Stock picking should be for long term: Warren Buffett

Excerpts from Power Breakfast on CNBC-TV18 Watch the full show » ALSO READ See what other experts are saying about markets See what FIIs are saying about the markets See what Udayan Mukherjee is saying about the markets

Warren Buffett, Chairman and CEO, Berkshire advised that one should decide whether to buy or sell stocks based on how much one is getting for investment. He said that the criteria for picking stock should be keeping in mind the long term money one is expecting at any given time.

He warned that it is a terrible mistake to look at what is going on in the economy today and then decide whether to buy or sell stocks based on it.

Buffet shared his views on his expectations of the market and the role of the US Government in financial crisis management.

Below is the verbatim transcript of his comments on CNBC-TV18.

Look at 1954, we were in a recession at that time. The recession started in July of 1953, unemployment peaked in September of 1954, so till November 1954 you hadn't seen an uptake in the unemployment rate and the unemployment figure doubled during that period.

It was the best year that was for the mkt. So its a terrible mistake to look at what is going on in the economy today and then decide whether to buy or sell stocks based on it. You should decide whether to buy or sell stocks based on how much you are getting for your money, long term money you are getting for your money at any given time.

Next week doesn't make any difference because next week its going to be a week further away and the important thing is to have the right long term outlook evaluate the businesses you are buying and then a terrible market or a terrible economy is your friend.

The whole world wanted deleverage and they were deleveraging under conditions of extreme hasted and guns in their head in some cases. The only way they could possibly leverage up at the same time everyone wanted deleveraging was the Fed govt.

When USD 200 billion money flowed out in the money market funds in a couple of days only the Fed could act and fortunately we had the people there who recognized that and acted promptly.

The government  had a huge role and now going forward its a very tricky thing to figure out how to prevent excessive leverage, how to prevent off balance sheet arrangements from getting into trouble or just having people at the top of major institutions that run a risk they shouldn't be running.