Buffett's sound bite fears

His annual letter to shareholders should be required reading for anyone wanting to own, manage or report on a business. In this year's missive he laments on a line he wrote in 2009:

"We are certain, for example, that the economy will be in shambles throughout 2009 - and probably well beyond - but that conclusion does not tell us whether the market will rise or fall."

A number of news organizations reported the first part of that sentence without making mention of the second part, what Buffett regards as "terrible journalism."

Misinformed readers or viewers may well have thought that Charlie [Munger] and I were forecasting bad things for the stock market, though we had not only in that sentence, but also elsewhere, made it clear we weren't predicting the market at all.

As it turned out, the Dow closed the day of the letter at 7,063 and finished the year at 10,428. "You can understand why I prefer that our communications with you remain as direct and unabridged as possible," he writes. Besides his annual letter, CNBC has been one of his favored outlets, probably because he gets such a huge response from viewers and because the financial network gives him so much time to say whatever he wants. He's been on for much of the morning with Becky Quick.

QUICK: Another viewer had written in, and I don't have the e-mail here right now, but another viewer had written in and said, `What do you do when you and Charlie disagree fundamentally on a point? How do you make that decision?'

BUFFETT: Well, what Charlie always says to me is he's--when we disagree--he says, "Well, Warren," he says, "you'll see it my way because you're smart and I'm right." That's his technique. But pretty much in--if we really disagree on something, we're not going to do it. But if I like something, he just grumbles and mumbles and, you know, says, "That's kind of a dumb idea," where I go ahead and do it.

QUICK: What's the last thing that you disagreed on fundamentally so much that you didn't do it?

BUFFETT: Hm, there have been some like that. I can't pick them right out of the air at the moment. Certainly nothing in the last six months or I would recall it.

Charlie Munger is vice chairman of Berkshire Hathaway and has been Buffett's partner for decades. Munger, who is based in L.A. and will invest in properties separately from Buffett, rarely talks to the press. Unlike Buffett, Munger is the kind of guy who probably had a curmudgeonly streak in grade school. Last week, he wrote a piece for Slate that was gloomily titled, "Basically, It's Over." "Charlie's more pessimistic than I am," Buffett said this morning.