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Millions of Americans admire Berkshire Hathaway CEO Warren Buffett as one of the smartest, most effective, and most personable CEOs in the United States. But which CEOs does Buffett himself admire?
In a wide-ranging interview with CNBC that aired this morning, Buffett discussed everything from changes in the tax law to the fact that he's never visited a Taco Bell. Along the way, he named some CEOs he believes are doing a particularly good job. And you know he means it, because he's put Berkshire Hathaway's money where his mouth is, investing in (or with) the companies these CEOs run.
1. Amazon CEO Jeff Bezos
Buffett may well be Bezos' number-one fan. "I'm amazed at the managerial talent of Jeff Bezos," he told Squawk Box co-anchor Becky Quick. "I've been a constant fan, really, almost since he started. And the more I see him, the more impressed I've been with what he's accomplished."
Bezos saw the future, and how a large industry could be disrupted, Buffett said. "He got this amazing runway. I mean, the other players--here are all these 200 IQ people in that business. And they gave him year after year after year. It wasn't a secret, what he was doing. He was, in an important way, revolutionizing the industry, and the other people sat on their hands, basically."
So did Buffett. As one viewer question noted, at the 2016 Berkshire Hathaway annual meeting, Buffett expressed regret that he hadn't bought Amazon stock. At that time, in May 2017, the stock was valued at $935--today it's selling at more than $1,500, a pretty impressive increase in less than a year. Still, though he said he would never bet against the company, Buffett told Quick he wouldn't be buying Amazon shares anytime soon. "I've blown it in terms of making money on it," he said.
But Buffett is investing with Bezos in a different way, and making a much bigger commitment than simply buying stock. Amazon and Berkshire Hathaway, along with J.P. Morgan, have started a joint venture with the intention of disrupting the U.S. health care industry. Of the three CEOs involved, Buffett, Bezos, and JP Morgan Chase's Jamie Dimon, Buffett said, "We like each other and we trust each other. And so that's going to work very, very well."
2. BYD CEO Wang Chuanfu
BYD (for "Build Your Dreams") is a Chinese manufacturer of automobiles and batteries that is building electric bus fleets and monorails for cities around the world. Berkshire Hathaway bought a large stake in the country in 2008. Wang, a trained chemist and the company's low-key founder, is worth about U.S. $5.5 billion.
Charlie Munger, Buffett's long-time business partner and Berkshire Hathaway's vice chairman, first suggested investing in BYD, Buffett told Quick. "Charlie called me one day and says, 'We've got to buy BYD. This guy runs it better than Thomas Edison.' And I said, 'That isn't good enough.' And he called a little later and said, 'He's a combination of Edison and Bill Gates.' And I said, 'Well, you're warming up but it still isn't good enough.'"
Eventually, Munger's view prevailed. "Now it's worked out so well that I'm actually starting to remember that it was my idea," Buffett said. Of Wang, he added, "He's got big, big ideas and he's very good at executing."
3. Precision Castparts CEO Mark Donegan
In January 2015, Berkshire Hathaway announced it was acquiring Portland, Oregon metal components maker Precision Castparts in a $37.2 billion deal that is the company's largest buy so far. (Berkshire Hathaway has $116 billion to spend and Buffett says he's eager to buy something--if he can find a deal at the right price, so that could change if something strikes his fancy.)
At the time of the acquisition, he characterized as a bet on CEO Mark Donegan. So far, that bet hasn't paid off all that well, but in answer to a viewer question, Buffett declared himself happy with the acquisition. "It has not earned as much as was in the projections," he said. "But that's a very long term business and the contracts they can get run out into the mid 2020s."
Of Donegan, he said, "He is an extraordinary business operator. I mean, he just loves figuring out how to make things...Mark never stops working and he built a sensational company. And he will continue that with us."
4. Apple CEO Tim Cook
In the past year, Buffett has sold large portions of his shares in IBM and invested more and more heavily in Apple. Asked why, Buffett said that he was wrong to have bought IBM in the first place. "I've felt that Apple has an extraordinary consumer franchise," he said. "I think I understand consumer behavior perhaps better than I do the tech business." And, he added, "I like Tim Cook very much. I like their policies. I see how strong that ecosystem is. I mean, I look at my grandchildren, my great-grandchildren, and everybody in the office, their families. You are very, very, very locked in, at least psychologically, to the product you're using."
However, a viewer question focused on one discrepancy. Buffett is a public booster of the companies he invests in: He's often seen guzzling Coke or Dairy Queen items for example. But he still uses a very old-fashioned flip phone. Is he planning to get an iPhone?
"Yeah, well, Tim Cook's asked me that," he responded. "The answer is just I'm out of touch. But I tell Tim as long as I haven't gotten one, the market's not saturated. The day I buy one, there's probably nobody left after that."
Buffett did make one thing clear: If he ever does buy a smartphone, it won't be an Android phone, even though Berkshire Hathaway used to have a stake in Samsung and Buffett still follows that company. When the day finally comes that he joins the modern mobile world, it will be with an Apple product.()