Buffett says stocks, homes are fairly cheap now

Billionaire Warren Buffett says stocks remain relatively cheap compared to other investments right now, and the economy continues to improve slowly.

The head of Berkshire Hathaway appeared on a business news channels today to take questions about his annual letter to the conglomerate's shareholders. The letter was released Saturday.

Buffett says he believes stocks will perform better than bonds, gold or any other investment option over time. He says stocks still appear relatively cheap even after prices have improved.

He says single-family homes are also really cheap. He says if he were handy and could easily buy large numbers of homes, he might invest in them.

Buffett conceded in his letter that he was dead wrong to predict the housing market would recover by now. He said today that he believes conditions will improve in 2012.

Buffett conceded in his letter that he was dead wrong to predict the housing market would recover by now. He said that he believes conditions will improve in 2012.

Buffett also said that Berkshire Hathaway's plan to replace him eventually hasn't really changed. He said the new language he used to describe the succession plan in his annual letter to Berkshire shareholders wasn't a sign of change. The 81-year-old says he was trying to clarify the plan.

Buffett said the chosen successor as chief executive officer of Berkshire Hathaway does not know he has been chosen for the role. The board has a name in mind and has had for years now, he added.

In his letter released on Saturday, Buffett said Berkshire's board had chosen someone to succeed him as CEO someday, and it has two backup candidates.

Previously, he had said only that the company had three internal candidates. None of them have been identified. He says last year's departure of a top executive, David Sokol, did not affect the board's choice for successor.