very threatening to them. >> you're saying they're learning what media companies, what content creators have known for years. that is that you get a hit every now and then, but your losers are going to far outway the number of winners. >> there's no "there" there. no one cares about paramount being the studio or disney being the studio. they care about frozen, they care about a particular show. no one cares about netflix. they want to watch "orange is the new black," but the minute that somebody else has better content -- who cares. >> and the distribution continues to heat up. "wall street journal" dow jones industrial average made a point even the 20% sell-off we've seen in netflix shares, they're still trading at a high valuation, nearly 90 times next year's
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earnings. >> when we come back, stocks still in rally mode ahead of our interview with warren buffett. eel talk markets, the economy, china and more after a break.
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the annual lunch with warren buffett is today. the winning bidder of theo for the lunch paid over $2.3 million to have lunch with the oracle of omaha. let's send it over to becky quick, who is with the man
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himself. >> thank you very much. we are live, with warren buffett. warren, $2.3 million is a lot of money to pay for a lunch. i know it goes to glide, but you're no cheap date. >> just think of the tip. >> i'm really glad that we have you here today, because we've been watching the markets and there's been so much volatility. so much concern. even today, this morning, the futures at one point up over 350 points before the market opened. why is this taking place? >> i'm no good on what's going on in markets. i have no idea what will happen tomorrow or next week and sometimes they're, they get very volatile lying this and other times they put you to sleep. but the important thing is where they're going to have in five or ten years. and i'm confident they'll be considerably higher in ten years. and i really have no idea where they'll in ten days or ten months. >> on "squawk box" this morning it was said that he thinks that some of it is haas with the forced computer buying taking
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place. is there any truth to that? >> it doesn't make any difference to us, if we're buying a stock, we try to buy a given percentage of the volume that's trading that day. same way for selling. so down days i like because we buy them cheaper and we don't try to really figure out what's going on in markets. i've never been any good at it. >> have you seen the recent pull-back as a reason to be buying? >> well we, we're buying because we like what we're buying in relation to its long-term prospects if we liked it at x a few weeks ago and it's 95% of x now, i like it even better and if it goes to 90% of x i'll like it still better? >> what stock are you talking about? >> you probably know the name, but i wouldn't to bore you with it. >> when we spoke with you on the phone on august 10, you kind of hinted that you might have been buying more shares of ibm in the second quarter. those filings came out and surprised us. that there weren't any additional purchases in the second quarter.
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>> well i owe you one on that because i thought i was buying it. in that quarter we bought it in the first quarter. and normally i wouldn't tell you this, but we bought some in the third quarter. i thought there was purchases in the second quarter. i wouldn't have said that unless i thought the number was going to be a little bit higher. i was wrong. we have bought a little in the third quarter and we did buy it in the first quarter as well. >> that was august 10th. i take it you were buying in the third quarter before august 10, even before the market volatility. >> don't remember that exactly and i got in trouble giving an answer where i didn't remember perfectly before. so i'll leave it at what i said, we bought it in the first quarter and the third quarter and we did not buy in the second quarter even though i kind of thought that we had. >> you've been spending a lot of money with precision cast parts. you have obviously spent billions and billions of dollars. >> but we're getting ready to spend it. >> does that leave you short of cash. when you see a pullback of 10%
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or more, does it make it tougher for to you come up with the money to buy things. >> we know we're going to be laying out 32 million in the next four or five months so i've still got money left to buy. i'll never go below $20 billion of cash, i won't even go close to it because i don't want to go below it and i promised i won't go below it we may be a little less aggressive in buying things in the open market. but if we're buying and we're spending say 500 million a week, in three or four weeks, that's just a couple billion dollars, so the 32 billion is the big chunk it really, i haven't held back from doing anything because of that upcoming purchase. >> is 500 million, is that a normal week at berkshire? >> it can be. sometimes it's 200 million. sometimes it's a little more. it depends on, usually when stocks are going down, the volume picks up. if we're buying 20% of the volume, we will be buying more
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per day on big down days. than other days. >> i like high-volume days from the standpoint of our purchases, because i think if we buy more than 20% a day we're probably affecting the price too much. and on the other hand, i like to buy as much as i can get. so i hit on the 15 or 20% a day. >> let's talk a little bit what else we found out in the most reest filings that came out. phillips 66 you thousand have a $4.5 billion stake in the company? >> that's correct. >> this is something that you traded out your shares for at the end of 2013 for i guess some pipelines that you were -- >> we traded the shares, we were able to do it on a tax-advantaged basis, we didn't trade them because we disliked the stock. i liked the stock when we traded it. it was a chance to do a transaction to buy an asset we liked very much. to do it on a tax-free basis, they could do it on a tax-free basis and i had always intended that we would come back in.
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assuming that the price was right. and we did. >> it must be very specific to phillips 66. because you sold your shares of exxonmobil i think in the fourth quarter last year. >> they're in different businesses, to some degree. phillips 66 has no upstream production, that probably accounts for the bulk of the value of annex saun. on the other hand, phillips 66 is not a pure refiner. they've got a big chemicals division, a mid stream business. so it's not, we're not buying it as a refiner, we're not buying it as an integrated oil company we like the management very much. ever since greg garland has take tn over after it spun out of conoco phillips, he's done a terrific job. so i've liked the company. >> is it something that you could see eventually adding by buying the company outright? >> well, we, that's a long, it would be a long stretch from here and we never, we would only
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do something in any company if the company wanted us to. and i think they're very happy to be independent. >> are there other opportunities that you see in the oil and natural gas positions at this point? just because of the huge drop we've seen in oil and gas. >> i think that's the only oil company that's connected with the oil and gas industry that we own. although precision cash parts makes equipment for the oil industry. and our operation produces chemicals used in oil and gas production. >> let's talk about the economy. the last time we spoke with you, you said you thought it would be a tough call from the federal reserve. since then you've had fantastic economic news that's been coming out with the jobs report and unemployment looking at its 5.1%. auto sales that came in at 17.8 million. back to what we were seeing in the prius prooe 2007 period. all of those things add up to a great economy, yet the market's
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volatility could be something that would keyed the fed on pause, how do you do the calculation? >> i have always thought they would be slow just because of the effect on currencies around the world, if our interest rates keep getting stronger when europe is trying to keep them low. one thing you have to be careful about in gdp statistics, when we talk about earnings of companies, we talking this year versus last year if we say they're up 5%. gdp, when we talk quarterly, we're talking about sequential. if you talk about year-over-year figures on gdp, they're 2 and a fraction percent, they've been that way quarter after quarter. but the quarterly figures, when you multiply something by four, little changes get multiplied a lot of the the seasonal adjustments of the current period and last period, they control those quarterly numbers a lot when you report sequentially. in a way it's better to look at them year over year and year
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over year we've been in the 2.5% range for six quarters or something like that. so i would, i would be a little careful in getting too excited about quarterly statistics. in either direction, as long as you're looking at them sequentially. >> so you think the economy is not necessarily as strong as the most recent numbers we've seen? >> i think we're still on the path we've been on for six years, where it's growing to a little at a little bit better than 2% annually. that's not a bad rate. but it's not a booming rate. i think that's where we still are. >> it may not be a booming rate for the economy. but it's probably not an economy that warrants 0% interest rates. that's a fire sale, that's an emergency sort of situation. >> why not move off of zero? >> i don't know. like i say, if our rates got substantially higher than europe's, i would not think think that would necessarily be
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good for exports for this country. in the economics you can never just do one thing. there's always and then what? i think the and then what of moving rates up substantially while europe is trying to keep them very low, going to have some consequences down the line. >> do you think this fed has a different job? have things gotten that much more global and out of the fed's control? >> i think they have to think about everything, that's their job, they're looking at a lot of things i'm not looking at and they get better information i'm sure objen lots of things. i don't envy their job and by their commentary they're pushing themselves where they have to do something here. i would not be terribly aggressive if i was in that position. >> some people are in the camp of raise it 25 basis points and back off and don't do anything for a long time. which is fine in theory. but the market doesn't know what you're doing until you watch on a day-to-day basis. >> i've never made a decision on what i think the fed is going to
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do near-term or longer-term. when we decided to buy precision cash parts, there wasn't one word of conversation with my partner, charlie or with our board of directors about fed action. >> r and the same thing goes with our purchase of phillips 66. >> in may when i spoke with you and bill gates in omaha for the annual berkshire hathaway meeting, you said whether the stock was fairly valued or not depends on what happens with interest rates. if interest rates go up does that change your perspective on the value? >> not if it goes up 100 basis points if it goes up 400 points that would change it a lot. >> 100 basis points, if interest rates, if you guarantee me interest rates would be at 100 basis points higher than this for the next 20 years, i would be buying stocks hand over fist. >> we know that there are a lot of stocks you've been involved with. bank of america is one of them. i think you own nonvoting shares? >> nonvoting shares. >> you won't get the chance to
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vote but we'll ask you your opinion. bank of america, there's been a lot of turmoil about the idea of brian moynihan taking the role of ceo and chairman. it went against a 2009 proxy vote that was to keep those two roles separate. now they're going to be asking shareholders directly what do you think? >> well if i could vote, i would, i would vote as management suggests, which is to have brian take on the ceo and chairman job. >> are you bothered by the idea that of just how it was done? how the board did this and ignored what was a binding proxy vote from 2009? >> i dpes they're putting it back to the shareholders now? i'm not -- i do not think that's a big deal. i think that what brian does, brian has done, he took a company that was just a terrible mess, i mean it's been virtually destroyed, the public hated it, government hated it. all kinds of lawsuits coming in and employee morale was
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terrible. he's resuscitated it. >> it was a company in crisis and as somebody who has been in business for a long time you've been through a crisis or two yourself and i think you've come up with a motto that you tell people to stick with, get it right, get it fast, get it over, but get it right first. >> you got to get it right, get it fast, get it out and get it over. but you got to get it right first. that's what he's worked at doing. >> do you think that's what hillary clinton has done with the email situation? >> that's slippery. i would say that no, i would say it was a mistake, it was a mistake to have the private server and i think it was a mistake, in the first talk she acknowledged the fact she would have done it differently, i think it's better to be very blunt in those kind of situations say i made a mistake and you know, fortunately, not result in any breach of security or confidential. but the best thing to do is get it behind you. >> it's been months and months
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of this. as recently as last month she was making jokes about it. kind of comparing it to snapchat. does that bother you as a supporter? >> i don't think it was the best way to handle it. it doesn't bother me. what i care about with hillary is i care about what she would do if she were president of the states and her ability to do it if she becomes president of the united states. think in those both respects, i'm a terrific supporter. >> we've been watching her poll numbers, the most recent poll shows that you actually have bernie sanders who has a lead over her in new hampshire and iowa, are you surprised by that? >> i'm surprised, but i think bernie sanders has been a tresk campaigner. he campaigns exactly ace hope i would campaign as a candidate. >> how so? >> he's been forthright. he's not been knocking the other candidates. he doesn't, not going around saying nasty things about other people. he's just saying here's my program. if i get elected i would want to have any judge be pledge to
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getting rid of citizens united that i care about all the people that are being left behind. i think he's run a model campaign. he's not going to get elected, but i think he, i admire him. >> in terms of joe biden potentially getting into the race, do you know him? what do you think of him? >> i probably only met him once or twice in my life. he's run for president twice. he spent 40 years in politics, nobody runs for president twice and gets to be vice president that doesn't consider running again, if they think they have a chance, a reasonable chance and i'm sure that's what he's weighing, plus he has all the personal problems to deal with i think if he thinks there's a reasonable chance of getting the nomination, think he'll run and. it does get tougher as the weeks go by. >> the personal pronblems, the death of his son? >> yes and his son expressing to him that he hoped he would run. that's an added burden in effect.
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>> we have been watching donald trump closely and i know we've spoken -- >> you and 320 million other americans, yeah. >> do you watch his press conferences? >> oh sure. how you cannot watch them? >> he said something very interesting the other day. he said that jeb bush and hillary clinton are owned by billionaires and by special interest groups, that the reason you should support him is because he's not owned by people like you. >> i don't believe that's true. i believe that, i believe that billionaires and special interests have a greater influence in politics generally than i would like them to have and i think citizens united opened the barn door on that but in terms of either one of those people being owned, that that, that would not be true. ? in terms of what he's able to tap into, though, there's something that he's really connected with. >> for upset with the establishment, they like people
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from the outside. i think in the republican polls, if you take trump, fee arena and carson and add them up, it's more than half of the republican voters. >> the feeling of the american public, the democratic race, although sanders has been in. there's a, there's a feeling i'm fed up so i want something else. >> what do you think happens, how does that play out? >> the republican, i mean the republican race reminds me of being at an amusement park and watching all the kids in bumper cars. you've got 1700 bumper cars smacking into each other. and i think it will get sorted out. but there's no question that what you're seeing is indicative of a lot of dissatisfaction. in the country with washington politics and perhaps the media to some extent, too. >> warren, i want to thank you very much for your time today. we really appreciate it.
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>> thank you. >> and we hope you enjoy your lunch. >> i will. thank you. >> and carl we send it back over to you. >> becky quick with warren buffett ahead of the lunch where the lucky winner paid 2.3 million to dine with warren buffett. a wide-ranging conversation. everything from his holdings in ibm. buying in the third quarter to the federal reserve and hillary clinton. joining us to react to becky's interview with warren buffett. we've got david wolfe, i'll ask you, what did you think about the specifics when it comes to the holdings. he admitted to not buying in the second quarter, he said he was buying in the first quarter and the third quarter, talked a little about his investment in phillips 66 and the why behind that. >> i thought his comments on phillips 66 was quite interesting, i think he gave as you little clue there. any time buffett talks openly about the ceo, and in this case, greg garland at phillips 66 and
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how much that buffett may admire a ceo, there's a good chance it's going to be a big holding. he talks quite a bit about his admiration of the ceos of the ibm and others of his top holdings. if you include the 700 million warrants of bank of america. buffett has five stocks that are, that dominate his portfolio. and i think phillips 66 is, is probably on that path now, too. >> dennis, obviously warren buffett reminding us in a very bust fte-like fashion, that he doesn't watch the daily moves of the markets, he can't figure that out, it's about the five to ten-year horizon and he says stocks will be considerably higher no matter what the federal reserve does. he basically said i've never made an investing decision based on what the fed or does not do. >> surprisingly buffett was very buffett like.
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he said weather the fed moved 25 to 100 basis points, it wouldn't have any long-term effect. it's a good reminder in the media about us as we obsess. in the end, 25 basis points i it's not that much. 50 basis points, it's not that much. i think he's got a good lesson for us all in describing his remarks that way. >> if you're joining us by the way and missed the top of buffett's interview with becky. he said he bought some ibm in the third quarter. he said he still has some money left to buy but tries to keep $20 billion in cash. he talked to what degree berkshire is actively buying stocks, especially on heavy down volume days. take a listen to this. >> it doesn't really make any difference. if we're buying a stock, we try to buy a given percentage of the volume that trades that day. same way if we're selling, although we don't sell very often. so down days i like because we buy them cheaper. and we don't try to really
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figure out what's going on in markets, i've never been any good at it. >> also struck by his dovish tone on rates saying he wouldn't be terribly aggressive if he were on the fed. that gdp is not collapsing, but certainly not booming. >> and not differentiating between 25 basis points and 100 basis points. my question for dennis is i know it's sacrilege to criticize anything that warren buffett does. buying on ibm? no long-term path on that one. >> not the best period for ibm. they're trying to meet their dividend and starving their company of a lot of real investment so i will not be a knee-jerk defender of warren buffett. but i think it's for those reasons, where the crowd thinks he's making a bad move, historically he has made the right one. >> david, i just mentioned the dovish tone he took on rates for those who missed it. here's what buffett just said about the federal reserve and a
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would-be hike. >> if interest rates, if you guarantee me interest rates would be at 100 basis points higher than this for the next 20 years, i'd be buying stocks hand over fist. >> so 100 basis points, but it's got to stay there for 20 years, i'm not sure i would take that bet, dave. >> i would take the same bet and i would have the same type of average. but i will say it's interesting. you know just a couple of weeks ago we had all of these market volatility. we had this thought that the fed was going to have maybe one hike in september, one and done. and we had all of this market volatility. so i grew with buffett. 100 basis points, it's not going to be a big deal. if the market priced in 100-basis point move i think we would have extreme down side volatility. which would be great. that's buffett's playbook for another 50 years. if the market can't digest 25 or
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50 basis point -- just the thought of of it, can you imagine what would happen if we had 100 basis points, the i think the market would be cut in half. >> 100 basis points for 20 years, i would be freaking out for the state of business economy. >> have you heard from others, dennis that the pcp deal was too rich? is that he's doing types of moves that aren't historically buffett like? >> i think pcp is a very unique company. whatever price he's paying, there aren't that many companies that do that kind of work. if he's buying into the market. he's got to pay the prevailing valuations. >> i want to mention, he's a hillary clinton supporter. he said it was a mistake to have the private server and wasn't the biggest fan of the way she handled it?
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>> someone's behavior before they're president bothered you, but five minutes later when they're president, that's what you're worried about? >> thanks, guys, a nice coda to what becky did. thank you very much, guys, let's get back to headquarters, wopner and the half. ♪ ♪ >> welcome to the halftime show, let's meet our starting lineup for today. jim lebenthal, with joe terranova, josh brown and pete najarian. buffett speaks, the oracle of omaha sitting down with our own becky quick, the halftime highlights and trades are just ahead. calls of the day, fitbit, wells, micron and more on the move at this hour. now our experts decide whether the analysts hit or miss the mark. stocks shooting sharply higher. tech and financial stocks leading the way higher. a big dayor


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