welcome to "on the money." our conversation with the world's greatest investor, what warren buffet knows about the stock market. >> i have no idea what the stock market is going to tomorrow, next week, next month or next year. >> but he does know a good deal when he sees one. we'll meet the man who negotiated with buffet for seven years before selling. you may not like to think about it, but you really should. how much life insurance should you have, what kind and when should you buy. k "on the money" starts right now. >> announcer: this is america's number one financial news program. "on the money." >> here's a look at what's making news as we head into a new week on the money.

america's unemployment rate stands at a six-year low. the jobs report show that the economy added 248,000 new jobs. that was better than expected. the unemployment rate is at 5.9%, the lowest levels since 2008. that set stocks off to an open after a rough start. correction territory this week falling 10% from its recent highs. imves investors in the u.s. were disappointed after the european central bank didn't do as much as it hoped. the bank will start buying private sector bonds later this month. but there was speculation that there would be an even more aggressive policy. imagine this, your net worth is somewhere between 1.1 and 2 2 $.3 million. you make a hefty payday every

time you give a speech. you think you'd have no trouble at all refinancing a mortgage. well, not the case. bernanke told that story during a speech this week and get this, he said it wasn't a joke. it illustrated his point that lending standards may be just a little too tight these days. >> volatility returns the markets and the jobs report is out as well. joining us right now is chief investment strategist and, liz anne, thank you so much for being here. >> thanks for having me. >> the jobs numbers were better than a lot of people had been expecting. 248,000. unemployment rate falling to 5.9%. what does that tell you? >> it's a good number. one of the internals of the number that could have potentially caused some problem is if there was a big pick-up in wages. so it was kind of as good as it gets. and some of the reason for the decline in the unemployment rate

was separate from labor force appreciation. a lot of people found work and a lot of less people were unemployed. when you look at unemployment claims, which is the leading indicator for jobs, they've been telling you we've got strong numbers. and then with the nice upward revision to august's numbers, that was a bit of an aberration. >> the markets seem to have been much more volatile. there's a lot more nerves coming from investors. are they right to be nervous? what do you think when dips like this happen? >> as you know, we've been very optimistic for this entire bull market. in august, i got a little bit more cautious just in the short term. there were a number of factors attributing to that. the sentiment started to get a little bit elevated in terms of optimism. and then the internals of the market, the percentage of stocks

reaching new highs started to narrow a bit. so one of the ways to think about it, soldiers not keeping up with the generals. and then, it's also a midterm election year. and that tends to bring some volatility in advance of the elections. so the good news is, based on history, not a forecast, every single time, the rally there after has been quite strong. you get a sell-off , but it's great buying tubt. >> we're within call it nine months of the first rate hike. >> so you don't necessarily think that we've seen the highs of the year? >> if we have -- i guess we have 4.2% dropping the market from the all-time high to the recent dra day low. if we had something more akin,

then it's going to climb back to the prior highs. >> we do have a little bit of disappointment this week. investors have been kind of hoping that mario would say something that the ecb was stepping in with more concrete measures. they didn't get that. is that heartbreaking at this point? >> what's interesting, there's so much desire for drago to step in and do u.s.-style quantita quantitative easing. my concern is they're providing all of this liquidity to the banks, investors want them to provide even more. but at the same time, they've got these stress tests on the banks. here's the money banks, but be careful how you lend it. >> also, you can provide as much supply as you want, but if you want lending to pick up, you need loan demand, too. it's not just on the supply side.

i think the problems are europe are so deep and reform is such a requirement, i'm not so sure the demand side is going to pick up. so i think the structural problems in europe are a bit deeper. given some natural volatility at this stage of the monetary cycle, i still think the u.s. is the place to be and that's one of the key reasons why the dollar is doing so well. >> what do you tell people beyond just u.s. stocks. we've seen flejlations with the dollar, we've seen the dollar run up. it sounds like you've seen what we're going to see right now? >> i think we're in a long-term multiyear market for the dollar. that doesn mean it goes straight up like it has over the last 11 weeks oar so. but i think the reasons why the dollar are doing well are very different than why it did well during the financial crisis. now, i actually think there's increased confidence in the dollar as a currency. in the nation it represents, in

its reserve currency status, all of which are a good things. and as a consumption economy, that is a huge positive. so i think good reasons why the dollar is doing well this time and it's good for our economy and our stock market. but that doesn't mean it goes straight up forever. >> but the bottom line is you would tell people to buy on dip because that's the place to be? >> we also do like emerging markets. i think you have to be or should be a little bit more selective within that index. you're going to have a wider spread between the writteners and the losers. but i still think, in the medium term, u.s. probably out-performs emerging markets. but we think jowl an opportunity there, as well. >> up next, we are "on the money." the second richest man in america, chairman and ceo warren buffet on his investments. cars, coca-cola and newspapers. >> you wouldn't necessarily say that's an investment for everyone? >> oh, no, i don't think it's an investment for hardly anyone.

>> later, what's your life worth? what kind of life insurance is right for you. how much you should have. right now, as we head to a break, take a look at how the stock market ended the week. big day? ah, the usual. moved some new cars. hauled a bunch of steel. kept the supermarket shelves stocked. made sure everyone got their latest gadgets. what's up for the next shift? ah, nothing much. just keeping the lights on. (laugh) nice. doing the big things that move an economy. see you tomorrow, mac. see you tomorrow, sam. just another day at norfolk southern. then a little time to kick back. earn double hilton honors points with the 2 "x" points package and be one step closer to a weekend break.

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dave, i'm sorry to interrupt... i gotta take a sick day tomorrow. dads don't take sick days, dads take nyquil. the nighttime, sniffling, sneezing, coughing, aching, fever, best sleep with a cold, medicine. he's the man that many call america's greatest investor. warren buffet. thank you for joining us today. >> fun to be here. >> we have a lot of people at home watching the stock markets who have gotten very nervous by some of the dips. what advice would you give to those people sitting at home? >> i have no idea what the stock market is going to tomorrow, next week, next movant or next year.

i do know it's going to be higher ten years from now. if you own your stocks as an investment just like you'd own an apartment house or a farm, look at them as a business. you have a group of american businesses and you're going to own them for ten years, you're going to do fine. if you're going to try and buy and sell them based on news or something you neighbor tells you or something like that, you're probably not going to do well. so find a good bunch of businesses and hold them. >> and that's what you've been doing for decades? >> i've been doing it all my life. yeah. you will not make money trying to buy and sell stocks daily or weekly. >> you may not know exactly what's going to happen to the market tomorrow, but you do have a pretty good idea about what's happening in the ed conmy, you know all of the companies from burling ton northern to a company like american express. where do you think we're headed? >> well, the economy since the fall of 2009, that's five years

now, has been increasing at a pretty steady rate. it's been a pretty steady increase and it doesn't accelerate a lot. it doesn't decelerate a lot. what we've seen now is exactly what we've been seeing for five years. an increase at a rate that doesn't get people all excited and i think we'll be seeing that a year from now. >> in terms of what we've seen from some of the companies that you own big stakes in, coca-cola this week, said it would be changing the package that it pays its executives, in terms of how they break up and pay them in stock or not so much in stock. you are someone who was a proponent of changing that plan. what do you think of what they put out? >> i think that the compensation committee working with the board has crafted a very, very sensible plan that involves far less issues of stock, more

payment in cash, performance related in both cases. and i think it's a very logical plan. and i think the stockholders are considerably better off than they would have been if the comp committee hadn't done what they did. so i tip my hat to them. >> you've bought up about 28 regional newspapers. that's an investment that a lot of people thought what the heck is going on there. that's a shrinking industry. how have those investments paid off for you? >> they worked out okay, but they're right. it is a shrinking industry. those papers will earn less money five years from now than they earn now. but we bought them at a price where we factor that in. is a lot of papers are going to disappear over time. >> so you wouldn't necessarily say it's an investment for

everyone? >> i wouldn't think it's an investment for hardly anyone. >> earlier this year, bershi bershire hathawaway was listed as one of the worst places to work if you're lesbian, gay, bisexual or transgender. they said you don't have policy that is protect employees and make it a safe place for them to work. how would you respond to that? >> well, what probably happened is we get surveys all the time on men and women, you know, you name it. all different kinds of things. and we basically don't answer them. we have 75 subsidiaries out there running their businesses, 300 some thousand employees and 25 people in a headquarters. we do not, every time we get a questionnaire, go out the 75 and have them do a lot of work to fill them out. certainly, our managers know how i feel. i am a hundred percent for full rights in every respect for gay

and leez bee yans. but i conot set the policies for the 75 companies. i know what they are at a few of the larger ones, and i think they're quite progressive. i would say that -- i've seen this listed as zero in some of the surveys. >> this week, you also added a new company. you're always looking for a new deal. this time around, you bought van tile autogroup. what lured you? >> larry van tile talked to me six or seven years ago. i understand the business. and i think the way larry runs it is extraordinary. >> he had some partners. it's something that we'll own for a hundred years. it's the kind of business we can expand a lot. there's 17,000 dealers in the

country and we're buying 78 of them through this means. this will be a big business. >> well, i want to thank you so much for your time today! thanks for having me. >> when we come book, we'll be speaking with the man himself, larry van tuyl. stick around. "on the money" will be right back. ♪ man: [ laughs ] those look like baby steps now. but they were some pretty good moves. and the best move of all? having the right partner at my side. it's so much better that way. ♪ [ male announcer ] take the next step. consider an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company. like all standardized medicare supplement insurance plans, it helps pay expenses that medicare doesn't cover

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welcome back, everybody. we just told you about the new deal that warren buffet cut. now we're talking to the gentleman he cut that deal with. larry, thank you so much for being here. >> thank you, becky. >> van tuyl is a company started by your father. how did that company start? it was one auto-dealer! he started as a shef ro lay dealer in 1955 in kansas city! how did you grow to 78 dealerships over that type time? >> he saw the opportunity that if you grow and develop good people, that you could develop partnerships and go out and acquire additional franchises in different areas. they are a large ticket item. automobiles are fairly expensive items. it's one of the last large ticket item franchises available in the country. >> you've been working with the company for over 40 year sns. >> over 40 years, yes. >> what made you go to see warren buffet six years ago?

>> we've had the business for 62 years. our people are great. we want to continue the culture of that. and so i looked for something that i thought was similar. and there really was only one. and it was berkshire hathaway. i actually went to see mr. buffet on an exploratory, get-acquainted and confirm my thinking that our cultures were the same and that it would be a great fit for the long term t vieblt of our business. >> it took me that long to make sure that i was personally ready to do that. >> you're still staying with the company, though? >> yes, i am. >> the company is now going to be known as berkshire hathaway automotive group? >> that's right.

>> i think that berkshir berkshire hathaway is a bigger name. we're very proud of our business. again, our people know what's going on. that's the most important thing to us. >> what do you think about how consumers are right now, how willing they are to drop down money for a big-ticket purchase like a car. >> business is good. business is good. and we believe it's going to continue to be good. products are great. it's creating a lot of demand. so whether it's gas mileage or technology. so we believe it's going to stay good for quite some time. >> larry, i want to thank you very much for joining us today and sitting down. >> thank you, becky. >> up next, "on the money" a look at the news for the week ahead. investing in life insurance. finding the right plan to build a financial safetiness.

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for more on our show, go to our web site, otn@cnbc.com. here are the stories coming up that may impact your money this week. earnings are starting to trickle out. monday, fortune's most powerful women's summit begins. on wednesday, the fed releases minutes from its september meeting, on friday, the

international monetary fund and one of the world's most coveted award, the nobel peace price. the winner of that will be announced. life insurance. it's a subject that consumers rarely like to think about. one in four consumers have no life insurance at all and many sitly have no idea how much insurance they need or the best place to get it. sharon is here to go over what you need to get more adequately covered. many people get life insurance through work. less than half of consumers ages 25-64 with household incomes between 35,000 and a hundred thousand dollar haves their own life insurance policies. that's according to the insurance industry group, limra. most were not financially prepared for the death of a family member.

>> the biggest mistake they make is not owning enough. that is the single biggest thing you've got to get right. you don't get a second chance. >> like most experts, he says the first step is to see how much money you need to cover your financial needs. >> how do you know if it's you? >> basically, if anyone depends on you financially, it's married coupl couples, parents of young children or single people caring for an ageing parent. remember, it's also a great way to pass on money to heirs and have that reliable source of income for them. >> here's the million dollar question. or maybe million dollar or so question. how do you know how much you need? >> e you really have to see where you stand right now. how much does it cost to run your household? how much does your family need to operate on a daily, weekly,

mun p monthly basis. you need to calculate all of those numbers, in terms of the debts you owe, as well. and then think about what your future obligations are. are you going to pay for your kids' college education, do you want to plan for those types of financial needs, as well. that may be done the road. and then figure out the resources you have. social security, survivor benefits and any emergency reserves you might have. whatever the difference is, that's what you need. >> you brought up a good point. most of us that have life insurance have it through work. is that smart or not guilty? if something happens to the job, the life insurance is gone. >> exactly. and people don't realize while they're well-covered while they're at work, they are not portable. it's important to understand that you may need to buy life insurance on your own. you probably should have some on your own because you never know what's going to happen with your job. and then people get caught up with, okay, i'm going to buy it,

but what kind do i buy? there's term life insurance and permanent life insurance. term life insurance is going to be a lot cheaper. and the term is going to do just what it says. a specific term, a specific period of time. the permanent policy is there for the rest of your life. while you're paying more in it, it is an investment and insurance product. you're getting a cash value that you may be able to use for other things along the way. it is something that's going to be there forever. that's what a lot of foerks use to pass on. >> thank you so much. that does it for us today. thank you so much for joining me. each week, keep it right here, we're "on the money," we'll see you next weekend.

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