hi, welcome to "on the money." i am becky quick. a rare interview with the man many call america's greatest investor. >> shouldn't think of buying or selling your stocks every day. >> defying gravity. stocks keep rising. unemployment picks up. what does it mean? the power of the dollar. how money may be able to do what military might can't. why vladamir putin will be watching russia's wallet. and "on the money" starts now. here's news -- we head into a new week.

signs the economy bay wemay wak from its winter slumber. 175,000 jobs created last month. more than predicted. unemployment picked up to 6.7%. number of jobs in two previous months was revised. many expected bad weather to depress numbers. it was mostly blue skies and sunshine for the markets this week after worrying abut ru ini invasion of ukraine. the dow was less than 1% from the all-time record. the markets were mixed friday. cold weather hammered up atow sales last month. gm, ford, toyota fell. chrysler rose 11%. industry hit an annual pace of 15 million sales on track with a year ago. americans worth more than ever. a survey by federal reserve shows assets rose 4% in the last quarter of 2013 to more than $80 trillion. that's largely due to rising

real estate value and increase in the stock market. and if you sthhop at radio shac move fast, closing more than 1,000 stores. after the company reported the 20% drop in sales. more than 4,000 radio shack stores will remain open. the markets want to go higher. unemployment rate ticks up. are we moving away from the big chill in the economy. joining us now, the ceo of simply money advisers, and the equity chief investment officer at capital chief iq. thank you for joining us. >> thank you. >> my pleasure. >> let's talk about the jobs report. better than expected. 175,000. makes you start to think what does this mean about economy. nathan? >> slowly, slowly, slowly, going 20 miles an hour. in a financial school zone. >> going 25 miles an hour. >> feel like you are speeding. >> wind in your hair. getting better.

the weather was clouding everything. as you start to peel away the weather you see, yeah, better economy. service jobs aren't high paying jobs. when income for the average family has gone from $54,000, inflation adjusted to $51,000, 85% of the economy. yeah, okay. going faster. out of the school zone. and, not running over any kids. not what you and i would call dynamic. >> i will give you that. not 300,000 jobs. aaron, starting to get through the weather as an excuse. what does it tell you? >> yeah. most excuses we have seen for 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. we did see definitely decline. but i think other than retail, you know, any industry you wouldn't have to be outside like building houses, other than that, that excuse is done and gone. we had pmi last month. for february. up two points. 53. between the jobs reports coming

in. a lot of economic indicators coming in looking better. only thing that will take lon longer. housing. h higher mortgage rates. how much is weather. how much versus people can't afford the houses? >> let's talk stock prices. we are five years from the market's lows. we have come a long way. hitting new highs. does an of this feel frothy to you, erin? >> i wouldn't say frothy. we are priced for perfection. a term we used. right now trading at 16 times forward earnings for the s & p 500. historically for five years we have been trading at 13, 13 1/2. we are high, by no means a bubble. but, it is priced for perfection. if there are any disappointments we could see a can tractiontrac. >> i worry. people have been sitting out wondering if it is time to get back in. if they sold at the lows, jump

back in. are they buying at the highs? >> no, buying at the upperened -- upper end of okay. you take a look at what people are paying for $1 of profit. price earnings ratio of the stock. almost every part of the market, large cap value, small cap growth, small cap value, mid cap growth. all trading at or above historical pest, with one exception. large cap growth. itfs, ivw would be a great we to get large cap growth. trading at 87% of its p/e, the only sector when you look at any kind of a chart still selling at discount. otherwise selling at fair value. unless, we get revenue. we saw revenue at these company. we have seen great financial engineering with organizations. american businesses played this game fabulous. but we want to see the card. few more chips. >> erin? >> we are seeing greater

revenue. we came in at about, 2% for 2013. est mats are 3.8% revenue growth. there are expectations. they have come down. everyone is in mourning about the weather. we are expecting that revenue growth in for 2013. >> quickly, can't buy s & p index. if we have seen big gains for the market. what would you tell clients right now might be the best performers? >> right now. not going to go by performance. defense for a minute. bond market, three times as big as the the stock market. and 3 1/2 weeks age when the stock market went down, you saw people bail out of etf stock fund and bought bond fund. seen the treasury from 2.6 to 2.8. people are getting hurt in the bond market. you have to short endure racing, nice way of saying, you don't get hurt as interest rates get up. honestly, where the best play is for, an investor on defense. >> your best advice?

>> bottom up. we look for come pans whepanies up, out of favor. a couple, telecom stock, we see, one of our favorites. as well as fossil group. consumer discretionary, trade beg ltrade -- trading below the average. >> up next. on the money. can money do what military might can't? how russia's invasion may be brought down by the power of the al mighty dollar. warren buffett reveals the secret of picking the right stocks. whatat one of the richest men i the world seays about growing your nest egg. ♪

♪ turn around ♪ every now and then i get a little bit hungry ♪ ♪ and there's nothing really good around ♪ ♪ turn around ♪ every now and then i get a little bit tired ♪

♪ of living off the taste of the air ♪ ♪ turn around, barry ♪ finally, i have a manly chocolatey snack ♪ ♪ and fiber so my wife won't give me any more flack ♪ ♪ i finally found the right snack ♪ ♪ the markets cared about russia's invasion for a day. but the military move still has potential to impact the global economy. joining us now to explain, richard haas, president of the council on foreign relations. richard, thank you for being here today. >> thank you for having me. >> so what happened here? was this diplomacy.

military threats against putin, or something the global markets themselves did? >> the global markets did it initially. now with the united states, trying to do, put into place some sanctions. the real question is how much at this point the europeans are prepared to, to go along with, with the french, the germans, brits, are all critical. my own sense is they're going to get very limited support at this point for sanctions. that probably prepared to see the russians stay in crimea. what i think they would be prepared, hopefully would be to jack up sanctions if it looked like the russians are going to try to expand their footprint in ukraine. >> why do you think it is limited support? why the europeans aren't willing to jump on board? >> a philosophical issue. prevalent throughout the cold war. the best way to affect behavior and calculations of moscow. perhaps because the our poonz a -- the europeans are closer, and reticent about a

approximately sepolicy and bank deposits or vulnerable to what it is the russians might do. >> hillary clinton said this reminded her of what happened when germany invaded poland. does this remind you of the same situation? >> no it doesn't. you don't have anything like that set of ambitions here or that kind of ideology. what i think this was about was mr. putin eventually lost the struggle, at least temporarily for the or yen taeientation of government in ukraine. when the president 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 worried that people in moscow would see the set back in kiev and get the idea that he too could be challenged. i don't see this as part of a larger design if you will on europe. >> a lot of people have brought up the idea that, that -- this could be a reflection, or at least, something could have come out of this. a 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 is related along the lines? >> always hard to know what is going on inside the head of a foreign leader particularly one like mr. putin. by and large, no. you have all sorts of soviet challenges. in hungry, '56, or czechoslovakia in '68. georgian challenge when george w. bush was president. i think this is really abut geography, politics, history. russia has always had a special place in ukraine. this is part of being abroad. you have 15, 20% of the people of uf crakraine. ethnic russians, ethnic speaking. it is dangerous if you will to apply historical precedents. >> europe has been reluctant to go along with some of the sanctions against russia. part thought of may be because of reliance on russia for natural gas. is there something that really

pushes the united states to export more natural gas as a result of this? >> absolutely. for so long, u.s. policy toward gas and oil has been seen through a prism or template of our dependence. look over the last couple year, our energy reality has been fundamentally reformed. what we should think about now is energy literally and as a resource, strategic instrument or tool. we ought to be opening up lech lech -- liquefied exports. and the transfer of technology. a country look ukrai like ukrai develop shale. rush yeas sia is no longer a gr power. they have a little military reach. they have oil and gas. the u.s. could dilute comparative advantage if we would change our export policy. i would think this is something the white house and republicans in congress haute to ought to a. >> obviously put pressure on all

of them to get together. what's best case scenario here? what's worst case scenario? how do you think it actually ends? >> best case would be the russians walk it back. this would take some kind of negotiation where they would get a role in the future of uf cr e ukraine's economic orientation. you get protections for ethnic russians. they keep their export through the port. that's become a long shot. the worst alternative if you are the opposite, they would fry to expand their control hoeover lar parts of ukraine. most likely, for the foreseeable future, a version of what we have. they essentially sit on crimea, one way or another becomes autonomo autonomous, gets more into the russian orbit. this becomes newt normal f s th. richard thank you for your time and explaining everything. we appreciate it. >> thank you for having me. >> next, on the money. warren buffett breaks down how

to retire rich. and buying bond isn't at the top of the list. >> most people are 65. they probably have a respectable life span left, 20 years. and i would own equities. good morning nelly! woah. hey! have you ever tried honey nut cheerios? love 'em. neat! now you on the other hand... you need some help. why? look atchya. what is that? you mean my honey wand? [ shouting ] [ splat ] come on. matter of fact. [ rustling ] shirt. shoes. shades. ah! wow! now that voice...

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>> the oracle of omaha, one of the greatest investors. warren buffett sat done to share investing secretsen a rare interview this week. in the past he said you should

be greedy when others are fearful and fearful when others are greedy. what is he feeling now? >> this is between. they're not, you are not seeing a lot of fear. but, except maybe in the -- in a few tech areas, yeah. you have seen, for most of the time, the market is, reasonable. it is just occasionally it gets way out of line one way or the other. >> we have come off of those, incredible lows. when you first called the low. five years ago. >> yeah, you can't calibrate it precisely. i've mean, i don't know exactly what the market should sell for. i know that it shouldn't sell below. but maybe, at the store. or over time the market is going to go higher and higher. in your lifetime you will see number that look in your shareholder letter. for the average investor doesn't know a lot about the market. a good bet. put 90% of what they have into an investment fund.

an s & p, index fund that tracks the s & p, or 10% in bonds. a retirement specialist would say you should be 60/40, stocks, bonds. why 90/10? >> because, the stocks are going to do better than bonds. and, over time. now, if you are bothered by price fluctuations, then maybe you shouldn't own those stocks. i mean if you are the type, that goes into stocks and then, if they're down 20%, it ruins your life in some way and you are going to sell them, you are just not, you are not, psychologically equipped to own stocks. but, there really is practically no risk in owning a diversified group of stocks if you've hold them for a long period of time. there is all kind of risk if you want to hold them for next week. nobody knows what next week will bring. >> as you get close tire retirement does it make sense to put more holdings not bonds?

>> hard to tell abut retiout ret if people retire at 65 they have expectable life span for 20 years. in my own case, my wife will be, 70 or older when i die. and -- and she will have 90% in an s & p 500 no load fund with very low costs. and keep 10% in government, simply so if she need money at any time. and stocks are down. she doesn't have to sell her stocks at the time. >> let's talk about the economy. huge questions as to whether we are so seeing a slowdown across the american economy. you have a great idea what is going on. you have so many businesses you own at berkshire and coca-cola, american express, wells fargo. what is going on? >> what we are seeing, may be affected a little by weather. what we are seeing is the same recovery we have had since fall

of 2009. almost five years. a few percent a year. not bad. not as much as people would like. but there is nothing wrong with that over time. and it has been quite steady. various times people half gotten more optimistic about things. thought it was going to take off. other times they talked about a double dip. right straight through, you have had a steady gain. and i think it continues. >> how concerned are you about rising tensions and the escalating conflict in, in ukraine, with russia, between russia and, and, and, europe and the united states? >> from an economics, obviously, terrible for the people involved. from an economic standpoint. you should keep the farm that you own. keep the apartment house, you own. or keep the little piece of a business that you own through stocks. it has the no effect. i mean, the idea that you would buy or sell an investment, a real investment, something that you hope to hold for ten, 20 years, doesn't produce more and more over time. buy or sell based on headlines is nonsense. >> there were serious concerns

this year about emerging markets. that's kind of what put our stock market into a tizzy. is that right for us to worry about contagion from the markets. >> real currency depreciation. if you have got a wonderful private business. you live in omaha, lincoln, nebraska, you are not going to sell it. because there is a some problem in the market. if you own -- 500 wonderful businesses pretty much, not all wonderful. most of them. own them through the s & p, why in the world should you behave differently. you shouldn't think about big or selling your stocks every day. it's a terrible thing to think about. >> more opportunities here in the united states or around the world now? >> mr. opportuniore opportunity united states. the mother load. we invested $11 billion in plant equipment. 90% 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 bottle tom end of

the scale -- bottom end of the scale not so well. the president brought up raising minimum wage to address inequality. >> i would prefer increasing, the earned income tax. that hits everybody. working in a significant way. improving their income. no question inequality has the widened out. now the rich and rich because the poor are poor. it doesn't work that way. but -- this country has the gotten richer and richer, the forbes 400 had $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 whol le lot of people in the economy aren't doing well. the earned income tax credit, significant would benefit a lot of people who deserve some benefits. >> why did warren buffett's measure of berkshire hath way's performance lag the s & p 500.

his answer when we come back. as we take a break, look at how the stock market ended the week. [ male announcer ] pillsbury crescents -- awesome.

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twitter@onthemoney. the oracle of omaha admit heed doesn't always get it right. despite record profits for 2013, the berkshire underperformed the s & p performance and the index for the last five years. warren buff xet plaiett explain is tough off to beat the s & p 500 in high times. >> we always do better in markets that are moving up moderately or we do in markets that move up a lot. there has been one year in the last 49 when the markets -- were, were well, any, any year, that we have fell short. the markets were up 15% or more, except for one year. so we just don't do well, we, we, like to have one bthe head r than the tail wind. would look to thank warren bi . buffe buffett. monday, see if mcdonald's bounced back. monday is target'sline to

submit documents to congress. and rupert murdoch will celebrate his 83rd birthday. wednesday, the worldwide web, turns 25 years old. retail sales are due. and friday, consumer price index out for february. that's the show. i'm becky quick. thank you for joining us. my guest next week, businessman, jack welch on the economy, markets and state of am can buo american business. each week keep it here, we're "on the money." and i will see you next weekend! [ yodeling plays ] worst morning ever. [ angelic music plays ] ♪

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♪ you're watching an nbc bay area news special. tonight "class action". >> we are coming to class watching youtube videos or coloring. >> a student at the center of a lawsuit speaks out about a teacher not doing her job. >> coloring in eighth grade. it's ridiculous. >> the high-profile trial over job protections for teachers. >> the issue is not how do we get rid of bad teachers. the issue isc0ñ how do we get m funding? >> the new president of uc responds to her critics. >> the fundamental problem is not me. >> frank talk about the immigration debate from janet