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American Morning

Minding Your Business: The Oracle has Spoken to Andy Serwer

Aired October 28, 2002 - 08:48   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


LEON HARRIS, CNN ANCHOR: One man who's doing quite well financially health wise is Warren Buffet. He is hailed as an investment guru, and our Andy Serwer got exclusive with the master.
Andy is "Minding Your Business" now, and you got to spend time with Warren Buffet?

ANDY SERWER, "FORTUNE" MAGAZINE: I did. I was out with him in Pebble Beach, a real hardship assignment. Neither one of us were playing golf. We were holed up in his hotel room, we were sitting around. He had problems with his arm. Warren Buffett, the Oracle of Omaha, arguably the world's greatest investor. He runs an insurance company and a conglomerate called Berkshire Hathaway. And the real story here, Leon, is that Warren Buffett is back. There is the cover story that is coming out today, I'm happy to say. A lot of work with those things.

Warren Buffet is back. And the point here is that during the late 1990s and the tech boom, when all those stocks were going like crazy, everyone's saying to Buffet, you don't get it, you don't understand technology, or buying all those crazy stocks, and he says, I don't understand it, they're all too expensive.

Since then, all those tech stocks, as you and I probably know all too well, have tanked. And Berkshire Hathaway, his stock has gone back up to where it was before. You can see here.

He does not believe in splitting his stock, which is why it cost $73,000 a share. So you really got to save up. He does have some B shares that cost $2,000 or $3,000 a share for us mere mortals. You can see, the stock's up 29 percent over the past three years, while the overall market is down 30 percent. So his way of buying old economy companies makes a lot of sense in this market, and he has really been proven right over the past couple of years.

HARRIS: The thing about that, is it sounds what he did is the same kind of advice we get when we always take to investment experts, who just say, you know, invest in the long-term, don't try to go for the sexy, trendy things, which is what a lot of us did. But how has his company changed all of this time over time, or has it changed over time?

SERWER: It really has, Leon. It's an interesting point. Because he has been known as running this insurance company with investments in large companies, like Coca-Cola, Gillette and American Express. But over the past couple years, he's been buying up a lot of well-known operating companies, and the company is changing, so it's much more like a conglomerate.

You can see here, these are companies that Warren Buffet owns, Geico, the giant auto insurance company, Fruit of the Loom, those are the skivvies, of course -- that's a technical term -- International Dairy Queen, Benjamin Moore Paints, and Shaw Industries, the giant carpet company down in Georgia, and amazingly, people don't know this, 145,000 Americans can now stand up and say, I work for Warren Buffet. That's one of the largest private employers in the United States.

ZAHN: Incredible. How is it that he's got to be that big and he's not a hated figure in this country?

SERWER: You look at him. That's another point, with all of the corporate scandals, and the greed and everything that has happened over the past couple of years. This is a guy who has a tremendous amount of integrity, he's a very gracious guy, he's likes to stay in Omaha. That's another thing, he doesn't want to have too much to do with big cities, those Midwestern values. Some people say, oh, come on, it's an act. I've spent a bunch of time with this guy, and he truly is a nice guy, and a very, very smart guy as well.

HARRIS: I can't believe you guys went to Pebble Beach and didn't play golf.

SERWER: We didn't play golf. What a waste.

HARRIS: It's like going to the beach and not even walking in. Nice going, Andy.

SERWER: I'll bring you next time.

HARRIS: Yes, you better.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com




Serwer>


Aired October 28, 2002 - 08:48   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LEON HARRIS, CNN ANCHOR: One man who's doing quite well financially health wise is Warren Buffet. He is hailed as an investment guru, and our Andy Serwer got exclusive with the master.
Andy is "Minding Your Business" now, and you got to spend time with Warren Buffet?

ANDY SERWER, "FORTUNE" MAGAZINE: I did. I was out with him in Pebble Beach, a real hardship assignment. Neither one of us were playing golf. We were holed up in his hotel room, we were sitting around. He had problems with his arm. Warren Buffett, the Oracle of Omaha, arguably the world's greatest investor. He runs an insurance company and a conglomerate called Berkshire Hathaway. And the real story here, Leon, is that Warren Buffett is back. There is the cover story that is coming out today, I'm happy to say. A lot of work with those things.

Warren Buffet is back. And the point here is that during the late 1990s and the tech boom, when all those stocks were going like crazy, everyone's saying to Buffet, you don't get it, you don't understand technology, or buying all those crazy stocks, and he says, I don't understand it, they're all too expensive.

Since then, all those tech stocks, as you and I probably know all too well, have tanked. And Berkshire Hathaway, his stock has gone back up to where it was before. You can see here.

He does not believe in splitting his stock, which is why it cost $73,000 a share. So you really got to save up. He does have some B shares that cost $2,000 or $3,000 a share for us mere mortals. You can see, the stock's up 29 percent over the past three years, while the overall market is down 30 percent. So his way of buying old economy companies makes a lot of sense in this market, and he has really been proven right over the past couple of years.

HARRIS: The thing about that, is it sounds what he did is the same kind of advice we get when we always take to investment experts, who just say, you know, invest in the long-term, don't try to go for the sexy, trendy things, which is what a lot of us did. But how has his company changed all of this time over time, or has it changed over time?

SERWER: It really has, Leon. It's an interesting point. Because he has been known as running this insurance company with investments in large companies, like Coca-Cola, Gillette and American Express. But over the past couple years, he's been buying up a lot of well-known operating companies, and the company is changing, so it's much more like a conglomerate.

You can see here, these are companies that Warren Buffet owns, Geico, the giant auto insurance company, Fruit of the Loom, those are the skivvies, of course -- that's a technical term -- International Dairy Queen, Benjamin Moore Paints, and Shaw Industries, the giant carpet company down in Georgia, and amazingly, people don't know this, 145,000 Americans can now stand up and say, I work for Warren Buffet. That's one of the largest private employers in the United States.

ZAHN: Incredible. How is it that he's got to be that big and he's not a hated figure in this country?

SERWER: You look at him. That's another point, with all of the corporate scandals, and the greed and everything that has happened over the past couple of years. This is a guy who has a tremendous amount of integrity, he's a very gracious guy, he's likes to stay in Omaha. That's another thing, he doesn't want to have too much to do with big cities, those Midwestern values. Some people say, oh, come on, it's an act. I've spent a bunch of time with this guy, and he truly is a nice guy, and a very, very smart guy as well.

HARRIS: I can't believe you guys went to Pebble Beach and didn't play golf.

SERWER: We didn't play golf. What a waste.

HARRIS: It's like going to the beach and not even walking in. Nice going, Andy.

SERWER: I'll bring you next time.

HARRIS: Yes, you better.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com




Serwer>