Good morning. Gawk to squawk alley. We are watching new highs early this morning. Before we settle in to yet another tight range. Tenyear the highest since april 10th. Apple, ibm, and google dominating the conversation betwe. Becky is standing by in omaha with the latest. Good to see all i dont haof morning. An amazing amount of Technology Talk and again this morning with Warren Buffett. Its fascinating because this is a guy who claims he is not a technology guy. In fact, doesnt even own a smart phone even though he owns a big stake in apple. He talked about a lot of technology names, and when he starts talking about them, we listen. He went on and on about jeff bezos, how he started to incredible hes had two incredible bids in two different industries. He doesnt think theres another manager like that. He went on and on about amazon and bezos and how great things are. But at the end of the day, buffett doesnt own amazon. Why dont you buy shares of amazon . Stupidity. I was impressed with jeff early. I never thought he could pull off what we did, and whats really i mean, i thought hed pull off something, but on the scale thats happened, i mean, its changed your behavior. Its changed everybody in the offices behavior. And the remarkable thing about jeff and everything else, is hes done it in two industries almost simultaneously that dont have that much connection. Buffett also spoke candidly about google and how its another opportunity he and Charlie Munger missed. Its funny. They actually said they should have seen this one coming. They said they had a good insight into it because of what geico was going. They were using it for advertising early on. He said it mazed him when he realized what they were paying a click years ago, 10 or 11 a click for every person that clicked on a ad. He said when you have zero cost as a company for providing that, somebody clicks, you charge them 10, you compare it to a Cash Register that prints out money. He said he met with people who came to visit with him. He said he should have had better incite into these r those issues. We asked him if he likes google so much, how come he doesnt own the stock now . If i was forced to buy it or short it, i would buy it, same as amazon, but its hard to buy. Psychologically its harder if you looked in the first place and passed at x to buy it at 10 x. Thats cost a lot of people at berkshire. They saw the lower price, they said if it gets back there, ill buy it. Thats a terrible way to think. He said if he was faced with the decision of either having to buy the stock or short the stock, he would buy it. Both in the case of google and in the case of amazon, but i think this really shows at evolution of his thinking for a guy who claims hes not a technology investor, we see how hes evaluating the companies and finding ways to evaluate the Companies Based on what he knows and how hes valued stocks for a long time. Thats a fascinating answer he gave you as to whether or not he would be forced to buy it or short it. Were going to talk about this a bit. Its good to see becky working hard in omaha. All of these mea culpa from buffetts are happening as ai, and cloud, and machine mobilities are things with toss around with ease. Yeah. Weve been trying to get Warren Buffett to code in all of events. One time i got him on the phone. He said i dont like tech stocks and i dont understand ek technology. It was interesting. I guess thats the situation. He made a mistake. Thats hard to say about Warren Buffett. I always thought he sort of missed all the Technology Stocks because it wasnt comfortable with him, and he liked to stick in media but not in the stuff that was changing the way we consume media and other things like that. Although, a guest in our last hour reminded us that the name of the company, Berkshire Hathaway are old textile makers he dumped a long time ago. Seeing where that era was headed. What does this say about his interests now and how tech fits into our Overall Economic being . I always thought it was a miss to him to think this way and not being part of the conversation because hes so smart about things like that. I think it says he understands whats happening even Going Forward is going its interesting hes not buying stock now. Bezos is in the middle of automation and robotics. The companies will be big players Going Forward of where computing is going. He said they were too high now, and then he followed it by saying thats a bad way to think. It would be interesting if he moves into the stocks now given the trends and where they are with relation to the trends that are coming. They have strong positions both google and amazon. Have you seen anything like that, mike . My overall take away is how bad he is as a tech investor. Not only was he scared of it, but he has basically inside information. He has praise for bezos and still isnt investing. Are there investors who are great in one area and bad in another. I think there are so many lessons captured in what you said. One of them is buffett is one of the few guys who will accent yut how stupid he was. When you see the Companies Worth 450 billion like amazon and alphabet, theres a sense it was inevitable and looking back, anybody should have been able to see it in 97. Guess what. Along the way the stock was down 90 high to low at one point. You didnt know all along the way. Part of being Warren Buffett is not having to short or buy. You wait for your fat pitch and take a swing. He said apple doesnt have to be doing anything different to be worth more than it is today in terms of what the share price represented. I think if you looked at google, you said its a great company. Theyre kind of getting credit for it already. He did say the beauty of bezos is a business lesson he waited for payments to get perfected and the internet to get perfected and waited for transportation lo jestics to get pfrted and then moved in after others spent trillions on kapt tall investment. Hard to know if hell have that patience on mobility. He just missed tech. Its pretty basic. Its been a very important and transformative part of the economy. He didnt bet on the winners which is something he tends to do. I think probably he regrets doing that. One of the things that was interesting is i think he said he misjudged the ability of bezos to pull it off. That was his biggest issue. He thought there were hard challenges and he couldnt pull it off and he did. A lot of people doubted jeff e bezos when he wasnt making profits. You remember when they were c l called amazon. Bomb years ago. He probably should have focussed on tech more. We tried to get him to come to code. He said i dont get tech. I dont like the business. I was like its kind of big. We talked to his people all the time. It was interesting. It was a resistance to looking at something. I could see why looking back you would do that. Because the prices. But even now amazon and alphabet have big bets in ia and automation. I think those are two dbig area Going Forward. They are pricey, but you have to wonder who is going to own the next part of the computing product. Its not like he doesnt have any exposure. He owns apple and ibm. We can glean something from both of these investments if youre looking at the buybacks. Youre getting ramped up again at apple, whether its a Consumer Products company. Talked about watson as an ai play. You can glean miss tech incite there. And effectively, i think it was a bet on his part both on the fact that the stocks were cheaper than most of the largest leading tech stocks. To maybe it made more sense. His comments about the firm Pricing Power of apple and iphone reflects that. He views it not so much as an innovation machine but as a company that everybody is willing to pay up for. Thats different. By his admission, miscalculated that company. Speaking of the pc market, gates was at the table with buffett and munger this morning. Lets take a listen. I dont think that the success of the Technology Sector will be improved by some tax change. The Tech Companies are not starving right now, and it only comes up when you have profits and these companies have very high profits. Its not like were going to be stronger in the tech sector by making owners of those stocks richer. Interesting discussion. Munger did say he thought repatriation would bear some fruit. Yeah. I need to digest with bill gates said. It seems to be pushing against what the market is expecting right now. Were always talking about okay, you did this tax plan, tax cuts, whether its just an entirely rearchitecting of the tax system, its great. He says doesnt really matter. If it doesnt matter, then what ought the stocks be doing and is there a possibility that in some way its a negative, because its better for other stocks than it is for tech . I think what gates is saying is it might be good for tech knock investors. Tech as a business maybe not. Theyre not capital constraint. Apple has not needed for cheap money. Now to washington d. C. Were getting the breaking news on mike flynn. Theres exclusive reporting from nbc news that president obama had warned President Trump against hiring Michael Flynn as his National Security adviser. Thats according to three Obama Administration officials talking to nbc news. This morning apparently came less than 48 hours after the november election. The two sat down for about 90 minutes in the oval office when president obama delivered that advice to President Trump. And, of course, these revelations come on a day when former acting attorney general sally yates is scheduled to testify before congress. We have reached out to the Trump Administration. They have not yet responded to this reporting by nbc news, but were following the testimony from sally yates later on today. Back to you. Just to clarify, its important, because the Trump Administration has been putting it on obama for vetting flynn and letting his qualifications past. Reporter this is the first we know of the warning. And now flynn has raised a host of problems for the administration. Now were seeing there were warning signs early on. Well come back to you for more on that. Care ra, mike, our thanks to you. Great discussion about buffett and technology to start the hour. When we come back, big news from dell as it looks to develop the next generation of Cloud Computing technology to help Companies Like snap chat. John sat down with dell. And more from warren wubuffett interview. Dow is down 23. Squawk alley is back in a minute. Anybody that prefers bond to stocks is making a big mistake. Ive been saying that year after year. Stocks will bounce around a lot more. They can go down 50 , but a 30year bond can go down 50 at these rates. Bonds are a terrible choice against stocks. Be flexible and productive. Then cdw orchestrated a collaboration solution for us. Using the lenovo x1 carbon. Powered by intel core processor technology. Now we can access our network and Work Together from anywhere. Hey hey everybody. You coming back for the Team Building . Mobility by lenovo. No . It orchestration by cdw. Your insurance on time. Tap one little bumper, and up go your rates. What good is having insurance if you get punished for using it . News flash nobodys perfect. For drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. Switch and you could save 509 on auto insurance. Call for a free quote today. Liberty stands with you™ Liberty Mutual insurance. The shlike a bald penguin. How do i look . [ laughing ] show me the Billboard Music awards. Show me top artist. Show me the top hot 100 artist. They give awards for being hot and 100 years old . Well take 2 [ laughing ] xfinity x1 gives you exclusive access to the best of the Billboard Music awards just by using your voice. The Billboard Music awards. Sunday, may 21st eight seven central only on abc. Dell technologies this morning kicking off the annual dell emc world conference with announcements. New high bid cloud stuff. Theres a deal with sales force for servers and storage. Dell is going to sell them a bunch of laptops. The biggest news, dell has a new way to sell real stuff thats a shot across the bow at the public cloud providers like amazon, google, microsoft. Dell is willing to put its physical equipment in your data center but only charge you for what you actually use. You get the advantages of having the hardware close to you which some customers still want for regulatory reasons. I sat down with the companys founder and ceo at dell Head Quarters in texas to talk about the companys plan for Cloud Services in the future for dell technologies. Take a listen. I dont want this to come across as were antipublic cloud. Sure, you sell them a lot of stuff. Exactly. And we have partnerships with many if not all the public cloud providers, but we believe theres an appropriate workload for those environments, and when you modernize and automate the some premise systems for the predictable part of the work lode, im going to say thats 85 to 90 for most organizations, youll find the on premise systems are competitive. Weve seen a bit of a boomerang effect. Customers have run to the public cloud and say, wait a second. This is more expensive. And theres also a bit of a lock in. The public clouds have created a developer environment thats really easy. And they want you to use their database and all their developer tools. Now, with pivotal, we have a cloud neutral developer ready platform, and across dell technologies, developer ready infrastructure. You can develop the apps, run them in any public cloud you want, and also run them on premise. Drop box is one of the ones that went to the public cloud and then came out. Well, you actually see this with almost every leading software as a service company. What they figured out is that its actually too expensive to be the public cloud, because the operating costs of the infrastructure itself is too large of a cost relative to their overall pnl, and so what do you think when you see snap . Theyre going to spend 2 billion in google over five years. We could save them some money. Its not that hard. The math is not that hard. And so what i would tell you is is a for the predictable portion of their workload, now, how much is there ill say 80 is probably predictable. But a i. T. Person that stands up today and says hey, were going cloud first, and everything is public cloud, i would not be surprised if in about two years they find themselves uncompetitive. This is kind of a bold argument that michael dell is making here. Basically if you know how much Computing Power you need, you know how much storage, et cetera, youre better off owning it than renting it from amazon from microsoft, from google, and not only that. Hes putting dells money where he is mouth is saying well ship you the equipment before you pay. Put it in your data center or in the only pay for what you use. Theres pricing differences depending on how much you tell them your base load is. If you want to start off not paying for that much, then your per use rate is higher. But this is something that dell can uniquely probably do because its private, because its a big financing, but a challenge to whats become conventional wisdom about cloud is cheaper. And with snaps results wednesday, we might get more insight on whether they can continue to keep paying bills like this. Thats a big bill, basically 20 pl over the five years. I dont know what kind of out clauses there are, but looking at players like that for at least four out of five of your compute cycles, youre better off with us than the public cloud. We dont hear from him that often. Its a reminder because its a private company just how much hes transforming into cloud. How big of a chunk of their business is it now . Its a growing chunk. A lot of dell emcs results are public, because of the tracking stock and the way they have things structured. Theyre still losing some money, but he says theyre doing it strategically and growing their share and milking the pc and server and storage businesses. Like secure works, security stuff, rsa. You have more from dell coming up . Yeah. We talked at trump, manufacturing. Thats coming up. Also keep in mind the 2017 Investment Conference is underway this morning. Keynote speakers include David Einhorn and many more, plus unrest on frances streets following the macron victory. At fidelity, trades are now just 4. 95. We cut the price of trades to give investors even more value. And at 4. 95, you can trade with a clear advantage. Fidelity, where smarter investors will always be. To be a nightmare does nobody like the future . Cmon, the future. He obviously doesnt know intel is helping power Autonomous Cars and the 5g network they connect to. With this, wont happen in the future. Thanks, jim. Theres some napkins in the glovebox. Okay, but why would i need a napkin . You could have just told me a bump was coming. We know the future. Because were building it. David einhorn and other big names taking the stage at the Investment Conference. Leslie picker is there with the latest. Reporter i just came from the next wave presentations. Those are for the up and coming fund managers. The guys that want to be on the stage that bill ackman is on. We heard some pretty interesting picks from these guys this morning. Some market movements already. One from david thomas. He is recommending a long in a Company