anything there >> lsu basketball and jamal waters >> go duke xpo logistics. it's working >> go who? >> just kidding. >> dunkin brands breaking out to an all-time high >> thanks for watching "the exchange" with kelly starts right now. thank you, scott hi, everybody. here's what's ahead. an exclusive interview with berkshire hathaway's warren buffet we'll talk apple, airlines, rates. we'll ask him about that, the stock market rally, fed rate cuts and so much more. speaking of the growth debate. gdp slowed in the fourth quarter barely hitting the administration's 3% goal that's q4 over q4. we'll get into the math. the likelihood that rate cuts may be coming. plus, lyft to 100? an airline collapses leaving passengers stranded and tommy hilfiger is back that's in rapid fire we begin with today's markets and dom chu. >> the markets seem to want to

stay around this level the 2800, 2815 level in the s&p 500, can't get around or away from that particular level. just up by 0.1%. the dow were up as much as 117 at one point and down 49 smack dab in the middle of that range right now. we'll see if the afternoon picks things up. nasdaq up 0.2% one thing to watch is the consumer staples that trade, one of the leaders today, one of the three best performing sectors so far up about a half a percent for consumer staples on the s&p. if you loorking for things, proctor & gamble and church and dwight, chd, two names that hit record highs today and one other place to watch, the stock of the day we've talked about lulu a lot but accenture up 5%. posting better than expected profits, sales and a brighter outlook. over to you. welcome to "the exchange." i'll kelly evans fed vice chair richard clarida

saying economic shocks abroad can hit the u.s. directly saying the fed will stay patient here tending home sales dropped in february despite lower rates and oil prices fell slightly today after the president tweeted asking opec to boost production let's drill down more on these markets. bob pisani is at the new york stock exchange >> hello, kelly. markets are still choppy but bond yields have stopped dropping, and that's providing some support for stocks today. the first quarter has come to a close and despite all the anxiety over lower treasury yields, investors should be very happy with their investment portfolio in the first quarter let me show you. it's not just the s&p 500 is up more than 11%. the best quarter since 2012. everything is up and i mean everything. this is very unusual stocks and bonds the russell 2000 is also up about 12%. wait a minute. your bond portfolio is doing great. high yield bond etfs are up 6% corporate bond etfs up 5%.

even treasury bond etfs up more than 2%. and none of this includes the dividends. even better if you include that. what does all this stuff mean? everything is up if you had a portfolio like the one i'm just putting up right here and say you had a 60/40 stock bond split, you're up about 9% this quarter. heavens, that's a very impressive gain for a balanced portfolio. not bad for three months work. back to you. >> bob, thanks the final reading on fourth quarter gdp showing the economy grew at 2.2% pace. that was revised down from the earlier 2.6% estimate. joe lavorna joins us, andres garcia and steve liesman steve, what was the annual number q4 over q4, was it 3%? >> 3%. i've seen 2.97%. >> wow >> what i like to call it is it

is just at the economically insignificant but politically important 3% level because if you tell me growth was 2.9 or 3.1, i don't care but some politicians and some people who oppose the politicians seem to care. >> so you are saying -- joe, we talked about this. the convention is to measure from the fourth quarter of one year to the fourth quarter of the prior year the d.c. convention for this sort of stuff. previously 3.1%. it came down to 2.97 so you round -- >> to the hundredth? >> i like to go three decimal points >> how far do you go >> i like to round to the nearest whole number there's a lot of noise in these figures. >> this will be revised over the next five years. the average revision over that time period, plus or minus 1.3 percentage points. >> that's a joke that's a huge number >> we have no idea >> we barely have a sense of what's really going on with the economy. joe, where does that leave policy then?

we have the federal reserve trying to decide whether or not rate cuts are appropriate. the trump administration with its own sort of sense of things but what is the picture here that we're learning? >> the momentum in the economy is slowing and there's not very good breadth. meaning if you look at the investment side you're seeing weakness, capital expenditures, weakness in residential investment and some -- going to see some weakness in inventory positioning. while we don't know the exact pace of gdp down to the first or second decimal place, momentum is less and my guess also is that inflation which doesn't get revised will be lower and that's going to put the fed in the rate cutting side >> do you have rate cuts >> yes >> how many? one? >> rate cuts, yeah i don't know if they'll do two this year or just one. it depends what happens with trade and with the global economy. >> brexit, a million other things andres, do you have rate cuts

coming >> if you look at what the market is telling you, it's already starting to price some cuts i'll give the answer of the fed which is they'll be data depende dependent. and i would also like to add that 2.2% is actually more reasonable to the trend of the expansion we had seen. 3, 3.5 was probably running through too hot. i think 2, 2.5 could last longer as an expansion. 3, 3.5 based on productivity based on demographics doesn't really justify, unless policy changes. >> claridas said this morning the u.s. could suffer a downturn that the rest of the world -- that started with the rest of the world gop you believe that it's not a very open economy and it's rare. he was talking more about the risks. >> i think the u.s. is like this big tank it takes awhile for it to get going, but then once it gets

going, something external has to be pretty big to derail it if we hit a recession it's probably going to be self-inflicted either sentiment drops and affects consumption which is two-thirds of gdp. i don't necessarily think what's going to in china would be the reason >> how many rate cuts are economists or the markets pricing in for this year >> i don't have an official number we have a percentage of our cnbc fed survey respondents, of which joe is one of them and i believe it's 15% of the 43 we surveyed in the last survey said that they expect a cut this year jumping to 35% in 2020 i will say it is fascinating to think about how the parameters of discussion has shifted. as far as i know, joe was the only wild man a couple weeks ago.

most people were like, is it going to be zero cuts or one cut? and now -- >> or a few hikes. >> now joe is in the middle kind of we got another guy that thinks three rate cuts over the next 14 months >> he may end up on the fed board if he keeps up that kind of talk. >> that would be a qualification. >> one thing to add is if you look historically, if you look at the last five cycles, the time from the last fed hike to the first cut on average is about seven months it's been lengthening. 15 months in the last cycle but on average seven months. if this economy evolves like you were saying where growth slows into the -- it's a bit less. you talk about overseas. you get into this notion of stall speed. it's vulnerable to a shock which makes it different than the past this could be a pause that refreshes if the fed cuts a few times, stabilizes growth

expectations and rebound next year >> how soon are we talking for a rate cut >> second half of the year >> that sound about right? >> one thing i disagree with joe -- >> got go. >> i don't think they'll do one. if they do one, they're doing four or it's zero. when they cut -- >> i agree with you, steve >> they're going to move aggressively which is why i think they'll wait as long as they can >> guys, thank you joe, andres, steve, appreciate it here's what else is coming up on "the exchange. >> ahead -- an exclusive interview with berkshire's warren buffett his take on apple's new products, his airline investments, the economy and rates. plus -- are we finally making real progress on china trade talks? and lyft ipo's range gets a lift is it getting too frothy this is "the exchange" on cnbc

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white house economic adviser larry kudlow speaking on trade earlier today saying he believes the usmca agreement will pass and there's been, quote, tremendous progress being made on trade with china. eamon javers joins us with more as to how this is playing out. >> larry kudlow clearly very plugged in here at the white house, obviously, with the trade delegation in beijing right now.

robert lighthizer and steve mnuchin finished up a dinner beijing earlier today beijing time kudlow is aware of the details of the ongoing negotiations, and he said this earlier today, which is interesting because it seems to indicate that maybe this might be on a longer time horizon than many thought. take a listen. >> this is not time dependent. this is policy and enforcement dependent. please understand this if it takes a few more weeks or if it takes months, so be it >> so bottom line, we just don't know at this point what the chinese are specifically going to offer and whether or not the president is going to see that offer as good enough to cut a deal but we do have larry kudlow suggesting here there's some patience on the part of the white house. >> it's also interesting because everyone thought the attention after mueller would immediately shift to trade now instead it's shifted to health care. the stocks are down again today.

the biotech etf, health care sector and the gop it sounds like is not thrilled with the way the president has thrown this into the mix. >> look, this started within 24 hours of that news about the mueller report coming out on sunday on monday, the trump department of justice weighed in with a new argument in an ongoing legal fight suggesting that the entire obamacare law is unconstitutional the president for his part says that if that court proceeding throws out obamacare as unconstitutional, the new republican plan will be far better than what obamacare was the problem with that is we don't have any details on what that plan would be remember, republicans tried and failed when they controlled both houses of congress to come up with a new obamacare were unable to do it now democrats control the house of representatives, and some republicans are nervous about the politics of all of this saying that ultimately this health care fight has not been good for them. and the idea of going back into it after having taken a bit of a

political bruising on it is not appealing to a lot of people and the idea of ruling obamacare unconstitutional without anything to replace it also not appealing to some republicans here in washington >> we're seeing the toll across the stocks today as well and this week. eamon, thanks. equinox, the fitness company, is opening a new hotel that wants you to get the best sleep possible they're willing to provide you with a coach to make that happen that and more is ahead in rapid fire later, live to grapevine, texas, where warren buffett is set to take the stage with cnbc's becky quick she'll get his take on everything from apple to the airlines to the fed. "the exchange" is back in two. we're carvana, the company who invented

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welcome back to "the exchange." here are some of the movers this hour telecom stocks are weak today. t-mobile, the worst performer in the nasdaq 100 on reports state attorneys general might oppose the merger with sprint t-mobile shares down 3.5% today. sprint's down more than 4% verizon falling 3.5% among the worst dow performers the retail etf, the xrt is on pace for its fourth straight day of gains its best week of the year and best start to the year since 2013 carvana, boot barn and wayfair have been big gainers. home builders are falling on the back of weak housing data. the home builder etf is hanging

on to fractionally positive territory. now to scott wapner for a cnbc news update >> supreme court will not stop the trump administration from enforcing its ban on bump stock devices which allow semiautomatic weapons to fire like machine guns. gun rights groups asked the court on monday to stop the government from enforcing the ban for now. the house voting to denounce president trump's restriction on transgender members in the military by a vote of 238-185. the nonbinding resolution sent a message of disapproval of the president's plan but the action doesn't reverse policy which is now set to go into effect on april 12th protesters speaking out against the transportation of migrant children to a new detention center in downtown houston. they say they strongly disagree with houston mayor's recent decision to stop resisting the opening of that facility and the worst nuclear accident in u.s. history, the partial meltdown at three mile island happened 40 years ago today. anti nuclear activists gathered outside the facility every year

of the anniversary, and this morning they held a moment of silence. that's the cnbc news update this hour back to you. >> thank you, scott. the new york attorney general filed new allegations against purdue pharma and the sackler family for their role in the opioid epidemic. it's taken over 47,000 lives in 2017 alone emergent resolution spiking on the news joining me is bob cramer, the incoming ceo and president of emergent biosolutions. you take over april 1, right >> i do. >> thank you for joining me here you guys bought narcan last year, right? >> we did. >> you've been looking to expand its use. is that right? as people become more focused on how quickly they can treat overdoses. >> that's right. so our company focuses on coming up with solutions for very complex public health threats like chemical and biological

threats you mentioned, plus emerging infectuous diseases and more recently the treatments for opioid overdoses so we acquired narcan nasal spray last year, specifically looking at how we as a company can help the fact there are 33 million americans today who are at risk of an opioid overdose. those fall into two categories there's a category of 21 million individuals who are on prescription opioids today legally and then another 12 million individuals who are either taking heroin or illicitly using other -- >> similar >> prescriptions our focus is on protecting that 33 million population. >> do you make money on narcan one of the not concerns but one of the things people want to make sure of is that they have access to narcan cheaply so they can be administered effectively to your point. is this something that you guys can look to as a profit center

or do you have to provide it at somewhat of a loss >> well, we have two different channels of distribution so there's the distribution channel that goes to the public interest market. so by that i mean federal, state and local customers and patients and then there's the typical commercial market. so the product is priced differently for those two markets. we offer it to federal, state and local customers, a 40% discount to the commercial price. in the commercial market where the product is widely available in all pharmacies around the united states today under a standing order, it's made available to very low co-pay per dose so it's -- our focus is on affordable access and education of that 33 million patient group who needs access to some form of it >> one final question on narcan which is, how are we doing in fighting the opioid crisis today? there's a lot of attention, a lot of lawsuits and money being

thrown at this problem narcan a big part of helping some say it helps and hurts again because it allows people to keep using. have we turned the tide when it comes to fighting opioid addiction? >> i think we're making progress we have more work to do. this opioid epidemic is maturing and taking various twists and turns. our focus with narcan is to make sure that product is available to that 33 million patient group who really needs access to the product to save lives. >> so broadening out from that, there's been a lot of talk in d.c. about drug prices one area of bipartisan agreement that they are too high, need to be more transparent that the distributors or rebate system is to blame and something needs to be done about it explain, quickly, you guys have a lot of amazing stuff in development. we're talking about vaccines for zika, for anthrax, ebola, many different treatments that you've worked on. how costly is that to develop, and what concerns do you have about the way this drug price

sort of reform could go? >> sure. so if i look back at our 20-year history of developing and making available these different products for chemical and biologic threats, as well as the emerging infectuous disease, our focus is on fair and reasonable pricing looking at our customers' needs and making sure through the pricing mechanism we can earn a reasonable profit so we can play back that -- those investments in our infrastructure one of the common themes across all these public health threat categories is the fact that it really requires a strong partnership between public and private industry we have a 20-year history and track record of forming those partnerships >> is there one thing that could be done to help the sort of convoluted system in your view >> sure. i think back on the opioid issue, the awareness and education of that 33 million patient group to understand how important it is to have readily

available products like naloxone, narcan in particular to that patient group is critically important to saving lives. >> bob, good to talk to you. thank you. bob cramer, soon to be ceo of emergent biosolutions. >> thank you here's what's still ahead on "the exchange. >> coming up -- an exclusive interview with berkshire's warren buffett his take on boeing and the airlines apple. the fed. and this year's monster rally. plus -- the clothing logo is back lyft's pricing gets lifted one airline goes out of business overnight and says you're on your own to its passengers that's ahead in "rapid fire.

welcome back let's catch you up on a few stories that should be on your radar. it's time for rapid fire here with their takes are dom chu, seema mody and robert frank. and let's talk about lyft which is now boosting its target price range for tomorrow's ipo to $70 to $72 a share it would be valued at more than $120 billion at that price

originally it was $62 to $68 a share and jim cramer was saying earlier this would go to 100 depending on what the retail interest and participation is. here's the quote in particular if retail comes in big, as i think it will, you'll see 100 bucks for lyft which lost almost a billion dollars last year. >> we often talk about, every time there's an ipo and every time there's a hypothetical surge, i'm not saying lyft is going to be that way, but every time there is, people always talk about, these ipo companies didn't price effectively their bankers should have told them to price at a higher range. they are right now what's interesting is it's just a notch below where tom white and davidson came out with his price target he made waves by saying it's worth 75 bucks a share only 6% away from there at the midpoint >> we should be clear. there's a difference between saying here's where i think it's going to open based on hype, trading demand and participation. >> where is it going to be six months -- >> look, i don't know where this is going to go, but what i love

is the creation stories behind this tomorrow you've got logan green and john zimmer who started this thing by putting on frog suits at cornell university, handing out pamphlets for a car-sharing ride for spring break and it's evolved. they lucked out with the uber troubles and the amount of stuff they've endured, i just love founder stories. these guys together are going to be worth more than a billion dollars tomorrow >> it's the american dream >> it kicks off a wave of other silicon valley unicorns that will get ready to go public, including uber potentially in later april. >> andrew ross sorkin is going to interview them around 8:20 tomorrow morning i went out to san francisco five years ago or so and talked to lyft about you guys are going to struggle to crack uber's market. this is before a lot of issues with uber. and i give them so much credit it seemed like they were david taking on goliath. but there are some markets where they have won. to go up against an incumbent like that is impress uf. >> not just that

many of the uber drivers and lyft drivers i speak to across the country, they always drive for both they drive for both oftentimes i'm curious when drivers say which they actually prefer given the financials and one being public and one coming on >> let's talk about lululemon. shares hitting an all-time high after a blowout fourth quarter they posted strong earnings and revenue beat same-store sales up 16%. this was the holiday season which helped a lot and the ceo cited men's apparel as its most exciting segment for future growth >> i love this earnings call >> come on, dom. all dying to hear about the pants. >> i am not embroiled in this. this is a long-ruchbing discussion between joe kernen and eamon javers about the appropriateness of wearing men's slacks in our office >> go on the twitter page for "the exchange. you'll see them rocking the navy lululemon pants today. and they look great. >> the high knees exercises.

>> it's amazing. it really is i originally did it for golfing pants but, obviously, guys are doing it for more than -- >> they said men's is their fastest growing category even geographically, a lot of strength in china which now lululemon is joining consumer-driven companies like starbucks and proctor & gamble despite this economic downturn, they're seeing demand in china >> interesting >> the margins, pressures, prices don't seem to be -- they don't seem to discount you had a very female yoga brand go into the men's market which i just said two or three years ago was never going to happen, and they did it. >> i thought they would crack the women's workwear environment better than they did so they won workwear, but for men and they're still working on the women's category incredible quarter staying with the theme of apparel. pbh also on the rise following strong q4 earnings the company's ceo was with jim on "mad money" last night and

explained how sales of tommy hilfiger helped drive their beat >> what really drove the tommy business is the continued connection with the consumer with our marketing and great product execution globally that's really continued. that brand is, for the last two years, has really continued to grow, and it's been a rock star for us >> pvh says it expects tommy hilfiger sales to grow another 6% and strength in europe was interesting. >> lululemon saw strength in china and pvh saw strength in europe sometimes company dynamics can change this showcases the success of bringing on an ambassador like gigi hadid she applies to the gen z shopper. >> we love zendaya >> is she a model? >> model, single, actress. she's got a clothing line very

1970s oriented and they just exploded to make that brand relevant among today's teens is amazing >> so tommy hilfiger is now a hit with teens >> and swimsuits of that red, white and blue variety what's curious is the calvin klein brand is okay. now they're looking to maybe shed it. they're repositioning the whole company to be more focused on the hot brand right now. with portfolios like that you often have to shift to see where those trends go. right now it's tommy hilfiger. >> but not okay to wear those to work >> right budget airline wow shutting down its business overnight. it left passengers stranded after all of its flights were abruptly canceled. an alert on the iceland carrier's website says the airline is ceasing operations and advises them to search for flights elsewhere. i can't remember an airline -- maybe back to the '70s, but for something to happen over night >> to be ready to board your flight and then, we don't exist

anymore. it's not just your flight delayed. there were signs this was not going to work for a long time. $99 to europe from the u.s. was just not sustainable >> too good to be true a business concept perhaps it made a lot of sense at the time but didn't seem sustainable taking these cheap trans-atlantic flights and saying we'll have a 50% or more cut and take you to exotic destinations like reykjavik. >> they cut pricing, they gain a bunch of -- it has to be profitable in the long run >> you would think but there have been all these cliches in the market about how the best way to get $50 out of an investment in an airline is to invest $100 at one point and lose half your investment. so airlines are a commoditized profit >> a good hearted investor should have shot down the plane kitty hawk and -- >> saved investors a lot of money over the years >> it also tells you cheap clients aren't the only thing that matters they care about the loyalty

program, having status and wow air didn't have that >> and not shutting down >> just the basics >> to come full circle now he's a big investor in airlines one of my favorite quotes from charlie munger any year you don't change your mind on something of major importance to you is a wasted year let's hear from the oracle himself. warren buffett is on the stage with becky quick at an event for hands up success >> you look at it as more than just a fun toy or something to aspire to. you watch this as a real way of measuring the economy. you talk all the time about t the -- >> it's distorted in the last week or two by the floods in the midwest and we move a lot of coal, but there are 20-odd categories that the railroad industry reports on for all the

railroads. and winter is always a little bit of a tricky thing. but i would say that it looks like it's slowing down i don't mean it's reversed in course or anything, but it does seem from all of the businesses. but especially, including railroad statistics because they come so fast and they cover such a broad spectrum and it gets distorted by whether people are hurrying up the pacific trade because they're worried about tariffs and all of that sort of thing but i would say that it does look like the pace of increase in the economy has slowed down and i wouldn't call it -- call it somewhere close to noticeably but i wouldn't go beyond that. >> have you seen it broadly? is that when it comes down to commodities, when it comes down to things retailers are ordering, when it comes down to energy, or are there a couple of areas where you see more weakness >> there are these 20-odd categories of autos and -- that

aggregates, you name it, grain almost all of those categories throughout last year were trending strong. and i would say that just looking at those figures but also looking at some other figures. a good many other figures i see on a weekly basis where it looks like things have slowed down and you always have the weather factor but that's the way i am looking at what i see today. that doesn't change anything we do i mean, if there was a flashing red light if there was a blurring red light, we would keep investing the same way we do just look at the railroad in terms of what the situation was in the fall of 2009. it looked like the end of the world and it turned out that was the low quarter was the third quarter. you really want to bet on

america. you listen to that magnificent rendition a few minutes ago, and god has blessed america. >> i don't want to get too wonky on this, but the yield curve when you look at the ten-year versus the three-month has inverted again, this is a pretty important signal it can signal a recession. it has signaled every recession we've seen in the last 50 years, and it's only given an incorrect signal once. it's the first time it's inverted since 2007. do you see a recession on the horizon? >> i just hope i see a lot of recessions i hope i live long enough -- i don't know how many recessions i've lived through i was born august 30th, 1930, and the dow was a little over 250. and it was, by the time i got out of college, there was only one or two days after my birth it had been that high.

i don't know whether i lived through eight recessions or six recessions or you name it, but that's part of -- that's part of a capitalistic system. and we will have them. and it won't change anything berkshire either invests in, in the way of -- it may offer more opportunities, but in -- if we see a good business and everybody in the world is -- the inversion has gone to 100 basis points or whatever, we're going to buy it, and we'll buy it enthusiastically >> the reason i push on this, you've talked an awful lot in the past about high yields that you look at act as gravity on stock prices if you're seeing really low yields that inversely could mean that stocks should trade higher. what do you think at this point? >> the lower interest rates are basically, the better the option stocks are because stocks are going to produce whatever they are over the next 20 or 30 or 40

years. if you buy a 30-year bond you'll get that rate or somebody you transfer to. so the 30-year bond is 2.8 or 2.9, a percent and the federal reserve's intent now is to have 2% a year inflation and you pay tax on the 2.8 or 2.9 that you receive so your net down around 2. you say i'm willing to go with a profitless investment for 30 years. that's never really got my blood -- i don't get excited about that and then when you can buy good businesses that may earn 14%, 15% on tangible equity and they've done it on aggregate from a long, long time and you just think of the difference between good businesses and how they'll compound over time you can start with yields that are higher than the bond gives you, and the odds that those -- with the diversified group that that improves over time. it's a bond with coupons because

that's really all a stock is it's a bond with a whole bunch of coupons that go out to infinity and you just have to print the amount on the coupons yourself you don't know the numbers but one thing you know is the numbers on stocks as a whole are going to be way greater than 2.8% so the lower bond yields go, the lore attractive stocks are as a long-term investment and what it says about the next three months or six months or one year, i don't know, and i really don't care. >> all right let's stick with some of your big -- >> have we lost all the audience now? >> we're going to change the subject. let's talk about some of your big investments. airlines an area that you had sworn off you went back into pretty heavily a few years ago. you own major stakes in american, united, southwest and delta. and the most recent filings it showed that you had bought even more shares in delta i just talked to you a couple

months ago you generally try not to push above 10%. what happened? >> well, that was an interesting situation. delta made an appearance, i don't know, three weeks ago at some investment conference they announced they bought in 26 or 27 million shares and borrowed a billion dollars to do that i like that they brought in 4% of their stock i like the fact they were willing to borrow a billion to accelerate a stock repurchase program. but what i didn't realize was that purchase had taken us over 10%. so i was already in territory that i didn't plan to get. so i just decided to buy a whole lot more stock i mean, once i had been -- once i lost my virginity, essentially, i thought why stop at one

>> does that mean you like delta better than the other airlines at this point? >> no, actually, i accidentally went above 10% >> i do that a lot >> i -- you know, i made an investment in usair in the late 1980s, and i think it was for 380-some million dollars and he said he needed money so i wrote the check and i think before the check had cleared, the money was pretty much gone i mean, it was -- usairways went broke a couple of times subsequently and i tried to sell our interest at 50 cents on the dollar and couldn't do it. unfortunately it had this -- it actually did well so we made money on that airline investment, but the -- if you look at the number of airlines that went broke in this country, if you look at the number of auto manufacturers that went

broke, the capitalism can be rough. it produces good results overall, but it is survival of the fittest. but the airline industry is a very, very competitive business and it will always be a very competitive business i don't think it's a suicidal business anymore but it was for quite a while >> three of the airlines that you own a major stake in also were flying the boeing 737 max and have had to ground those i don't know how closely you've been following along, but what do you think about what you have heard to this point? >> well, i don't think -- obviously, boeing has a lot of work to do very promptly and the airline industry has been so safe i mean, unbelievable we happen to sell insurance also, and the rates went down so far just because the industry is so safe.

obviously, there's a problem with this 737 max. but boeing, you can bet they're staying up 24 hours a day to get it worked out. and that won't change the industry or anything over time airline travel is, you know, it's almost impossible to believe how much that's improved in terms of safety over the last, well, during my lifetime >> let's stick on the themes we've already talked about planes and trains. let's talk about automobiles you also own a stake in gm >> one of the fellows in the office -- >> berkshire hathaway owns a stake in gm. $2.6 billion >> it's around 5% of the company. >> okay. gm has been back in the headlines recently because president trump has been upset and very vocally so with them closing that plant in lordstown,

ohio he's called mary bharra to talk about how he'd like to see the plant reopened or sell it to someone else who can make something, manufacture something there. again, president trump has talked to mary bharra about this have you talked to her >> i haven't talked to her i haven't seen her for a couple of months. actually, we have a lunch date coming up fairly soon, but i think mrry bharra has done a sensational job at general motors that is not an easy job. she came into it and i think she was appearing before a senate committee or something within a very short period of time. and i am a huge admirer of mary and the job she's done at general motors and the auto industry is not a static industry. and if you keep doing everything the same way you did it in that business, if you aren't thinking many years ahead, you are making

a big mistake. and every -- every footprint that an auto company might have had years ago is going to be obsolete at some time and the ones now are going to be obvious let obsolete it's the nature of it. they've offered them jobs, workers at other plants, and i -- capitalism was described as creative destruction and we had probably 15,000 people working at the packing houses many years ago. we don't have them anymore they work at insurance, and, frankly, i'm glad they are it's been good to us so change is part of -- change is part of a capitalistic system and if you don't believe it, you're going to be -- you're going to be doing some very dumb things change has been huge in the rail industry if you look at the safety record in rail of how it's improved,

you know, the efficiency of the operations and that's good for america. good for the shareholders, too, but it's good for america. >> although the people who get left behind in those situations, that leads to the political discontent that we've seen in this country >> they should be. >> and the inequality. what do you do about that? >> what you do in a country with $65,000 of gdp per capita, that's more than six times what it was when i was born here we had a developed economy. and now you have six times what we had then. and you do take care of the people that for one reason or another can become -- it's a terrible term, but it's true -- road kill in an economy. there aren't any textile mills in new england anymore and we had 2,000 employees half of them only spoke

portuguese with our presidency peritosperi take care of people who become, in effect, road kill because of somethin and i'm 100% for free trade. i think it's a benefit to this country enormously and continue to benefit it. but the benefits of free trade are invisible. you don't think about the fact your shoes cost 10% less or underwear or whatever it may be. i mean, benefitting all the time in ways totally invisible. nothing in walmart says you saved 8% because you bought this, other than the american manufacturer this national benefit, unseen, but you ruin the lives, economic lives, of people who are 50 or 55 and they're not going to be retrained or relocate. we've had to issue a factory in

detecti dexter, maine. but they became economic in a world economy and they should, a rich country can take care of those people which follow policies which follow all of us to take care of the relatively few which are dislocated and i think that's the obligation of a rich country >> gm has been looking to the future, trying to find what the future of this industry is going to be and what they've done is to invest in lyft, which is going public tomorrow. the initial price for that just got raised and now values the company around $20 billion in market capitalization based on this new pricing how would you value lyft when they say in the prospectus, not only not profitable, lost almost a billion dollars last year and not sure when they'll be profitable how do you figure that out >> the aggregate valuation,

close to $25 billion or something like that. i certainly wouldn't buy a business for $25 billion i always think in terms of buying the whole business. 100 shares of general motors, we think we're buying the whole business but they've got the billions, 200 million shares out. 35 or something like that. 40 odd billion in the case of gm i look at what i'm getting as a part owner eer of a business ani don't know why, with all the things you can buy for $25 billion in this world that you would pick a business that really has to be earning $2.5 billion or $3 billion tax in three or five years. on the same radar screen as things you can buy right now i've never been a big buyer of, well, haven't bought an initial public offering or i haven't,

charlie hasn't, i think, since 1955 100 shares when they came out. >> what did you buy? >> it was ford motor, gave me 100 shares and i think the statute of limitations expired the only time i've ever done that but i was making $12,000 a year at the time and $500 looked very good to me, but i think there are, i think buying new offerings during hot periods in the market, i don't think it's anything to think about at all >> you have said you've missed out on some of them. should have bought amazon, google a long time ago could this be one of those scenarios? >> what was the last one >> could it be one of those scenarios? >> it always can be. there were a pair of dices at

the desert inn some time ago in a little case, came up 30 times in a row that's a million times a million. 4 billion to one, a little over. so you can go around making dumb bets and win, you know it's not something you want to take as a lifetime policy though and i don't worry about, i worry much more about the things i do than i don't do. i missed all kinds of opportunities in my life, but you just want to make sure that you're on the side of the house rather than bet against the house. >> your biggest holding is apple. $47 billion in apple shares and apple just had a huge event this week it was star studded. people like oprah winfrey and jennifer aniston were there,

reese witherspoon. also unveiled the new streaming services they have news, entertainment. i just wonder, i know you have an ipad. are you going to be downloading any of those things on your ipad >> i'm right up there. here's my phone, incidentally. alexander graham bell lent it to me and i forgot to return it entertainment is a game that's really, i mean, the big players have entered and playing for keeps. and one problem they all have is the, everybody just has two eyeballs and x hours of discretionary time they're going to sleep, they're going to work. so maybe four or five hours a day and two eyeballs and they're using them now and now they're going to have, obviously, there's disruption going on in delivering various things

people are always going to want to watch sports. they're always going to want to watch news, but certain things, they'll want to watch the olympics, of course, how much it's worth to whoever gets it to them but very, very big players that are going to fight for those eyeballs the eyeballs aren't going to double it's a relatively fixed market and when you get the size of certain players, disrupted in an enormous way by netflix which nobody dreamt about ten or so years ago, and see how that comes out. but that's not an easy game to predict. because you have very smart people with lots of resources trying to figure out how to grab another half hour of your time and i would not want to play in that game. it's too tough for me. >> you kind of are it's your biggest investment >> oh, no. apple is a lot more.

i mean, apple, you know, i love to see him succeed that's a company that can afford a mistake or two you don't want to buy stock in the company that has to do everything right should be able to stand a certain amount you run into different things as you get 5,000 feet down or whatever it may be, and there's some businesses that are quite predictable. made lots of mistakes over the years and when i say berkshire, and we had two other companies that sat into berkshire. one was trading stamps that went to zero and started retailing with the department store. which eventually disappeared

you know, you're going to make mistakes you want to recognize them when you do it and you want to basically hang on to your winners. and so i don't, it may just be the fact that i'm, you know, an 88-year-old male i don't look back and think about all my mistakes all the time it would take too long anyway. so apple should do some things that don't work. and marvelous. >> not a huge endorsement. you think this is one of the things >> i don't know. i don't know i know that if i'm bob eggert, going to think about every way i can to beat him to the bunch if i'm at&t, i'm comcast and

obviously, netflix, you know, going to try and make sure that apple doesn't get part of their territory. that is capitalism that's produced, which just think of what dallas, you know, 250 years ago. three lifetimes like mine. less than three lifetimes like mine there wasn't anything here just look around you, as you come from the airport or wherever this is a product of an incredible system. i mean, i get the goose bumps when i hear "god bless america" because this country, in three of my lifetimes, has turned from something that, you know, the french were willing to sell a quarter of it to us and throw in the mineral rights, we'll understand part of the payment for the louisiana purchase, 20% of the

payment was, what was it, $3 million, 200,000 ounces of gold. and we got south dakota. i don't know who made that deal for france so this system is just remarkable and 10 years from now, when we look at the entertainment, it will be what people want. it will be in the form they want it will be, whatever the creativity comes up with and it's going to be a very, very big hotly contested game and i guarantee the public will be the winner. >> let me ask you very quickly apple announced a credit card they're releasing this week. don't even really need the physical card. just do it over your phone does that concern you t