Nov. 14, 2011 at 8:38 AM ET
By msnbc.com news services
It’s not clear whether Europe has the ability to do what it takes to stop the debt crisis in the region, Warren Buffett, chief executive of Berkshire Hathaway, told CNBC Monday.
In a wide-ranging interview that touched on the euro zone’s sovereign debt crisis, the U.S. housing sector and the legendary investor’s new stock investments, Buffett also revealed that he has accumulated a 5.5 percent stake in IBM -- the billionaire investor’s biggest bet in the technology field he has historically shunned.
On the subject of Europe, Buffett said he has no interest at the moment in investing in the region's banks, and that there is what amounts to a partial run on Europe. Buffett is often mentioned as a potential savior for the sector.
Buffett, who put $5 billion into Bank of America earlier this year, said he expects Europe’s economy to have improved 10 years from now, but getting there would be difficult. His name comes up whenever there is talk of a large European bank needing to raise capital, particularly in the current environment of write downs on sovereign debt.
Buffett also told CNBC that he would need to understand those European banks better before investing in them, and that he has not yet seen an investment opportunity in which he wants to take part. Here are some of the highlights from CNBC’s conversation with Buffett:
Buffett also reiterated his position that the U.S. economy will improve when the housing market turns around. That turn will come, he said, when the country starts creating more households than houses.
Housing construction is “in a depression, not a recession” because there is still an oversupply of homes, Buffett told CNBC. He said he doesn’t think the U.S. housing market needs more government stimulus. He said what’s needed is for more households to be created and that will happen over time.
Buffett said he bought about 64 million shares of IBM, which cost around $10.7 billion. Berkshire started buying the shares in March with a goal to build a $10 billion position, he said. But before he revealed the name Buffett at first gave CNBC a puzzle, linking his investment to the name “Harold”:
Buffett also said IBM did not know that he was building a stake, and that the company was finding out about his investment for the first time as he said it on CNBC. According to Thomson Reuters data, a 5.5 percent position would tie Buffett with State Street Global Advisors for the largest stake in the company.
Berkshire Hathaway will file a full quarterly update on its U.S. stock portfolio Monday afternoon. Besides investments, Berkshire owns roughly 80 subsidiaries including insurance, railroad and utility firms.
Reuters contributed to this report.