Warren Buffett On Pilot Flying J Deal & Wells Fargo Scandal | October 3, 2017 | Summary and Q&A

Summary

In this video, Warren Buffet discusses various topics, including the recent shooting in Las Vegas, the market reaction to bad news, interest rates, the role of the Federal Reserve, taxes, and the current tax bill. He also talks about his confidence in Tim Sloan, CEO of Wells Fargo, and his views on the estate tax.

Questions & Answers

Q: What are Warren Buffet's thoughts on the recent shooting in Las Vegas?

Warren Buffet expresses his sympathy for the victims and praises the Las Vegas Metro Police for their quick response. He also acknowledges that there will always be a small percentage of people with dangerous intentions.

Q: Does Warren Buffet think current market valuations make sense?

According to Buffet, current market valuations make sense given the low interest rates. He explains that stocks are a better investment than bonds when interest rates are low.

Q: How does Warren Buffet view the impact of interest rates on the stock market?

Buffet sees interest rates as the most important factor in the stock market. He believes that over time, stocks will outperform bonds. However, he notes that interest rates have been lower for longer than expected, and the market is still waiting for them to rise.

Q: Does Warren Buffet think interest rates will continue to rise slowly over the next couple of years?

Buffet is unsure about the future direction of interest rates, but he believes that a move to a 5 percent rate would make stocks cheaper. However, he emphasizes that his investment strategy is focused on buying businesses he likes, rather than trying to guess the stock market or interest rate movements.

Q: Does Warren Buffet think the Federal Reserve's actions and interest rates are important for stock market investors?

Buffet believes that the Federal Reserve's actions and interest rates are important during times of panic and crisis, but are not as significant during normal times. He suggests that trying to predict the Fed's actions is not a productive investment strategy.

Q: Does Warren Buffet spend time thinking about who is running the Federal Reserve and its impact on stock prices?

Buffet does not spend time thinking about who is running the Federal Reserve, as he believes that the Fed is generally not that important for the stock market. However, he acknowledges that the Fed's actions can have a major impact during times of crisis.

Q: How does Warren Buffet view taxes and their impact on his investment decisions?

Buffet considers taxes when making investment decisions, especially when there are potential changes in tax rates. He explains that he may sell losses before the end of the year if there is a significant reduction in tax rates, as it can be beneficial to defer gains until the following year.

Q: Does Warren Buffet believe that current tax proposals will result in a tax cut or a tax reform?

Buffet believes that the current tax proposals are more about tax cuts than tax reform. He criticizes the elimination of the estate tax, arguing that it would allocate resources in a way that goes against what built America. He believes that dynastic wealth and inequality would increase as a result.

Q: What are Warren Buffet's thoughts on the corporate tax rate?

Buffet argues that the current corporate tax rate does not make companies uncompetitive globally since American businesses earn a high return on tangible equity. He also mentions that most companies do not pay the full tax rate due to various loopholes.

Q: What does Warren Buffet think a decrease in taxes would mean for the stock market?

According to Buffet, a decrease in taxes would increase corporate profits, which would likely result in higher stock prices. However, he affirms that the magnitude of the increase in earnings may not match the amount of the tax cut.

Takeaways

Warren Buffet believes that interest rates, taxes, and the actions of the Federal Reserve are important factors to consider when investing in the stock market. He emphasizes the importance of thinking long-term and buying good businesses. Buffet also expresses concerns about the concentration of wealth and the potential impact of tax cuts on inequality.