Tags: Buffett | Tesla | Berkshire | auto

Buffett: Tesla's Distribution Model Won't Hurt Berkshire

By    |   Wednesday, 01 April 2015 11:30 AM

Berkshire Hathaway Automotive, a network of 81 auto dealerships, doesn't feel any threat from the direct-to-consumer distribution model of Elon Musk's Tesla, the electronic car company, says Berkshire's legendary CEO Warren Buffett.

He noted in an interview with CNBC that Tesla's market is small. "I would doubt if it picks up much steam," Buffett said of Tesla's sales method. "What Tesla does with it, we'll find out. But I do not see the distribution system changing in any major way."

Buffett has big expansion plans for the automotive unit created by Berkshire's acquisition of the Van Tuyl Group earlier this year. "I'd be very surprised if five years from now we aren't a whole lot bigger," he said.

As for the Federal Reserve, Buffett approves of its slow, gradual process to raise interest rates.

"Things are working pretty well, and if I raised rates significantly with negative interest rates in Europe, I would be very worried about what that would do to the flow of funds," he said. "[It] would throw a big monkey wrench into things if we were to move rates up a lot."

The Fed has kept its federal funds rate target at a record low of zero to 0.25 percent since December 2008. Fed Chair Janet Yellen said Friday that the Fed will likely start gradually boosting rates this year. Many economists predict the first move will come in September.

Meanwhile, Steve Beaman, chairman the Society to Advance Financial Education, told Newsmax TV, that the central bank deserves a lot more credit than President Obama does for our economic recovery from the Great Recession of 2007-09

"The vast majority of the credit for our recovery has to go to the Federal Reserve, external of the government," he said on the network's "MidPoint."

"After the financial collapse of 2008 and '09, [former Fed Chairman] Ben Bernanke in a very controversial move did the opposite of what they did in 1929. He opened the floodgates for money. . . . That has been the core reason we've had economic growth."

The economy has expanded about 2.2 percent a year since the rebound began in June 2009.

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Berkshire Hathaway Automotive, a network of 81 auto dealerships, doesn't feel any threat from the direct-to-consumer distribution model of Elon Musk's Tesla, the electronic car company, says Berkshire's legendary CEO Warren Buffett.
Buffett, Tesla, Berkshire, auto
360
2015-30-01
Wednesday, 01 April 2015 11:30 AM
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