Buffett lauds Bernanke but laments lack of investment bargains

Thu Sep 19, 2013 7:32pm EDT
 
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By Jonathan Stempel and Peter Rudegeair

(Reuters) - Warren Buffett said on Thursday he would recommend reappointing Ben Bernanke as Federal Reserve chairman, while adding that low interest rates have inflated asset values and complicated his hunt for investments at his company Berkshire Hathaway Inc (BRKa.N: Quote).

The billionaire investor spoke one day after the central bank surprised investors by postponing its expected wind-down of monetary stimulus, which has in five years more than tripled the Fed's balance sheet to above $3.6 trillion.

"Since the panic of five years ago, he's done a terrific job," Buffett said on CNBC television in a joint interview with Brian Moynihan, chief executive of Bank of America Corp (BAC.N: Quote).

Asked if he would reappoint Bernanke when his term expires, Buffett said: "That's what I would do."

Nevertheless, at an event later Thursday afternoon at Georgetown University, Buffett said that the Fed's eventual exit from its monthly bond-buying program will carry unforeseen risks.

"We are in an experiment which hasn't really been tried before," he said, adding that "buying securities is usually easier than selling securities."

Berkshire owns more than 80 businesses in such areas as insurance, chemicals, railroads and clothing, and has more than $130 billion of equity and fixed income investments.

Some of its money went to Bank of America in August 2011, when Buffett announced a surprise $5 billion investment in the second-largest U.S. bank, which has been plagued by bad mortgages and legal liabilities mainly tied to the former Countrywide Financial Corp.   Continued...

 
Investor Warren Buffett speaks to students at Georgetown University with Bank of America CEO Brian Moynihan (not pictured) at an event co-sponsored by Bank of America and the Global Social Enterprise Initiative (GSEI) at Georgetown's McDonough School of Business in Washington September 19, 2013. REUTERS/James Lawler Duggan