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Buffett Plays ‘Wait and See’ With Democratic Nomination Getty Images

Buffett Plays ‘Wait and See’ With Democratic Nomination

"Normally, I vote for Democrats," Warren Buffett said.

(Bloomberg) -- Warren Buffett said he’s not yet picked a candidate in the U.S. presidential race.

“I think I’m going to wait and see who gets the nomination,” Buffett said Monday in an interview with CNBC. “Normally, I vote for Democrats. We will see what happens.”

Buffett, who runs Berkshire Hathaway Inc., endorsed Hillary Clinton for the 2016 election against now-President Donald Trump, and attended fundraisers for both Clinton and Barack Obama ahead of the 2008 primaries. The son of a Republican U.S. congressman, Buffett, 89, said he’s a capitalist, not a “card-carrying” Democrat.

Democratic candidates vying for the nomination include Vermont Senator Bernie Sanders, who’s gained momentum with victories in Nevada and the New Hampshire primary. While Buffett agrees with Sanders that the country needs to do more for people who are left behind, he doesn’t think that requires dismantling “the golden goose” of capitalism.

“I actually agree with him in terms of certain things he would like to accomplish,” Buffett said. “I don’t agree with him in many ways.”

Buffett said he would prefer former New York City Mayor Michael Bloomberg over Sanders, who embraces what he calls democratic socialism.

“I would certainly vote for him,” Buffett said of Bloomberg. “I don’t think another billionaire supporting him would be the best thing to announce.”

Bloomberg’s campaign has said he would sell his company, Bloomberg LP, if he’s elected president. Buffett said he wouldn’t be a buyer because some other bidder is likely to emerge that would pay more. (Bloomberg is the founder and majority owner of Bloomberg LP, the parent company of Bloomberg News.)

Buffett’s business partner, Charles Munger, said earlier this month that Michael Bloomberg could garner the votes of many moderates, increasing his chances in the election. Munger, a lifelong Republican, declined to name which candidate, if any, he was supporting. Buffett expressed support for Bloomberg in early 2019, ahead of the candidate’s official entry into the race.

U.S. equities dropped Monday as the coronavirus continued to spread beyond China. Buffett said the virus hasn’t affected his long-term outlook on stocks, since he often views investing through a multi-decade lens.

“It is scary stuff,” Buffett said. “I don’t think it should affect what you do in stocks. But in terms of the human race, it’s scary stuff.”

Buffett spoke after releasing his annual letter and fourth-quarter earnings on Saturday. He said in the letter that shareholders can expect to hear more from top lieutenants Ajit Jain and Greg Abel, seen as the top contenders to eventually replace him as CEO. The company’s earnings report showed Berkshire stepped up its share repurchases at the end of 2019, spending $2.2 billion for the biggest tally ever in a single quarter.

Berkshire’s Class A shares fell 2.5% to $335,027 at 11:09 a.m. in New York. They’re down 1.4% for the year.

Here are some other key takeaways from Buffett’s comments Monday:

On Geico

Last year, Berkshire announced that Todd Combs, one of Buffett’s key investing deputies, would take over as Geico’s chief executive officer. That change is temporary, Buffett said Monday.

“Todd is there and I hope very much that he’s not there very long,” Buffett said. “Our intention always is to promote from within. We would hope to pick out the right person at Geico.”

On Yield Hunt

Buffett criticized companies willing to take on more risk in the hunt for higher returns.

“Reaching for yield is really stupid, but it’s very human,” he said.

On Airlines

Buffett, whose company owns stakes in Delta Air Lines Inc. and Southwest Airlines Co., said it’s “very unlikely” Berkshire would buy an airline outright because of the heavily-regulated nature of the industry.

On Crypto

Buffett’s lunch with Chinese cryptocurrency entrepreneur Justin Sun doesn’t seem to have changed his mind on the asset.

“Cryptocurrencies basically have no value -- they don’t produce anything,” Buffett said.

On PG&E

The billionaire investor’s company owns a sprawling energy empire across the U.S. and even in the U.K. Still, he doesn’t seem to want to add PG&E Corp. to the mix, despite urging from California Governor Gavin Newsom.

PG&E filed for Chapter 11 bankruptcy protection more than a year ago after its equipment was blamed for causing some of the worst fires in California history, resulting in about $30 billion in liabilities.

“It’s too tough,” Buffett said, while praising Newsom. “I don’t know how to solve all that.”

On Wells Fargo

Berkshire sold some of its Wells Fargo & Co. stake in the fourth quarter, taking that investment down to $17 billion at the end of the year. Buffett declined to give his current views on the company and reiterated that the bank made a mistake in not responding to its issues more quickly.

“Some of it was sold down to avoid being over 10%,” Buffett said of the Wells Fargo stake, referring to U.S. regulations governing maximum bank ownership stakes. “We’ve sold more than that.”

On Kraft Heinz

Buffett said the company is “still a great business” even after struggles including a major writedown last year.

Berkshire continues to carry the investment at $13.8 billion on its balance sheet, even though its market value was $10.5 billion at the end of 2019.

To contact the reporter on this story:
Katherine Chiglinsky in New York at [email protected]

To contact the editors responsible for this story:
Michael J. Moore at [email protected]
Steve Dickson, Daniel Taub

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