WARREN BUFFETT: Bonds Are Terrible And Stocks Will Be A Lot Higher
This comes as The Oracle wraps up Berkshire Hathaway's annual shareholder meeting.
"We cut across the whole economy," said Buffett of Berkshire's businesses which includes railroaders and homebuilders.
"Overall, the economy is improving, but at a slow pace."
Quick asked about the recent all-time highs in the stock market and how people should think about investing.
"They should pay more attention to the milestones to the downside, because that's when stocks are getting cheaper," he responded.
"You'll see numbers a lot higher in your lifetime," added Buffett as he joked about watching the Dow cross 100. On the day-to-day trading, he also warned that people often spend too much time thinking about the short-term.
What about the Federal Reserve's impact on investments?
"Interest rates act like gravity to all asset prices," said Buffett noting that everything responds to rates. "Interest rates have a powerful effect on all assets."
"He's done very well in terms of the United States," said Buffett on Fed Chairman Ben Bernanke.
On Europe, the Oracle of Omaha acknowledged that there were troubles in the region, but that the turmoil had also presented opportunities.
Corporate governance was also a big topic, especially considering Buffett's age. Buffett noted that separating the CEO and board chairman roles makes it easier to replace the CEO if need. Buffett who is both chairman and CEO of Berkshire Hathaway notes that he often leaves board meetings for hours because he believes it's good for directors to talk without having the CEO around.
Buffett's replacement will be one of three men who already work at Berkshire Hathaway.
Quick asked about interest rates and bonds.
"Someday they'll be selling at a yield higher than what they are now," responded Buffett about bonds.
"Stocks were very cheap a few years ago, they're reasonably priced now," said Buffett reiterating his bullishness toward the asset class.
"I do not like owning bonds now," he added arguing that they were artificially priced. "They're terrible investments now."
Buffett is on from 6 AM ET to 9 AM ET.