>> hi, everyone, welcome to "on the money." i'm becky quickf we speak with what many call america's best investor. >> you shouldn't think of buying and selling your stocks every day. >> unemployment ticks up. what does it mean for your investments? and the power of the dollar, what money might be able to do what military might can't. "on the money" starts right now. >> heersz a look at what's making knew as we head into a

new week on the money. signs of the economy may be waking up with a better than expected jobs report for february. 175,000 jobs were created last month. that was more than most economists predicted. the unemployment rate kicked up to 6.7%. the number in the two previous months revised upwards. it was mostly blue skies and sunshine for the weekend. by thursday, the s&p 500 hit a new high, while the dow was less than its record. the markets were mixed on friday. cold weather hammered auto sales last month. gm and toyota all fell. the industry hit an annual pace of 15 million sales, about on track with a year ago. americans are worth more money than ever. a few survey by the federal reserve shows the household assets roads nearly 4% in the last quarter in 2013 to more than $80 trillion.

it's largely due to rising real estate values and the increase in the stockmarket. if you shop at radioshack, you might want to move fast. the company is announcing it is closing more than a thousand of its stores. >> that came after the company reported a 20% drop in sales. more than 4,000 radioshack stores will remain opened t. markets want to go higher. the unemployment rate ticks up. are we moving away from the big chill on the economy? we have erin gibbs, the investme investment capital. the jobs report was better than expected, 175,000. it makes you start to think, what does the mean about the economy. nathan, what do you think? >> slowly, slowly, slowly. becky, we have been going 20 miles an hour. we are in a financial school zone. all of a sudden you are going 25 miles an hour. >> it feels like you are speeding. >> for while, whipped in your hair. then you go, okay, we are

getting better. the weather was cloudy, everything, as you start to peel away the weather, you see it's a better economy. service jobs aren't high paying jobs. when income for the average family is going for 54,000 with an ad justed basis to 51,000 now. that's 85% of the economy, you go, yeah, okay. you go faster. you get out of the school zone, you don't have to worry about getting a ticket or running over kids. it's not xa you and i would call dynamic. >> i will give you that. it's not 3,000 jobs. are we getting through the weather? >> i think that's what we are seeing. i think where we come from weather are the housing starts, which are still low. and retail sales, because right now, they're still reporting on february. and we did see definitely a decline. i think other than retail and any industry where you have to be outside, like building house, other than that, that excuses them and gone. we had also the pmi up last month for february up another two points to 53. so between jobs reports coming

in, also seeing a lot of other economic indicators coming in for february, looking better, i think the only thing that will take a little while longer is housing. that's also a question of just higher mortgage rates. you know, has it really been the weather? how much is weather versus how much of it is people still can't afford those houses. >> let's talk about stock price, we are five years from the market's lows, we have come an awfully long way. we are hitting new highs. does any of this feel frothy to you? >> i wouldn't say frosty. we are priced for per fex. that's the term we used. we are trading 16 times board earnings for the s&p 500. historically, for the past five years, we are trading at 13, 13.5, we are high. it's by no means a bubble. but it is priced for perfection. so if there are any disappointment, we could see a consideration. >> megan, i worry at this point because if people have been

sitting out, are they buying at the high surface. >> they are probably buying at the upper end of okay, if there is such a technical term as okay. when we look, erin was saying you take a look at what people are paying for a dollar's worth of profit or the price earnings ratio of the stock, almost every part of the market, lashlg cap value, large cap graet, mid-term cap and growth, they are trading above their historical pes with one exception, large cap growth. i like etfs. all right. so i would say ivw would be a great way to go get large cap growth. it is trading about 87% of the historical pe. it's the only sector when you look at any kind of a chart they still sell at a discount. otherwise, we are still selling at fair value unless we get revenue. we see great financial engineering with all these organizations. american business has played this game fabulous, but we like to see more cars and a few more chips on the table. >> erin.

>> we are seeing greater revenue. we came in at about 2% revenue growth for 2013. estimates are 3.re68 knew growth. so there are expectations. they've come down, because everybody is in mourning about the weather. we are expecting that revenue growth coming in for 2013. >> very quickly. if you can't buy an s&p index, if we seen a lot of gains for the markets, what would you tell clients might be the best performers? >> right now i will not go about performance. i will go on defense. the bond stockmarket three times as big aed the stockmarket and three-and-a-half weeks ago when the stockmarket went down, you saw people bail out of etf stock funds. they bought a lot of bond funds. now we seen the treasury from 2.6 to 2.8. in the bond market, you have to shorten your duration. it's a nice way of saying you don't get hurt when interest rates go up. i think that's the best play for an investor on defense.

>> erin, your best advice? >> we are bottom up. we look at companies when they have been beaten out, out of favor. century link is a telecom is one we see, it's one of our favorites, as well as fossil groups. it's trading blow the average. >> all right, thank you both so much for your time. >> thank you. unnext, we are on the money. can money do what military might can't? how russia's invasion might be brought down by the almighty dollar. warren buffet reveals the secret to picking the right stocks and what one of the richest men in the world says about growing your nestegg. .

. >> the market got scared of the invasion of crimea about a day. it still has an impact on the global economy. still to explain is richard

haase, the president of the foreign relations. thanks, for being here today. >> thanks, for having me. >> what happened here? was this diplomacy or military threats or something the global markets themselves did? >> the global markets did it initially. now what the united states is trying to do is put into place sanctions. the real question is how much at this point the europeans are prepared to go along with the french, the germans, the brits, are all critical. my own sense is they're only going to give limited support at this point for sanctions. they're probably prepared to see the russians stay in crimea. what i think they would be, however, prepared hopefully would be to jack up sanctions if it looked like the russians were going to try to expand their footprint if you crane. >> why do you think it's limited support? why do you think the europeans aren't more willing to jump on board? >> partly, it's a five of coursal issue with prevalence in the cold war. what's the best way to affect the behavior of moscow? perhaps the europeans were

closer physically, they have been reticent about a policy. in certain instances, you have bank deposit itself and the rest they feel vulnerable to whatever it is the russians might do. >> hillary clinton said this week, this reminded her of when germany invaded poland. does this remind you of that same situation? >> no, it doesn't. you don't sister that set the of ambitions or ideology. what i think this was about was mr. putin essentially lost the strugglele at least temporarily to the orientation of the government in ukraine when president yanukovych was forced to leave the palace and i think this is his way of offsetting it politically. i think this is as much for domestic consumption he was very worried that people in moscow would seat the setback in can i ever and get the idea that he, too, could be challengeled. dwroe see this as a part of a larger design if you will on europe. >> a lot of people have brought

up the idea that this could be a reflection or at least something could have come out of this. the result of what we heard earlier from president obama when he drew a red line for syria and then didn't back that up. are there implications from that here? are there anything that's right along the lines? >> it's always hard to know water going on pence the head of a foreign leader, particularly one like mr. putin. by and large, no. you have all sorts of soviet challenges, whether it was in hungary in '56 or chechoslovakia in '68. you had the georgian challenge even when george w. bush was president. i think this is about such things as geography. it's about politics. it's about history. russia has always had a special place in ukraine. this is very near abroad. you do have 15, 20% of the people of ukraine who are ethnic russians and russian speaking. i think it's dangerous to apply historical precedence. >> you point out that europe has been reluctant to go along with

the sanctions against russia. part of that may be because of their reliance on russia from natural gas. is there something that pushes the united states to export more natural gas as a result of this? >> well, absolutely. you know, for so long, u.s. policy towards gas and oil have been seen through a prism of template of our diplomacy. but look, over the last couple of years, our energy reality has been fundamentally reformed. so what we should think about now is energy literally and figuratively as a resource as a strategic instrument or tool. we ordered the opening up of liquified natural gas exports to places like you kravenl oil exports, we ought to look at the transfer of technology so a company like ukraine can have their own shell deposits. they have a little military reach to near or abroad. what they got is oil and gas. the united states could help dilute russia's comparative advantage if only we would change our export policy and i would think this is something

the white house and republicans and congress ought to be able to agree on. >> obviously, this will put a little more pressure on all of them to get together. what's the best case scenario? what's if worst case scenario? how do you think it end? >> the best case scenario would be the russians would walk it back. this would take some kind of negotiation, where they would get a role in the future of ukraine's economic and political orientation. you get some special protects for the ethnic russians, they keep their strategic access to the long shot. the opposite is they would now try to expand their control over larger parts of ukraine. i think the most likely scenario for this foreseeable future is essentially a version of what we have where they essentially sit on crimea, crimea one way or another becomes autonomous or somehow gets more into the russian orbit and this becomes the new normal for the foreseeable future. >> all right. richard, thank you so much for your time and for explaining

everything to us. we really appreciate it. >> thanks, for having me. >> up next, with reon the money. billionaire investor warren buffet breaks down how to retire rich and buying bonds isn't at the top of the list. >> people retire at 65, they probably have an expectable life span of 20 years and i would own equities. .

. >> he is the oracle of omaha,

one of the world's greatest investors. warren buffet sat down with me in a rare interview this week. in the past, he said you should be greedy when others are fearful and fearful within others a greedy. so what does he feel now. >> it's in between. you certainly are not seeing a lot of fear, but except maybe in a few tech areas you haven't seen me take over either. most of the time the market is in a zone or regional. it's occasion that gets way out of line one way or the other. >> we've cam off of those incredible lows. when you first called it the lows five years ago. >> you can't calibrate it precisely. i don't know exactly what the markets should sell for. i know they shouldn't sell bull extra. why, everything of the sort. over time the market is going to go higher and higher. in your lifetime, you will see numbers that make these ridiculous. >> you suggested in your most recent shareholder letter for an

average investor who doesn't know a whole lot about the market, it would be a good fwoet put 90% of what they have into an investment furngsd an s&p index fund that tracks the s&p 500 and maybe 10% in bonds. some people, particularly retirement specialists would say that's crazy, you should be 60/40 in terms of stocks and bonds. why 90/10? >> well, stocks will do better than that, over time. now, if you are bothered by price fluctuations, then you, maybe you shouldn't own those stocks. if you are the type those into stocks and then if they're down 20%, it ruins your life in some way, you will sell them. you are just not psychologically equipped to own stock, but there really is practically no risk in owning a diversified group of stocks if you hold them for a long period of time. there is all kind of risks if you want to hold them for next week. nobody knows what next week will

bring. >> as you get closer to retirement, does it make more sense to put holdings into bonds? >> you may. it's hard to tell about retirement. people retire at 65. they probably have an expectable life span of 20 years and i would own equities, you know, in my own case, my wife will be 70 or older when i die and she will have 90% in an s&p equity, s&p 500 no loan fund with very low costs and she'll keep very low costs and money separately, so if she needs stocks at any time she doesn't need stocks at that time. >> let's talk about economy. there have been huge questions as to whether we are seeing a slow down across the american commitment you have a great idea, have you so many businesses you own at berkshire and you have so many stocks you invest in from coca-cola to american express to wells fargo. what is your take on what's

happening now? >> we are seeing now may be affected by weather, what we are seeing is the same kind of recovery we had now since the fall of 2009. so it's almost five years. it's a few percent a year, which is not bad. it's not as much as people would like. there is nothing wrong with that over time. it's been quite steady. at various times people got more optimistic about things, they thought it was going to take off. other times they talked about a double dip. right straight through you have this steady gain. >> how concerned are you about rising tensions and the escalating conflict in ukraine with russia between russia and europe and the united states? >> from an economic, it's terrible for the people involved. but for an economic standpoint from whether you should keep the farm that you own, whether you should keep the apartment house you own or you should keep a little piece of the business you own for your stocks, it has no effect. the idea that you would buy or sell an investment, a real investment, something that you hold for ten or 20 years that

will produce more and more for you over time, i think you should buy libations on headlines is nonsense. >> there were serious concerns earlier this year about emerging markets, that's what put our stockmarket into a bit of a tizzy. is that right for us to worry about contheygion from those markets? >> well the markets have had more trouble. there have been currency depreciation. again, if you have a wonderful, private business, you live in omaha or lincoln, nebraska, you will not sell it because of emergings markets, if you own 500 wonderful business, not all wonderful, but most of them. you own them through an s&p index fund, why should you own them differently, you shouldn't think of buying or selling your stocks every day, it's a terrible thing. >> you think there are more opportunities around the united states or around the world right now? >> this is a mother load for opportunity. we invested $11 billion in equipment last year.

90% of it was in the united states. >> there have been almost two economies here in the united states, though the wealthy have done very well. people at the bottom end of the scale not so well. the president has brought up the idea of raising the minimum wage as a way to address the equality. is that a plan? >> i would prefer increasing the earned income tax credit. >> that really hits everybody that's working in a significant way. and their income. there is no question, inequality has widened out t. rich aren't rich because the poor are poor. it doesn't work that way. but this country has gotten richer and richer. forbes 400 had a little over $2 trillion this year. that's a record by far. but most people are not hitting new records and so, our economy is doing really quite well. but there is a whole lot of people in the economy that aren't doing well and an increase in the earned income tax credit is significant. one would benefit a lot of people who deserve some

benefits. >> so, why did warren buffet's measure lag the s&p 500 last year? his answer when we come back. as we head to a break, take a look at how the stockmarket ended the week. . measure lag the s&p 500 last

>> for more on our show you can go to our website and follow us on twitter. the oracle of only ha admitted he doesn't always get it right, berkshire hathaway under performed the s&p 45u678ed last year. it under performed the index for the last five years. warren buffet explained why it's hard in tough times. >> why we do better in markets moving up moderately or the down markets that move up a lot. there has only been one year in the last 49 when the markets were, well, any area that we fell short, the markets were up 15% or more except for one year, so we just don't do well. we like to have had one better than the tail wind. >> i'd like the thank warren buffet for his time. by the way, here are the stories that are coming up that may move the markets and impact your money. mock donald will report same

store sales. we'll see if they bounce back after three straight declines. monday is target deadlines to submit documents to congress of when exactly it learned of the security card breach. on tuesday, rupert murdock will be celebrating his 83rd birthday. thursday, retail sales for the month of january are due and on friday the producer price index is out for the month of february. that's the show for today, i'm becky quick. thank you so much for joining me. my guest next week, jack welch on the economy and the state of american business. each week, keep it herer, we're "on the money." have a great weekend. and i will see you next weekend. if you wear a denture, take this simple test. press your tongue against it, like this. it moves! do you feel it? it can happen with every denture. these movements may irritate your gums. but you don't have to bear with it. you can try fixodent plus gum care.

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[ticking] >> in a nondescript t-shirt at a nondescript desk, mark zuckerberg runs a vast global empire, leading the whole internet in his direction. is the goal for you to conquer the whole internet? to own the internet? >> well, think about it like this. people--if they can use a product of any category--photos, music, tv, anything--either by themselves or with their friends... >> mm-hmm. >> i think most of the time, people want to do those things with their friends, so-- >> so is the answer "yes"? [ticking] you describe bill gates in very harsh terms. um, you've described him as being quite abusive.