Warren Buffett Speaks on Stock Market

S&P 500 - 5 Year Chart - November 19th, 2013Earlier today, during an interview with "CBS This Morning", Warren Buffett was asked to comment on current stock valuations.

According to Buffett, chairman of Berkshire Hathaway Inc. and arguably the most successful investor of all time, stocks are currently in a "zone of reasonableness". These comments are in contrast to those of Carl Icahn, who recently declared that he was "very cautious" on equities and that the market "could easily have a big drop". In addition, Icahn also stated that "a lot of the earnings are a mirage", and that companies are benefitting from low interest rates.

While Buffett certainly isn't imploring people to buy at current levels, as he did in 2008, he does say that stocks are "definitely not way overpriced". On the other hand, he also says that stocks are "definitely not underpriced" either.


Berkshire Hathaway, which currently has a valuation of $286.18 billion, recently put some of its capital to work in Exxon Mobil.

Over the past couple of quarters, Berkshire Hathaway quietly amassed a 40 million share position in the oil giant. This stake, which represented the company's only new purchase of the quarter, is currently valued at around $3.7 billion.

Buffett has stated over the past year or so that attractive deals are getting harder and harder to find, which speaks to the steady upwards march that the markets (and stock valuations) have been on.

While Buffett may not sound overly bullish on the near-term outlook for stocks, he does say that stocks are "very likely to be higher" in 5-10 years.

Source: CBSNews.com - Warren Buffett Talks All-Time Record Highs on Wall Street, Stock Prices in the Future

Filed under: General Market News

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