Even as stock indexes hit all-time highs, Warren Buffett predicts they'll go "far higher" in the long run.
In a live appearance on CNBC's Squawk Box, Buffett told Becky Quick, "You'll see numbers a lot higher than this in your lifetime."
Acknowledging that milestones like Dow 15,000 can draw Main Street's attention to stocks, Buffett said people should pay more attention when indexes cross those milestones on the way down because that's when stocks are "cheaper" and more attractive to buy.
There could be a pullback for stocks at any time, Buffett said, advising against attempts to time the market. "People pay way too much attention to the short term."
Buffett said that bonds are a "terrible" investment right now because they are "priced artificially" and could lose people a lot of money when interest rates start to rise.
Stocks, he said, are higher but not "ridiculously higher," While he has bought bonds in the past under different circumstances, he generally prefers "productive" assets to fixed-income investments.
But he also said there are times when it makes sense to separate the roles. He also thinks directors should spend some time talking without the CEO present, recalling that he's been on one board where "a lot of change happened" after the CEO left the room.
Buffett said each year when the Berkshire board meets, he gives them a chance to talk without him there.
Buffett said he sees no major changes for the U.S. economy over the past four years. It continues to show "gradual improvement ... moving forward, but at a slow pace." "Demand has come back, but slowly." He does see some improvement in housing.
He called Federal Reserve Chairman Ben Bernanke a "gutsy guy" who has done "very, very well" keeping the economy on the right track. Buffett did concede he might have lifted his foot off the "accelerator pedal" earlier, but he's not sure how to do that.
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