May 4, 2009 -- A record 35,000 faithful Warren Buffett investors flocked to Omaha over the weekend for Berkshire Hathaway's annual shareholders' meeting. But not even the world's most famous investor is immune to what he himself dubbed a financial hurricane; 2008 proved to be Buffett's worst investment year on record, in large part due to his significant stake in the banking sector. Yet he's convinced that the nation's largest banks are in good shape.
"Good Morning America's" Bianna Golodryga sat down with Buffett to get his take on banks, the economy and Berkshire Hathaway. He started by expressing optimism about the banking sector.
Warren Buffett: Actually, banks are doing very well on new business, and their deposits are coming in … those 19 banks [that received bailout money] will all be OK.
Bianna Golodryga: How would you grade the way the treasury handled TARP?
Buffett: On the TARP money that has gone to banks, in large part I think they [taxpayers] will get that back with interest.
Golodryga: Let's talk about our recovery. The administration is cautiously optimistic that we will see the economic recovery by the end of the year. Where do you stand on that, and what type of recovery will that be?
Buffett: The answer is, I don't know. I wish I did. Incidentally, nobody knows. We have gone through all recessions, [which are] are somewhat similar, but they have differences. This one was a real shake, really shook up the confidence of the American public. They changed their buying habits, their saving habits all kinds of things, and we don't know when that will be over. We do know it will be over, but I can't predict the timing.
Golodryga: To Americans who say they are worried that our best days are behind us, what do you say?
Buffett: No way. If you look at this country 200 years ago, people were just as smart innately as they are now. … The American system unleashes human potential, capitalist system and American system of rule of law, and market economy, quality of opportunity, none of those are perfect, but we have always gone in that direction and just look at what has happened over these 200 years.
Warren Buffet Answers Questions About the Economy
Golodryga: This comes from Twitter: A "Good Morning America" [viewer] Twittered this question in. They wanted to know what your best and worst investment decisions were.
Buffett: I made a terrible one last year in buying a lot of Conoco Phillips. Nobody made me do it, but it wasn't ConocoPhillips' fault, but when oil was very high I bought. ... I just misjudged. I overlooked certain facts in the situation, but I made lots and lots of investment mistakes, and I will make more in the future.
Golodryga: Your best?
Buffett: The best? Well, probably buying Geico may have been, I mean, my experience with that company goes back to 1951, and it is a marvelous company and terrific management. They do all the work, and I just try and take a little of the credit.
Golodryga: And a great lizard.
Buffett: The Gecko does all right for us.