LV--Well, this may interest you>>Buffett says U.S. stock prices need rosy scenerio
NEW YORK, May 14 (Reuters) - Billionaire investor Warren Buffett, chairman of Berkshire Hathaway Inc., said in a taped
interview released on Thursday that a rosy scenario was necessary to justify current share prices.
The comments, made May 8 in an interview taped for television, were released on Thursday and will air May 16 on ''Adam
Smith's Money Game,'' a public television show.
The comments were released as Berkshire Hathaway, Buffett's diversified holding company, announced that earnings surged to
$722 million, or $582 per share, in the first quarter, from $284 million, or $231 a share, in the year-ago period.
The company, whose main holdings are Coca-Cola Co., Gillette Co., American Express Co., Walt Disney Co. and
McDonald's Corp., saw its realized investment gains soar to $470 million from $21 million.
When asked by interviewer Adam Smith if corporate profits could continue to grow at current rates, Buffett said: ''I don't want
to bet on it continuing. But I am saying that if it does continue then stocks are not overvalued, but it takes a rosy scenario to
justify these prices.''
Buffett said he did not think stock prices had much margin of safety now. ''It leads to caution,'' he said. ''But it doesn't predict
a bear market.''
''I don't think there is much of a margin of safety in stock prices right now,'' he said. ''No, there is not a margin of safety.''
Buffett also commented on the recent wave of massive merger deals, saying when asked that they were partly driven by the
egos of chief executives.
''It is not fun if you are a CEO to look around and see your competitors or colleagues making deal after deal and being
plastered all over the press and to sit there and say, 'I don't think these deals make sense,''' he said. ''And you have got other
constituencies urging you on.''
When asked about derivatives, Buffett said it would be nearly impossible to regulate them at this point.
''They are here to stay and I think regulation would be almost impossible,'' he said.
|
