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SUZANNE PRATT: Billionaire investor Warren Buffett says the economy is beginning to show real signs of strength. And he sees a pick-up in spending at his consumer-related businesses. Buffett talked about the economic rebound this weekend at Berkshire Hathaway's annual meeting. Susie Gharib caught up with the Oracle of Omaha at the shareholder extravaganza.
WARREN BUFFETT, CHMN. & CEO, BERKSHIRE HATHAWAY: This is our version of "American Idol."
GHARIB: Warren Buffett has been hosting this shindig for decades. But this year was different. There were thousands of newcomers. Some came because of their ties to Burlington Northern, the big railroad Buffett bought a few months ago. Others got a ticket in because Berkshire stock was cheap enough to buy, thanks to an unprecedented stock split. But for whatever reason they came, they were looking for the same thing: sage investment advice from the Oracle of Omaha.
CHARLES HARRIMAN, SHAREHOLDER: For the pilgrimage and for the knowledge of Warren Buffett.
LEITH THOMPSON, SHAREHOLDER: I'm kind of curious to know what he's going to say about the financial markets with the banking industry if they're going to do regulation.
ADRIANNA JOHNSON, SHAREHOLDER: I'm here because Warren Buffett exemplifies sort of the best of business values.
GHARIB: Forty thousand people attended -- a record and the mood was hopeful, partly because Berkshire "Class A" stock is up almost 60 percent from its lows last March when it hit $75,000. Also, Buffett told shareholders he's seeing an uptick in the economy.
BUFFETT: Business is picking up. When they talk about creating jobs, what creates jobs is demand. I mean, somebody wants to come in and buy carpets, we hire carpet workers and that's starting to happen now. And it's noticeable now.
GHARIB: Mr. Buffett, how are your Berkshire businesses doing? So many of them are connected to housing and the consumer.
BUFFETT: Yeah, our businesses are generally doing pretty well, but still, the ones that are housing related lag behind, there's no question about that.
GHARIB: Are you ready to start hiring again?
BUFFETT: Oh we are hiring. I mean we're hiring people up at Burlington Northern. We're hiring people at Marmon (ph). We're hiring people at Iscar, so we are hiring people.
GHARIB: Buffett is so confident that he's looking to do more acquisitions. He has plenty of shopping money, $20 billion in cash.
BUFFETT: I've got a gleam in my eye, always do, Susie. Yeah, no I sure -- I love buying businesses and we'll just keep adding over time.
GHARIB: The highlight of what's called Woodstock for capitalists is the Q&A session for shareholders. For five hours, Buffett downed his favorite cherry Cokes and fielded questions on everything from the Greek debt crisis -- he expects high drama, but not disaster -- to inflation. He said he bet his life on higher inflation, a lot higher. The one topic Buffett was eager to talk about: his $5 billion investment in Goldman Sachs. Despite a government investigation into a Goldman mortgage deal called Abacus, Buffett still supports the firm's CEO.
BUFFETT: I have total confidence in Lloyd Blankfein, both of us do, in his integrity and ability. I mean, he is a great manager and they are losing the public relations war at the present time. I mean, they got out of the gate late essentially when that announcement was made and it's very tough to catch up once you've missed the first news cycle. But I'll explain in the meeting today exactly what that Abacus transaction was all about.
GHARIB: But tell me, given the government's fraud charges against Goldman, how do you feel about being associated with the investment firm?
BUFFETT: I have no problem at all. I was associated with Solomon when they were charged and we got it all worked out.
GHARIB: Are you confident enough in the company that for people who don't own the stock it's a buy at $145?
BUFFETT: I don't give buy recommendations or sell recommendations, but I am not bothered by our investment -- I'll put it that way -- at all.
GHARIB: Most people were satisfied by what they heard, including Tom Gayner, a big Berkshire shareholder.
THOMAS GAYNER, CHIEF INVESTMENT OFFICER, MARKEL CORP: In terms of Goldman and businesses practices and what goes on on Wall Street, I think he did a very good job talking about how these are the sorts of things that have gone on for a long time on Wall Street.
GHARIB: Money manager Tom Russo was also reassured.
THOMAS RUSS, PARTNER, GARDNER, RUSSO & INVESTMENTS: Berkshire's chairman is in a position of having unusually good access to information and his description about the transaction that took place was very reassuring.
GHARIB: But portfolio manager Justin Fuller was on the fence.
JUSTIN FULLER, PORTFOLIO MANAGER, MIDWAY CAPITAL & RESEARCH & MNGT.: I understand why he's standing by them, but I still think there's a lot of probing and questions still to be asked and be examined as the government kind of works through their process.
GHARIB: And what about those newbies?
JOHN LARKIN, SHAREHOLDER: If people listened to people like him and fewer people in Washington, I think we'd be way ahead.
JANET DOMEIER, SHAREHOLDER: They aren't always out looking for the fast big bucks. I guess do what's right and do what's sensible.
GHARIB: And one liked what Buffett said about his investment in Goldman Sachs.
CHRIS PHILLIPS, SHAREHOLDER: I think he feels very, very confident in what he purchased. He kind of used the analogy that he makes $15 every second, so he says he's sleeping and it's tick, tick, tick and over the weekend it's tick, tick, tick. And as a shareholder I like that.
GHARIB: The one worry on everyone's mind here, succession. Buffett turn 80 in August. But for now, he says he's not ready to retire and he shows no signs of slowing down. The day after the Berkshire meeting, he got a lesson in ping pong strategy from a teenage champion. He held his own. Susie Gharib, NIGHTLY BUSINESS REPORT, Omaha.
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