market folly

Charlie Rose recently sat down with both Warren Buffett of Berkshire Hathaway as well as Bill Gates of Microsoft. 

They started off talking about the giving pledge and philanthropy and they've been surprised at the overwhelming participation. 

On business, Buffett noted that it's imperative that he be able to know and understand the business and to stay within that sphere of competence.  Of his two younger managers (Ted Weschler and Todd Combs), he notes, "I have two people who themselves have different circles of competence."  They weren't chosen because of that, but it's nice to have a huge circle he says.

He says it's harder to find acquisitions mainly because of the size of Berkshire these days.  On how he finds them, he might get a call, he might be thinking about certain areas.  Occasionally, he decides to act.

One key takeaway from the interview was that Buffett said,"We've bought $12 billion net of common stocks since the election.  (Ted and Todd) have probably bought some too." 

When asked by Rose about his purchase of airline stocks last year, Buffett said it was largely his decision to do so.

The conversation then shifted to allocation of time and Gates poignantly noted that, "You control your time.  Sitting and thinking might be a much higher priority.  It's not a proxy of seriousness that you fill every minute of your schedule."

Buffett added, "I can't buy time" and Rose noted it's the most precious resource.

Buffett thinks a 4% growth rate that the Trump Administration is targeting is pretty high and in actuality, a 2% rate would be fantastic and could potentially be possible.

Embedded below is the video of Charlie Rose's interview with Warren Buffett: