Warren Buffett: The economy works

Shortly after the Dow began its tumble Wednesday, investor Warren Buffett told a packed Long Beach Arena that he has moved 100 percent of his personal portfolio from government securities to stocks.

Buffett, speaking to California first lady Maria Shriver's Women's Conference in Long Beach, said he has no idea what will happen in the coming two years but was confident that over a 10-year span the stock market would outperform cash-based investments, such as certificates of deposits and savings accounts, which can lose value when inflation is subtracted from gains.

Investors have been rushing into the relative security of cash to shield themselves from wild market fluctuations, but the world's most respected investor warned against trying to time the market by pulling out now and jumping back in when indexes begin to rise.

Buffett, whose motto is to be fearful when others are greedy and greedy when others are fearful, said the 20th century saw the Great Depression, two world wars and multiple bear markets, but the Dow still managed to finish more than 10,000 points above where it began.

"This country works," Buffett said to generous applause from an audience of women leaders in government, business, education and other sectors. "It gets gummed up from time to time, the economy, but it works."

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Buffett says he's buying U.S. stocks

(Reuters) - Billionaire investor Warren Buffett is buying U.S. stocks, he wrote in an opinion column in the New York Times.

"A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful," Buffett wrote in the paper.

Buffett acknowledged the economic news was bad, with the financial world in a mess, unemployment rising and business activity faltering.

"What is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up," he said. "So if you wait for the robins, spring will be over."

Buffett, who made his money by building his company Berkshire Hathaway Inc (BRKa.N: Quote, Profile, Research, Stock Buzz)(BRKb.N: Quote, Profile, Research, Stock Buzz) into a $199 billion conglomerate, wrote that investors were right to be wary of highly leveraged entities or businesses in weak competitive positions.

"But fears regarding the long-term prosperity of the nation's many sound companies make no sense," he said.

Buffett said major companies would suffer earnings hiccups, but added they "will be setting new profit records five, 10 and 20 years from now."

Warren Buffett: I Haven't Seen As Much Economic Fear In My Adult Lifetime

Here is a complete transcript of last night's Warren Buffett interview with Charlie Rose, airing on PBS. It was provided to CNBC by the Charlie Rose program.

Charlie Rose:
We are in San Diego, California this afternoon for a conversation with Warren Buffett. He is a man congressional leaders, the administration, and the Federal Reserve want to talk and talk to. He is the legendary chairman and CEO of Berkshire Hathaway. Its success has made him the world's richest man. He's admired for his investment results over a long period of time. He is trusted for his common sense and the fact that he's warned over the years, in his annual letter to stockholders, about some of the things that are contributing to the crisis facing America and the global economy. For all those reasons, we have come to see him in San Diego where he is attending the Fortune Magazine's most powerful women's summit. Later, he will be interviewed at a conference by the Fortune reporter and long time friend, Carol Loomis. We come this evening from the studios of our public television affiliate in San Diego, KPBS. I thank my friend, Warren Buffet, for taking time in a busy schedule to talk to us.

Warren Buffett:
My pleasure, Charlie.

Charlie Rose:
Let me talk of the news of today. You have announced an investment of $3 billion in General Electric, along the same terms as the the Goldman Sachs --

Warren Buffett:
Yeah, almost identical.

Charlie Rose:
Why GE?

Warren Buffett:
Well, I got a call this morning from a friend of mine at Goldman Sachs saying they might be interested in such an investment. I'm familiar with the company. I've known the management, the current management, Jack Welch before Jeff Immelt. I've known him for decades. And so I understand their businesses. We do lot of business with him, and GE has been -- I think it's the longest running stock in the Dow Jones industrial average. It will be 100 years now it will be around. I hope I'm around then, too. And it was an attractive investment. And we have had a lot of money around, over the last two years, and we're seeing things that are attractive now.

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