Warren Buffett's conglomerate Berkshire Hathaway Inc has begun its share buybacks, Buffett said on Friday, but the repurchases will not stop the company from also making acquisitions or spending on infrastructure for its portfolio of companies.
Buffett, in a CNBC interview from the floor of the New York Stock Exchange, also said Berkshire has bought a net $4 billion of common stock on the market in the third quarter as deep declines presented opportunities to invest cheaply.
Berkshire stunned the market earlier this week with the buyback program. The company said it would pay up to 10 percent more than book value for shares. Investors said the program meant Berkshire was probably undervalued by 30 percent or more.
Buffett said the paperwork to start the buybacks was completed Thursday. Berkshire Class A shares fell 1.1 percent to $108,000 in morning trade on Friday, in line with broader market declines, though the stock is still up sharply from the pre-buyback levels of late last week.
While Berkshire said it could spend heavily on shares, Buffett said on Friday the company will still make acquisitions and will end up spending $7 billion this year on plant and equipment for its portfolio of companies.
As he has all year long, he said such investments were a bet on the economic strength of the United States.
It's very, very unlikely we'll go back into a recession, Buffett said.
(Reporting by Ben Berkowitz in New York; editing by John Wallace)