First On CNBC: CNBC Transcript: Berkshire Hathaway's Warren Buffett Speaks with CNBC's Becky Quick Today

WHEN: Today, August 30, 2018

WHERE: CNBC's "Squawk Alley"

The following is the unofficial transcript of a FIRST ON CNBC interview with Berkshire Hathaway Chairman and CEO Warren Buffett and CNBC's Becky Quick on CNBC's "Squawk Alley" (M-F 11AM – 12PM) today Thursday, August 30th – Buffett's 88th birthday. The following is a link to video of the interview on CNBC.com: https://global-deals.online/video/2018/08/30/warren-buffett-apple-fed-campbell-buybacks-stocks-markets-investing.html%3C/a%3E.%3C/p%3E%3Cp%3EAll references must be sourced by CNBC.

BECKY QUICK: CARL, THANK YOU VERY MUCH. WE'RE AT SMITH AND WOLLENSKY WHERE THE LUNCH FOR THE ANNUAL GLIDE FOUNDATION LUNCH THE CHARITABLE AUCTION MR. BUFFETT DOES IS TAKING PLACE. THANK YOU FOR BEING WITH US TODAY. WE APPRECIATE IT.

WARREN BUFFETT: I'M DELIGHTED TO BE HERE.

QUICK: THE WINNER FOR THE GLIDE FOUNDATION AUCTION PAYING $3.3 MILLION TO HAVE LUNCH WITH YOU TODAY. WHAT ARE YOU GOING TO SAY TO THEM TO MAKE IT WORTH THEIR WHILE?

BUFFETT: WE'LL TALK ABOUT WHATEVER THEY WANT TO TALK ABOUT AND AS LONG AS THEY WANT TO TALK. ANY SUBJECT THEY WANT TO GET INTO, EXCEPT WHAT I'M BUYING CURRENTLY. I LOVE TO TALK ABOUT WHAT THEY WANT TO TALK ABOUT.

QUICK: IS IT COMMON TO BE ASKED FOR STOCK PICKS IN THESE LUNCHES?

BUFFETT: NO, ACTUALLY IT ISN'T. I CAN'T RECALL EVER BEING ASKED. WE TALK ABOUT FAMILY. ACTUALLY, THE COUPLE THAT BOUGHT IT THIS YEAR BRINGING ALONG TWO SMALL CHILDREN AND WE TALK ABOUT THE CHILDREN, RAISING KIDS, A LOT OF THINGS. IT'S NOT ALL STOCK OR BUSINESS OR FINANCE AT ALL.

QUICK: WELL, LET ME BE THE SKUNK AT THE GARDEN PARTY AND START ASKING ABOUT SOME OF THE THINGS. YOU ARE JOINING US ON A DAY WE HAVE WATCHED THE STOCK MARKET CONTINUE TO SET NEW HIGHS, THE S&P, THE RUSSELL AND THE NASDAQ. THE DOW IS NOT FAR OFF THE QUESTION WE ALWAYS ASK YOU IS DO STOCKS LOOK EXPENSIVE TO YOU AT THESE PRICES?

BUFFETT: DEFINITELY. IF YOU HAD YOUR CHOICE BETWEEN BUYING AND HOLDING A 30-YEAR BOND FOR 30 YEARS OR HOLDING A BASKET OF AMERICAN STOCKS, THERE'S JUST NO QUESTION, YOU'RE GOING TO DO BETTER OWNING STOCKS. IT'S MORE ATTRACTIVE THAN, CONSIDERABLY MORE ATTRACTIVE THAN FIXED INCOME SECURITIES THAT DOESN'T MEAN THEY'RE GOING TO GO UP OR DOWN TOMORROW, NEXT WEEK OR NEXT YEAR, BUT OVER TIME, A BUNCH OF BUSINESSESTHA ARE EARNING HIGH RETURNS ON CAPITAL ARE GOING TO BEAT A BOND THAT'S FIXED AT ROUGHLY 3% FOR 30 YEARS, AND IT'S NOT MY FIELD OF SPECIALTY, BUT ACTUALLY THEY LOOK, STOCKS GENERALLY WHICH ARE, THEY'RE AMERICAN BUSINESSES, $30 TRILLION WORTH OF THEM AND THEY LOOK CHEAPER THAN GENERALLY REAL ESTATE.

QUICK: IS THAT THE ONLY THING THAT MAKES STOCKS LOOK ATTRACTIVE RIGHT NOW IS THE COMPARISON WITH FIXED INCOME?

BUFFETT: WELL, THAT'S WHAT YOU HAVE TO DO IN INVESTING. I MEAN, YOU'RE SITTING WITH SOME CASH IN YOUR POCKET. YOU'VE HAD SAVINGS, AND THE QUESTION IS WHAT DO YOU DO WITH IT? YOU CAN BUY A DUPLEX NEXT DOOR AND RENT IT OUT TO PEOPLE AND DO FINE OVER TIME OR BUY A SMALL PIECE OF FARMLAND OR SOMETHING OF THE SORT OR YOU CAN PUT IT INTO SOMETHING FIXED INCOME, BONDS OR BANK DEPOSITS OR WHATEVER IT MAY BE, AND STOCKS IF YOU LOOK AT AMERICAN EQUITIES, AMERICAN BUSINESSES EARNING A LOT OF MONEY RELATIVE TO THE CAPITAL FOOTING, AND THE REASON STOCKS ARE WORTH A WHOLE LOT MORE THAN THEY WERE 20 YEARS AGO OR 50 YEARS AGO OR 100 YEARS AGO IS COMPANIES HAVE PLOWED BACK PART OF THE EARNINGS. WITH A BOND YOU GET IT ALL OUT IN INTEREST, YOU GET YOUR 3% OR WHATEVER IT IS AND THAT'S WHAT YOU HAVE WITH STOCKS MAYBE A 3% DIVIDEND BUT THEY'RE PLOWING MONEY BACK OR REPURCHASING SHARES OR DOING SOMETHING, AND OVER TIME, THAT JUST MAKES A HUGE DIFFERENCE.

QUICK: THE REASON I ASK ABOUT STOCKS SITTING AT THESE NEW HIGHS AND WHETHER YOU THINK THE MARKET IS EXPENSIVE IS BECAUSE THERE ARE RETAIL INVESTORS SITTING AT HOME AND WHEN NIGHTLY NEWS TALKS ABOUT HOW THE MARKETS ARE AT NEW HIGHS SOME OF THE RETAIL INVESTORS WHO HAVE BEEN SITTING ON THE SIDELINES THINK MY GOSH, I MISSED MY OPPORTUNITY AGAIN. THE LAST TIME WE TALKED TO YOU, YOU SAID YOU WERE STILL BUYING STOCKS. ARE YOU STILL RIGHT NOW?

BUFFETT: WE'RE BUYING STOCKS THIS MORNING, AND I'D RATHER BUY THEM CHEAPER, BUT I'VE BEEN BUYING STOCKS SINCE MARCH 11th, 1942, AND I REALLY, I BOUGHT THEM UNDER EVERY PRESIDENT, SEVEN REPUBLICANS, SEVEN DEMOCRATS I'VE BOUGHT THEM QUARTER AFTER QUARTER. SOME OF THE BUYS WERE TERRIFIC, SOME OF THEM WEREN'T AT SUCH GOOD TIMES AND I DON'T KNOW WHEN TO BUY STOCKS, BUT I KNOW WHETHER TO BUY STOCKS, AND ASSUMING YOU'RE GOING TO HOLD THEM, WOULDN'T YOU RATHER OWN AN INTEREST IN A VARIETY OF GREAT BUSINESSES THAN HAVE A PIECE OF PAPER THAT'S GOING TO PAY YOU 3% IN 30 YEARS OR SHORT TERM DEPOSIT THAT PAYS YOU 2% OF THE SORT.

QUICK: NO ARGUMENT. YOUR CONCENTRATION IN THE STOCKS YOU OWN HAS GOTTEN A LITTLE MORE CONCENTRATED RECENTLY, THERE WAS A FILING THAT CAME OUT NOT TOO LONG AGO THAT SHOWED BERKSHIRE HATHAWAY WAS CONTINUING TO BUY SHARES OF APPLE. THAT STOCK IS ALSO A NEW ALL-TIME HIGH LAST NIGHT.

BUFFETT: YES.

QUICK: IT'S NOW YOU OWN 5% OF THE SHARES OUTSTANDING OF APPLE. IT'S THE BIGGEST HOLDING FOR BERKSHIRE HATHAWAY AT $56 BILLION. HAVE YOU CONTINUED TO BUY EVEN SINCE THAT FILING?

BUFFETT: WE BOUGHT JUST A LITTLE, ABOUT 6 MILLION OF THE SHARES ARE ATTRIBUTABLE TO ANOTHER FELLOW IN THE OFFICE THAT'S OWNED IT FOR A CONSIDERABLE PERIOD OF TIME. THE REST ARE MY PORTFOLIO, BUT I BOUGHT JUST A LITTLE BIT -- I LIKE TO BUY THEM CHEAPER. IT'S VERY DIFFICULT. WE STARTED BUYING OR I STARTED BUYING WHEN THE STOCK WAS MAYBE 100, I WAS BUYING IT KIND OF AS FAST AS I COULD, AND I ENDED UP BUYING SOME AS HIGH, A WHOLE LOT HIGHER, I DON'T WANT TO NAME THE EXACT PRICE BUT A WHOLE LOT HIGHER. I'D RATHER HAVE IT GO DOWN FOR ONE THING, IF IT GOES DOWN APPLE IS GOING TO BUY A LOT OF STOCK BACK, ALREADY BUYING STOCK BACK. IF IT GOES DOWN 10% IT MEANS THEY GET TO BUY 10% MORE SHARES AND MY INTEREST WILL GO UP 10% MORE FOR SPENDING THAT MONEY I AM BENEFITED BY GOING DOWN IF I WERE TO TALK MY BOOK, I WOULD TALK IT DOWN.

QUICK: I SPOKE WITH AN ANALYST TODAY, GENE MUNSTER AND HE POINTED OUT THE INTERESTING THING ABOUT APPLE FOR A LONG TIME IT WAS A VOLATILE STOCK, IT TRADED IN THE BOOM AND BUST CYCLE. EVERY TIME THEY HAD A NEW PHONE THAT CAME OUT IT WOULD PUSH THE STOCK HIGHER AND IF IT DIDN'T HAVE A NEW RELEASE IT WOULD DROP HE SAID IT IS STILL 65% OF THE BUSINESS, BUT A LOT OF PEOPLE LOOK AT IT DIFFERENTLY AND WONDERING HOW YOU LOOK AT IT. IS THIS A BOOM AND BUST CYCLE OR SOMETHING DIFFERENT?

BUFFETT: NOT IN THE LEAST. I LIKE TO SEE THE NEW RELEASE DO WELL OR YOU KNOW, BUT I DO NOT FOCUS ON THE SALES IN THE NEXT QUARTER OR THE NEXT YEAR I FOCUS ON, THEY WON'T TELL YOU EXACTLY HOW MANY BUT HUNDREDS AND HUNDREDS AND MILLIONS OF PEOPLE WHO PRACTICALLY LIVE THEIR LIVES BY IT, AND IF YOU LOOK AT THAT LITTLE PIECE OF WHATEVER IT IS, THAT IS SOME OF THE MOST VALUABLE REAL ESTATE IN THE WORLD. FIFTH AVENUE WILL NEVER COME CLOSE TO THAT. YOU'VE GOT HUNDREDS AND HUNDREDS OF MILLIONS OF PEOPLE WITH LOADS OF BUYING POWER, AND ABLE TO DO BUSINESS OR LEARN INFORMATION OR WHATEVER IT MAY BE AND IT'S PART OF THEIR HABIT OF LIVING, THEY SPEND HOURS A DAY AND IT DOES ALL KINDS OF THINGS FOR THEM SO THAT REAL ESTATE IS WORTH A FORTUNE, AND IT'S NICE TO HAVE IT ADDED TO, AS THEY SELL NEW PHONES AND OF COURSE A LOT OF THEM ARE REPLACEMENT PHONES BUT THEY'RE ADDING TO HUNDREDS AND HUNDREDS OF MILLIONS OF CONSUMERS THAT ARE NEVER GOING TO GET TO FIFTH AVENUE, THEY'RE NEVER -- AND YOU ARE AN INDISPENSABLE PART OF THEIR LIVES. IT'S AN EXTRAORDINARY PRODUCT.

QUICK: YOU DON'T LOOK AT IT LIKE A TECH ANALYST WOULD OR A TECH COMPANY, FOR THAT MATTER?

BUFFETT: I LOOK AT iPAD. YOU MEAN –

QUICK: IN TERMS OF HOW YOU VALUE THE STOCK AND ITS PRODUCTS.

BUFFETT: THEY'VE GOT TO KEEP HAVING THE PRODUCT THAT THIS HUGE CLIENTELE REGARDS AS INDISPENSABLE. IT'S GOT TO BE THE BEST THING THAT THEY CAN TELL US WHEN AIRPLANES WILL ARRIVE OR WHATEVER IT MAY BE, WHAT THE WEATHER WILL BE WHAT STOCKS ARE DOING, MILLIONS, PLAY GAMES, WHATEVER IT MAY BE, AND THAT'S IMPORTANT THAT THEIR REPLACEMENT PRODUCTS ARE LOOKED AT AS SUPER DESIRABLE, BUT ONE OF THE THINGS THAT I COME TO UNDERSTAND IS WE HAVE A VERY LARGE RETAILING OPERATION AT FURNITURE MART AND IF PEOPLE WENT IN TO BUY THE LATEST iPHONE OR WHATEVER IT MIGHT BE, IF FOR SOME REASON WE DIDN'T HAVE IT, YOU COULDN'T SELL THEM ANYTHING ELSE. THEY EITHER WENT NEXT DOOR WHICH WE DIDN'T WANT THEM TO DO OR THEY CAME BACK I MEAN, IT WASN'T AN ALTERNATIVE, AND WHEN YOU HAVE A PRODUCT THAT IS THAT PERSONAL, THAT VALUABLE, AND THEY TALKED ABOUT I'VE OWNED THOUSANDS, I HAVE A PLANE THAT COST ME A LOT, A MILLION DOLLARS A YEAR OR SOMETHING OF THE SORT. IF I USED THE iPHONE, I USE AN iPAD A LOT, IF I USE THE iPHONE LIKE ALL MY FRIENDS DO, I WOULD RATHER GIVE UP THE PLANE, WHICH IS A MILLION OR MILLION AND A HALF A YEAR FOR SOMETHING THAT COSTS A THOUSAND BUCKS THE iPHONE IS ENORMOUSLY UNDERPRICED. NOW IT'S GOT COMPETITION SO YOU CAN'T PUSH THE PRICE, BUT IN TERMS OF ITS UTILITY TO PEOPLE, AND WHAT THEY GET FOR A THOUSAND DOLLARS SOMEPLACE ELSE, YOU KNOW, YOU CAN HAVE A DINNER PARTY THAT WOULD COST THAT, AND HERE THIS IS, AND WHAT IT DOES FOR YOU, IT'S INCREDIBLE.

QUICK: YOU MENTIONED AIRPLANES, AND AIRLINES, AND I JUST WONDER, ARE THE AIRLINE STOCKS THAT YOU ALSO STILL FIND ATTRACTIVE? HAVE YOU BEEN ADDING TO YOUR POSITIONS THERE?

BUFFETT: WE CAN'T ADD, TECHNICALLY WE COULD BUT I DON'T WANT TO GO OVER 10% EXCEPT IN RARE CIRCUMSTANCES OF SECURITY, SO WE OWN NINE AND A FRACTION PERCENT OF THE FOUR LARGEST, AND I ACTUALLY HAVE TO TRIM THEM JUST A LITTLE IF THEY'RE REPURCHASING SHARES TO STAY UNDER 10% IF I COULD BUY 20%, I WOULD HAVE BEEN HAPPY TO BUY 20%, BUT, SO WE'VE GOT ABOUT WHAT WE CAN HANDLE.

QUICK: WARREN, LET ME ASK YOU ABOUT THE NEWS OF THE DAY. CAMPBELL'S CAME OUT WITH ITS OWN BUSINESS INITIATIVES, A STRATEGIC INITIATIVE TODAY.

BUFFETT: I SAW THAT.

QUICK: THEY'RE SELLING OFF A COUPLE OF UNITS, THE FRESH FOODS AND THE INTERNATIONAL. DOES THAT MAKE IT MORE ATTRACTIVE OR LESS ATTRACTIVE AS A BUYING OPPORTUNITY FOR SOMETHING THAT COULD GET WRAPPED IN POTENTIALLY TO KRAFT HEINZ?

BUFFETT: I DON'T KNOW THAT IT CHANGES THE PICTURE A LOT. PRESUMABLY THEY'RE GOING TO GET FAIR VALUE FOR THAT. SO IF THEY WOULD BE CALCULATED BY ANY ACQUIRERS BEING WORTH "X." NOW IT MAY OR MAY NOT BE TAX EFFICIENT. I DON'T KNOW THE TAX BASIS ON THOSE ASSETS. BUT IF THEY HAVE A LOW TAX BASIS IT THEN IT ACTUALLY DECREASES VALUE A LITTLE BIT FOR ANOTHER BUYER, BECAUSE YOU'LL GIVE SOME OF IT TO THE GOVERNMENT IN THE PROCESS, BUT I DON'T THINK -- I DON'T THINK IN TERMS OF ANY OTHER COMPANY LOOKING AT IT FOR ACQUISITION, THEY'RE PROBABLY SELLING THE ASSETS THAT THOSE COMPANIES WOULD HAVE BEEN PARTICULARLY LOOKING FOR. BUT I DON'T KNOW CAMPBELL THAT WELL.

QUICK: YOU'RE SAYING YOU DON'T KNOW IT THAT WELL MAKES ME THINK YOU HAVEN'T BEEN LOOKING IT OVER CONSIDERING IT AS A PURCHASE BECAUSE DAN LOEB WOULD LIKE TO SEE SOMEBODY BUY IT. WOULD BERKSHIRE BE INTERESTED, WOULD KRAFT HEINZ BE INTERESTED?

BUFFETT: WELL, BERKSHIRE CERTAINLY WOULDN'T BE. BUT -- BUT THAT'S PARTLY BECAUSE WE OWN KRAFT HEINZ, TOO. WE WOULDN'T DO ANYTHING. BUT – I THINK IT'S VERY HARD TO OFFER SIGNIFICANT PREMIUM FOR A PACKAGE GOODS COMPANY AND HAVE IT MAKE FINANCIAL SENSE. THE PACKAGED GOODS BUSINESS MAKES HIGH RETURNS ON TANGIBLE ASSETS THAT IT HAS, BUT IT IS A TOUGHER BUSINESS THAN IT WAS TEN YEARS AGO AND THE STOCKS ARE HIGHER THAN THEY WERE TEN YEARS AGO. SO THEY -- WE BACK IN THE '80s WERE THE LARGEST SHAREHOLDER OF GENERAL FOODS. I ALWAYS LIKED BRANDS. AND THEY'RE VERY GOOD BRANDS. BUT IN TERMS OF THE BATTLE OF THE RETAILERS VERSUS THE BRANDS AND THE -- AND THE WILLINGNESS OF PEOPLE TO CHANGE THEIR HABITS PROBABLY HAS A HIGHER PROPENSITY FOR THAT THAN 20 OR 30 YEARS AGO. SO BRANDED GOODS, BRANDED PACKAGED GOODS ARE A VERY, VERY, VERY GOOD BUSINESS IN TERMS OF RETURN ON TANGIBLE ASSETS. BUT THEY'RE NOT A SENSATIONAL BUSINESS IN TERMS OF WHERE YOU CAN BE FIVE OR TEN YEARS FROM NOW.

QUICK: LET ME ASK YOU ABOUT SOME NEWS THAT BERKSHIRE MADE A LITTLE OVER A MONTH AGO. I'M NOT SURE IT RECEIVED QUITE THE ATTENTION THAT IT SHOULD HAVE. YOU SAID THAT YOU WERE CHANGING YOUR VIEWS ON BUYING BACK BERKSHIRE SHARES.

BUFFETT: RIGHT.

QUICK: FOR A LONG TIME, YOU'VE SAID THAT IF IT GOT ABOVE 120% OF BOOK VALUE, YOU WOULD BUY IT BACK. THAT – AND THAT CREATED A FLOOR FOR THE STOCK. NOW YOU SAY THAT YOU'RE THROWING THAT OUT THE WINDOW. IF YOU AND CHARLIE LOOK AT IT -- YOU AND CHARLIE MUNGER – AGREE BACK YOU'LL BUY BACK STOCK. HAVE YOU BOUGHT BACK ANY STOCK SINCE THEN?

BUFFETT: WE'VE BOUGHT BACK A LITTLE. YEAH. AND WE TRY IT TO INTRINSIC BUSINESS VALUE, WHICH WE SHOULD HAVE DONE ALL ALONG BUT FOR A WHILE BOOK VALUE WAS A GOOD PROXY. IT DIDN'T FULLY DESCRIBE INTRINSIC VALUE, BUT IT TRACKED IT, AND IT WAS A REASONABLE PROXY, AND IT'S GOTTEN TO HAVE LESS AND LESS IMPORTANCE AS WE MOVE TO OPERATING BUSINESSES FROM INVESTMENTS. SO WHAT REALLY COUNTS IS WHAT ARE THE BUSINESSES WORTH, ALONG WITH THE SECURITIES WE OWN. AND IF IT'S AT A DISCOUNT TO THAT FIGURE, CHARLIE AND I WILL BUY. AND WE BOUGHT SOME.

QUICK: HOW OFTEN DO YOU AND CHARLIE TALK ABOUT IT?

BUFFETT: WELL, WE DON'T HAVE TO TALK VERY OFTEN. IF IT'S SO CLOSE, WE HAVE TO TALK, EVERY TIME IT MOVES 1%, IT ISN'T WORTH BUYING. I MEAN, IT'S – SO, THERE SHOULD BE A MARGIN OF ERROR IN OUR CALCULATION. SO WE DON'T – WE NEVER TALK DAY-TO-DAY OR WEEK TO WEEK ON IT. BUT I KNOW THAT WHAT'S IN HIS, WHAT'S IN MINE, -- WE'RE TOTALLY IN SYNC. AND WE NEED A BIG ENOUGH DISCOUNT, SO WE'RE BUYING IT, AT WHAT WE KNOW IS A PRICE WHERE THE CONTINUING SHAREHOLDERS ARE GOING TO BE BETTER OFF, BECAUSE WE BOUGHT IT. WE'RE RUNNING BUSINESS FOR THE PEOPLE WHO ARE GOING TO STAY, NOT THE ONES WHO ARE GOING TO LEAVE.

QUICK: ABOUT A WEEK AND A HALF AGO OR JUST ABOUT A WEEK AGO, I SPOKE WITH BRIAN CORNELL, HE'S THE CEO AT TARGET. AND HE SAID THAT IN HIS CAREER HE'S NEVER SEEN A BETTER ENVIRONMENT FOR THE CONSUMER, THAT THINGS SEEM TO BE FIRING ON ALL CYLINDERS. I JUST WONDER WHAT YOU SEE WHEN IT COMES TO THE ECONOMY, WHAT DO YOU SEE WHEN IT COMES TO THE CONSUMER?

BUFFETT: WELL, THE ECONOMY, REALLY SINCE THE FALL OF 2009, HAS PROGRESSIVELY GOTTEN BETTER BUT IT STARTED FROM A VERY LOW BASE. IT STARTED FROM PANIC. AND WE'VE NOW HAD NINE, WELL VERY SOON, WE'VE GOT NINE FULL YEARS OF IMPROVEMENT IN BUSINESS. I MEAN, QUARTER BY QUARTER. NOW SOMETIMES IT LOOKED LIKE 1% OR 1.25%, SOMETIMES IT WAS 2.5. NOW IT LOOKS EVEN BETTER THAN THAT. BUT BUSINESS IS GOOD. ACROSS THE BOARD, BUSINESS IS -- BUSINESS IS GOOD. IT WAS GOOD TWO YEARS AGO. IT KEEPS GETTING BETTER. BUT THE AMERICAN PUBLIC – AMERICAN PUBLIC HOUSEHOLD WEALTH IS OVER $100 TRILLION. AND 250 YEARS AGO, YOU KNOW – THIS ISLAND – NOTHING WAS WORTH -- THERE WASN'T ANYTHING HERE. I MEAN, 24 BUCKS FOR PETER MINUIT.

QUICK: BUT THE ECONOMY IS FIRING ON ALL CYLINDERS. ONE ISSUE THAT PEOPLE HAVE WORRIED ABOUT IS WHAT IS HAPPENING WITH TRADE AND TARIFFS. HAVE YOU SEEN ANY IMPACT ON BERKSHIRE'S BUSINESSES OR HIGHER COSTS ASSOCIATED WITH ANY TARIFFS THAT HAVE GONE IN PLACE?

BUFFETT: YEAH, YEAH. THERE ARE A FEW. DEFINITELY. AND WE BUY STEEL, YOU KNOW, FOR EXAMPLE, AT -- WE BUY IT AT A LOT OF PLACES. AND WE ARE SEEING SOME EFFECTS FROM THAT AND WE'RE SEEING SOME EFFECTS FROM INFLATION.

QUICK: I'M SORRY, FROM INFLATION --

BUFFETT: RIGHT. WE'VE SEEN MORE IN THE WAY OF COST INCREASES IN THE LAST YEAR, IF YOU GO ACROSS ALL OF OUR BUSINESSES, BUT PARTICULARLY BUILDING MATERIALS OR -- WE SELL PAINT, THE CAN IT COMES IN. THAT IS A LOT MORE EXPENSIVE THAN A YEAR AGO.

QUICK: HOW MUCH INFLATION IS TIED TO THE TARIFFS AND HOW MUCH IS FROM AN IMPROVING ECONOMY AND INFLATION YOU WOULD EXPECT TO CREEP IN?

BUFFETT: I CAN'T TELL YOU EXACTLY YET, AND SOME OF THEM -- WELL, NEWSPRINT. YOU KNOW, IT POPS UP IN DIFFERENT PLACES. AND I HAVEN'T REALLY DONE THAT, BUT I WAS SEEING IT IN RAW MATERIALS WELL BEFORE THE TARIFFS SITUATION CAME UP. BUT THE TARIFF SITUATION WILL AGGRAVATE IT SIGNIFICANTLY.

QUICK: LET'S JUST TALK ABOUT THAT. IF YOU ARE SEEING PRICE INCREASES COMING THROUGH THAT MAY LEAD YOU TO THE CONCLUSION YOU THINK THE FED SHOULD RAISE RATES OR CONTINUE TO RAISE RATES AS THEY'VE BEEN DOING, THE PRESIDENT, DONALD TRUMP, TWEETED OUT AND TALKED IN AN INTERVIEW ABOUT HOW HE DOESN'T LIKE TO SEE THE FED RAISING RATES. WHAT DO YOU THINK ABOUT THAT, JUST AS SOMEBODY WHO WATCHES IT?

BUFFETT: WELL I THINK JAY POWELL IS A TERRIFIC CHAIRMAN FED. I'VE KNOWN,– NOT KNOW HIM WELL, BUT I'VE KNOWN HIM, I KNOW PEOPLE HE WORKED WITH, AND I'VE LISTENED TO WHAT HE'S HAD TO SAY, SO I LOVE THE FACT JAY POWELL IS CHAIRMAN OF THE FED. AND HE WILL DO THE RIGHT THING, HE GETS A LOT MORE FIGURES IN THAN I DO. I MAY GET THEM A LITTLE FASTER ON SOME THINGS THAN THE FED, THEN THEY WORK THEIR WAY THROUGH. BUT HE WILL SEE IT, AND HE'LL DO WHAT, IN HIS JUDGMENT, IS BEST FOR THE AMERICAN ECONOMY OVER TIME. THERE ISN'T ANY QUESTION ABOUT THAT. AND MAYBE HE'LL MAKE MISTAKES. I KNOW I'LL MAKE MISTAKES. BUT HE KNOWS WHAT HIS JOB IS AND HE'LL DO IT.

QUICK: THE PRESIDENT ALSO TWEETED ABOUT ANOTHER INITIATIVE, AND I JUST WONDERED WHAT YOU THOUGHT ABOUT IT. HE SAID THAT AFTER SPEAKING WITH INDRA NOOYI, WE LATER FOUND OUT THAT SHE WAS THE ONE WHO TALKED WITH HIM, THAT HE WOULD LIKE TO DO SOMETHING THAT HELPS AMERICAN BUSINESS. THAT'S TO SAY STOP REPORTING EVERY QUARTER, MAYBE DO IT ON A SIX-MONTH BASIS. WHAT DO YOU THINK OF THAT IDEA? BECAUSE YOU FOCUSED ON LONG-TERMISM.

BUFFETT: JAMIE DIMON AND I CAME OUT A WHILE BACK, BUT I'VE ALWAYS FOCUSED ON THE IDEA, A) I LIKE TO READ QUARTERLY REPORTS AS AN INVESTOR AND WE'VE GOT A COUPLE HUNDRED BILLION DOLLARS WORTH OF COMMON STOCKS. SO I LIKE TO GET THOSE QUARTERLY REPORTS. I DO NOT LIKE GUIDANCE, AND I THINK THAT GUIDANCE LEADS TO LOTS OF BAD THINGS. AND I'VE SEEN IT LEAD TO LOTS OF BAD THINGS. I DON'T THINK QUARTERLY REPORTING ITSELF -- IT'S WHEN YOU GET INTO PROMISING PEOPLE WHAT YOU'RE GOING TO DO EVERY QUARTER. BECAUSE I CAN'T PROMISE WHAT'S GOING TO HAPPEN -- YOU KNOW, WE'RE IN THE HURRICANE SEASON NOW AND YOU COULD CHANGE OUR EARNINGS DRAMATICALLY WITH A STORM OR SOMETHING OF THOSE SORTS. SO I THINK IT'S A VERY BAD PRACTICE TO BE IN IN THE GAME OF EARNINGS GUIDANCE. AND IT IS A GAME. I MEAN YOU KNOW, PEOPLE PLAY IT AS A GAME, AND THEN PEOPLE ADJUST TO NUMBERS AND ALL THAT. BUT I LIKE TO GET THE FIGURES QUARTERLY, AND I HOPE THAT STAYS.

QUICK: I DON'T KNOW IF YOU FOLLOW TWITTER VERY CLOSELY. MY EXPECTATION IS THAT YOU DON'T.

BUFFETT: YOU'RE RIGHT ABOUT THAT.

QUICK: BUT THERE WAS A FAKE TWITTER ACCOUNT, A FAKE WARREN BUFFETT TWITTER ACCOUNT THAT WENT FROM 20,000 FOLLOWERS TO 200,000 FOLLOWERS IN 24 HOURS BY TWEETING OUT ALL KINDS OF PITHY SORT OF SOUND ADVICE, THINGS THAT FOLKSY SAYINGS THAT SOUNDED LIKE IT COULD HAVE COME FROM YOU. WHY DON'T YOU TWEET MORE OFTEN?

BUFFETT: WELL I JUST DON'T SEE A REASON TO. I PUT OUT AN ANNUAL REPORT, AND I DO NOT HAVE A DAILY VIEW ON ALL KINDS OF THINGS. AND, AND MAYBE I'VE GOT A GUY IN THIS COPYCAT OR IMITATOR, MAYBE HE'S PUTTING OUT BETTER STUFF THAN I WOULD. SO IF HE PUTS OUT GOOD ADVICE, I'LL TAKE CREDIT FOR IT.

QUICK: WE HAVE SEEN SOME CEOs WHO LIKE TO TWEET VERY FREQUENTLY, INCLUDING ELON MUSK.

BUFFETT: YES.

QUICK: HE'S CERTAINLY SOMEBODY WHO TWEETED A LOT. WHAT DO YOU THINK ABOUT PEOPLE WHO TWEET A LOT?

BUFFETT: I DON'T THINK IT'S HELPED HIM A LOT. NO, I THINK IT'S -- WELL, IT'D BE PARTICULARLY DANGEROUS TO START COMMENTING ON BERKSHIRE DAILY, WHICH I NEVER WOULD DO. I WON'T DO IT WITH YOU. BUT I THINK THERE'S OTHER THINGS IN LIFE I WANT TO DO THAN TWEET. I MEAN, I'M NOT THAT DESPERATE FOR SOMEBODY TO HEAR MY OPINION ON THIS.

QUICK: WARREN, IT'S YOUR BIRTHDAY TODAY, YOUR 88th BIRTHDAY. AND WE WISH YOU A HAPPY 88thBIRTHDAY.

BUFFETT: THANK YOU.

QUICK: IN FACT, WE HAVE SOMETHING THAT WE'VE ORDERED UP, THE CHEF IS HERE AT SMITH AND WOLLENSKY PUT TOGETHER JUST TO CELEBRATE YOUR 88th BIRTHDAY. THIS YEAR THEY WENT OUT OF YOUR WAY TO FOCUS ON THE COKE HOLDINGS, IT'S YOUR FIFTH LARGEST HOLDINGS.

BUFFETT: WOW. THAT IS TERRIFIC.

QUICK: SO THERE'S YOUR HAPPY BIRTHDAY CAKE. AND I JUST WANTED TO TALK TO YOU ABOUT -- AT 88, PROBABLY NOT A LOT OF NEW TRICKS THAT YOU CAN GET TAUGHT. BUT I KNOW EVEN THOUGH YOU DON'T HAVE A SMARTPHONE YOU DO HAVE AN iPAD.

BUFFETT: I HAVE AN iPAD. I USE IT A LOT.

QUICK: WHAT DO YOU DO WITH IT?

BUFFETT: WELL I KEEP IT AROUND ON MY DESK DURING THE DAY, AND IF I WANT TO CHECK ANYTHING IN THE FINANCIAL MARKETS, YOU KNOW THAT'S AN EASY– VERY EASY WAY TO DO IT. BUT I LOOK UP THINGS. IT'S WHAT I DO WITH A COMPUTER AT HOME, AND COMPUTERS ARE ENORMOUSLY USEFUL TO ME AND THE iPAD IS -- IS THE ONE I HAVE IN THE OFFICE IN EFFECT.

QUICK: DO YOU EVER LISTEN TO PODCASTS? DO YOU EVER FOLLOW ANYBODY ELSE? WHAT OTHER THINGS DO YOU WITH THIS?

BUFFETT: I LISTEN TO A PODCAST FROM MY FRIENDS AT TOM MURPHY. PODCASTS ARE NORMALLY, THEY TAKE A WHILE. I CAN READ FASTER THAN I CAN LISTEN TO ONE, BUT I RECOMMEND THAT. IT WAS DONE WITH DAVID NOVAK. IT'S A 28-MINUTE PODCAST. ANY TIME I GET TO LISTEN TO TOM MURPHY I THINK IT'S TERRIFIC BUT GENERALLY I DON'T BECAUSE OF THE TIME ELEMENT.

QUICK: WHAT DID YOU LEARN FROM TOM MURPHY IN THAT PODCAST?

BUFFETT: WELL, I'VE LEARNED -- I'VE BEEN LEARNING FROM HIM EVER SINCE I MET HIM IN 1968 OR '69. I MEAN, THE VERY FIRST TIME I MET HIM -- TOM MURPHY LIKE CHARLIE MUNGER HAS MADE ME A BETTER PERSON THAN I WOULD OTHERWISE BE. I MEAN, THAT'S THE ULTIMATE GIFT YOU CAN GIVE TO SOMEONE. AND TOM MURPHY HAS GIVEN THAT TO ME, AND CHARLIE MUNGER HAS GIVEN THAT TO ME AND MY DAD EARLIER AND MY WIVES AND SO ON. BUT -- BUT HE'S A HUMAN BEING THAT IF YOU STUDY HIM, I'M JUST TALKING ABOUT BUSINESS, BUT JUST AS A HUMAN BEING, AND YOU WANT TO HAVE THE RIGHT HEROES, AND I'VE HAD THE RIGHT HEROES. AND TOM MURPHY IS ONE OF THEM.

QUICK: AND TOM MURPHY IS FROM CAPITAL CITIES/ABC. WARREN, HAPPY BIRTHDAY.

BUFFETT: THANK YOU.

QUICK: THANK YOU FOR SPENDING TIME WITH US TODAY. AND GOOD LUCK WITH THE LUNCH –

BUFFETT: THANK YOU. AND I MAY NEED A SECOND HELPING, ACTUALLY. THAT'S A LITTLE SKIMPY – A LITTLE SKIMPY ON THE COKE.

For more information contact:

Jennifer Dauble
CNBC
t: 201.735.4721
m: 201.615.2787
e: jennifer.dauble@nbcuni.com

Emma Martin
CNBC
t: 201.735.4713
m: 551.275.6221
e: emma.martin@nbcuni.com