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NEW YORK, May 2 (Reuters) - Warren Buffett, chairman and
chief executive of conglomerate Berkshire Hathaway (NYSE:BRKa) BRKa.N ,
said Monday he would be more likely to buy than sell IBM (NYSE:IBM) shares
over the next two years, and that he did not seek to profit from
global central bank actions.
Buffett, who presided over Berkshire's 51st annual
shareholder meeting in Omaha, Nebraska over the weekend, told
cable television network CNBC: "We would be much more likely to
buy more in the next 12 or 24 months than we would be to sell
shares, but we will make that call as time goes along."
Buffett, whose Berkshire held an 8.59 percent stake in IBM
IBM.N as of the end of last year and who has caught some flak
for his stake, said his cost basis in IBM was around $170 a
share and that he had still never sold a share.
IBM shares fell 0.4 percent to $145.34 late Monday
afternoon.
Buffett also said he did not seek to profit from global
central bank monetary policies, but that low and negative
interest rates could produce an unanticipated reaction.
"It's a fascinating movie to watch. I don't try to make
money off the movie," Buffett said.
"If currency in a bank is worth less than currency in your
hands or in a mattress, that could produce something in the way
of behavior that nobody has ever anticipated."
Buffett, whose Berkshire is an American Express (NYSE:AXP) AXP.N
shareholder, said the company's loss of its contract with
retailer Costco Wholesale Corp COST.O was "significant" but he
agreed with American Express Chief Executive Kenneth Chenault's
decision to split from Costco.
He said American Express would remain "under attack" from
alternative payment methods, but he was confident in his stake.
"Costco was a very, very, very valuable co brand to have for
American Express, but that value wasn't limitless," he said.
Berkshire Vice Chairman Charlie Munger told CNBC, however,
that he would have made the opposite decision with regard to
American Express's contract with Costco.
Buffett also criticized companies that repurchase their own
shares at too high a price: "They have in mind a limit as to
what they pay for any business they buy except their own, and it
has become fashionable to repurchase shares."
Buffett, who has ordered that most of the money he is not
giving away at his death should be placed in an index fund, also
said active investing as a whole was "certain" to produce
worse-than-average results.
Buffett and Munger added to previous criticisms they have
made of embattled drugmaker Valeant Pharmaceuticals (NYSE:VRX)
International Inc's VRX.TO drug-price hikes.
Buffett said there "really wasn't any defense" for Valeant's
price hikes, while Munger said Valeant was "leading the pack" of
certain industry players who were raising prices dramatically.
"I don't think you'd want your son to grow up and run a
company in the manner that Valeant was run," Buffett said.
Munger said he suspected it was "massively stupid" for the
U.S. government to rely heavily on printing money and lightly on
fiscal stimulus for infrastructure, and that the United States
would have been better off with more fiscal stimulus.
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