US investment tycoon Warren Buffet said Monday that he had put 1.4 billion euros ($1.9 billion) into European stocks at the end of 2011, calling shares in good companies in Europe cheap. In a rare foray outside the US market, the mega-billionaire's Berkshire Hathaway investment group bought 175 million euros worth of shares in each of eight EU companies, which he declined to name.
"I just thought these eight companies were terrific companies that were cheap," he told CNBC television. "They obviously were affected by the European crisis. In the end those eight companies I bought are going to be there 5,10, 20, 50 years from now." He admitted he did not know the companies as well as well as Berkshire's huge investments like American Express or Wells Fargo.
"But I know them well enough... These companies will do fine whatever happens in Europe. And there will probably be plenty that happens in Europe." Buffett, ranked number three last year on Forbes' list of the world's wealthiest men, has a fortune estimated at $39 billion built on the investment success of Berkshire, which he founded and still actively runs at 81.
Berkshire has mostly confined its investments to US companies, so the push into European stocks is a new tack for Berkshire. Buffett said that even after the runups in stockmarkets over the past year, he still viewed stocks in the United States and elsewhere as better valued compared to other investments. "You have to invest in something... Equities are still cheap relative to any other asset class."
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