Buffett Says No to Corporate Bonds

Current yields are too low, says Berkshire Hathaway chairman.

Warren Buffett, the billionaire chairman and chief executive officer of Berkshire Hathaway Inc., said he isn’t investing in corporate debt, including Apple Inc.’s record offering, because yields are too low.

“We’re not buying corporate bonds of any kind now,” Buffett, 82, said Saturday during an interview with Bloomberg Television’s Betty Liu in Omaha, Nebraska, where Berkshire held its annual meeting. “Not at those yields.”

Berkshire held $12.2 billion of corporate bonds as of March 31, according to a quarterly filing issued on May 3. That’s down 14 percent from two years earlier. The value of Berkshire’s equity portfolio climbed 54 percent to $97.2 billion in the two years ended March 31 as markets rallied and Buffett added shares of International Business Machines Corp.

‘Brutal’ Problem

The Fed has held its target interest rate for overnight loans among banks between zero and 0.25 percent since December 2008 and is buying $85 billion of bonds a month. Buffett said Saturday during a question-and-answer session at the annual meeting that he pities people who have “clung to fixed-dollar investments.”

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