Warren Buffett Finances Mars-Wrigley Deal: The Complete CNBC Interview

Warren Buffett spoke live this morning (Monday) with CNBC's Squawk Box about his role in today's $23 billion Mars acquisition of Wrigley.

Here is the complete interview

Transcript: Wal-Mart’s Lee Scott

Lee Scott, chief executive officer of Wal-Mart since 2000, spoke to Jonathan Birchall, the FT’s US retail correspondent, about the state of the world’s largest retailer.

Here is an edited transcript of the interview.

Betting on a Market

Few start-ups will have emerged better from the dotcom meltdown than Betfair. Launched in 2000 by Britons Andrew "Bert" Black and Edward Wray, the London-based online betting exchange has since grown into the world's largest. Rather than play house, Betfair matches bettors with odds offered by other users, its whizzy technology handling some 300 wagers a second. The small cut the firm takes from the bettors' winnings these days adds up to big profits: Betfair pocketed $39 million in net earnings last year. And in refusing wagers from the U.S. [EM] where online gambling is outlawed [EM] Betfair has dodged a recent clampdown on rival Internet operators. Here is their story, as told to TIME's Adam Smith.

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Looking Up to Warren Buffett

IT OFTEN SEEMS like every hedge-fund manager is reading from the same playbook about how to look, work and behave. Neatly pressed khakis; thumbs glued to a BlackBerry; slick digs in Greenwich or Manhattan staffed by number-crunching research drones. But apparently, Mohnish Pabrai never got his copy. He wears shorts to his Southern California office, keeps e-mail to a minimum and almost never misses his 4 p.m. nap. And forget goosing returns with fancy computer models or using complex derivatives: Pabrai doesn't even sell stocks short.

The Interview

Lessons from the Best-Ever Hedge Fund Manager

That person was of the great Munehisa Honma who managed a long/short commodities hedge fund during the 18th century. His house is well designed and much larger than most hedge fund managers, but his book "Fountain of Gold" is brilliant. Probably the best investment book ever written. His trading ability enabled the Honma family to go on to become the largest land owner in Japan for over a century. In today's money, his likely net worth was much more than $100 billion. Some years he would have "taken home" the equivalent of $10 billion so it is curious that there are those excited about John Paulson's "record" pay of $3 billion; fair compensation for the $12 billion absolute alpha he generated for investors that they would not otherwise have.

But Honma's returns were higher. Back in 1755 he knew that it was psychology and the irrational actions of market participants, not economic logic that drove markets. The study of behavioral finance isn't new, it's over 253 years old. Also he didn't buy and hold rice and wait to be compensated for its high risk. He did not "expect" a commodity risk premium. And even though rice futures were heavily traded and analyzed back then, the liquidity did not produce an efficient market. Like good traders today, he worked out that if he worked hard to develop competitive informational and analytical advantages, he could extract absolute alpha out of other rice traders, regardless of whether rice prices themselves were rising or falling.

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On Munehisa Honma(Homma)

Homma ran the family rice trading business and rice was the lifeblood of Japan. More than a food, rice was a culture, Rice growing villages lived their whole lives around the rice planting, growing and harvesting cycle. Various parts of this cycle were celebrated with festivals and formal ceremonies. Rice was a precious commodity. Rice was more than a commodity; rice was a culture central to Japanese life. From rice came Sake the famous Japanese rice wine, rice cakes, rice flour, rice vinegar and much more. The rice plant produced not only its precious grains but a large amount of lush green foliage which when dry became straw. Rice straw too was an essential part of Japanese life. From straw, traditional villagers in the north made hats, clothes, utensils and the exquisitely fine rice paper. They made important religious figures, masks, decorations and a hundred other everyday items

From Socrates to Soros

CRISIS breeds opportunity, as the bottom-fishers starting to circle beaten-up mortgage bonds and leveraged loans can attest. For George Soros it offers a chance of a different sort: to revive his favourite intellectual theory. In his latest book, “The New Paradigm for Financial Markets”, published on April 3rd, he sets out to illuminate the credit crunch through the prism of “reflexivity.”

The theory draws on thoughts first developed in his 1988 bestseller, “The Alchemy of Finance”, which was itself influenced by the work of Karl Popper, one of Mr Soros’s philosophical heroes. Essentially, it says that financial markets have built-in biases which have an impact not only on prices but also, in extreme times, the fundamentals themselves. In such moments, market events affect as well as reflect supply and demand.

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What Warren thinks...

In early April the megabillionaire hosted 150 students from the University of Pennsylvania's Wharton School (which Buffett attended) and offered Fortune the rare opportunity to sit in as he expounded on everything from the Bear Stearns (BSC, Fortune 500) bailout to the prognosis for the economy to whether he'd rather be CEO of GE (GE, Fortune 500) - or a paperboy. What follows are edited excerpts from his question-and-answer session with the students, his lunchtime chat with the Whartonites over chicken parmigiana at Piccolo Pete's, and an interview with Fortune in his office.

Buffett began by welcoming the students with an array of Coca-Cola products. ("Berkshire owns a little over 8% of Coke, so we get the profit on one out of 12 cans. I don't care whether you drink it, but just open the cans, if you will.") He then plunged into weightier matters:

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Sex and Financial Risk Linked in Brain

A new brain-scan study may help explain what's going on in the minds of financial titans when they take risky monetary gambles — sex. When young men were shown erotic pictures, they were more likely to make a larger financial gamble than if they were shown a picture of something scary, such a snake, or something neutral, such as a stapler, university researchers reported.

The arousing pictures lit up the same part of the brain that lights up when financial risks are taken.

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