buffettt on buying a house 10/22/2012

Warren, do you —do you still think a single family home is one of 

the best investments around? And have you actually tried to figure out 

a way to invest in that? You'd like to buy 100,000 —you've said that 

you'd like to buy as many as you could, but they're impossible to 

manage and you can't really do it. Have you figured...

BUFFETT: Yeah.

JOE: Have you tried to figure out a way to do it?

BUFFETT: Yeah. And I've had a lot of suggestions from people after I

made that statement. But it's not really feasible, certainly, compared 

to other things we can do with money. They're —it's just too big a 

problem to deal with small units like that and management problems 

and human problems. So I think that anybody that knows where 

they're going to want to live, has a reasonably assured income. I think 

they're making a terrible mistake if they don't buy a single family 

home now and get a mortgage at these rates. And they should get a 

30-year mortgage. It's a —it's a —really a golden opportunity. It was a 

little bit better six months ago, but it's still wonderful now. You're not 

going to see a chance like this five years from now. I'll guarantee you 

that.

BECKY: Five years from now it's going to be a different picture, and 

that's interesting.

BUFFETT: Yeah. Rates will be higher and all kinds of things. I mean,

this is —this is the time to buy.

BECKY: And you think prices will rebound, too.

BUFFETT: If you know where you want —you've got to want to live 

there, I mean, and a home's a wonderful thing.

BECKY: Hm.

BUFFETT: But I wouldn't buy one if I was going to move in six months 

or something of the sort. And I wouldn't buy one if I was terribly nervous about my 

job.

BECKY: Ted Weschler and Todd Combs talked about what they've 

been doing as an investment cycle. 

How much of that is yours? How much of that is theirs?

BUFFETT: Very little of it's mine. I mean, if it's Wells Fargo or IBM or 

Coca-Cola, I mean, I've got four stocks that aggregate over 50 billion 

that I manage. And then I've got a bunch of other things, too. But the 

action is with Ted and Todd. And they're building up portfolios, and 

they will buy $500 million at a time of something. And they're probably 

more prone —one of the two is more prone to move around in 

securities than I would be. But there's a lot of styles that work. So I 

am enormously pleased.

Greenblatt on investing

"When we buy things, we like companies that generate large amounts of cash flow relative to the price we're paying.  On the short side, we would like to be short, high-priced, cash-eating companies."

"If you don't lose money, most of the alternatives are good.  Even if you don't know what the upside is - if you just know there's upside - you can create scenarios where you have an excellent risk/reward.  Positions with limited downside are the types of positions that I have loaded up on in the past.  Not the positions with the biggest payoff.  I could buy a lot knowing that I wouldn't lose much and that there were good possibilities that it was worth a lot more over time."