Liz Claman: Smart Money

The Fox Business Network reporter talks with us about managing your money, her relationship with Warren Buffett and how to invest like a billionaire.

Managing Money
Reporter Liz Claman during one of her many interviews with billionaire Warren Buffett.
Photo courtesy of Fox Business Network

Liz Claman knows how to take care of business. The veteran reporter and Edgewater resident has been behind the desk at Fox Business Network since 2007. Notably, Claman was the first reporter to interview billionaire Warren Buffett. Since their first sit down, Claman and the business magnate have built a relationship. On Monday, May 4, Claman will interview Buffett for the 38th time at the Berkshire Hathaway Annual Shareholder meeting in Omaha. She spoke with us about making smart financial decisions, and how to invest like a billionaire.

NJM: Tell me about your relationship with Warren Buffett.
Liz Claman: I picked up the phone one day while working at CNBC years ago. Simply called him. Everyone said, “He’ll never talk. He doesn’t do interviews.” My co-worker Charlie Gasparino always likes to say real reporters ‘pick up the phone’ and work it. That’s what I did. I gave him several ideas of what we could do. He rejected all of them until I said, “Why don’t I come to Omaha and you can tell me how you really value a business. Show me some of the ones that you bought that you’re most proud of.” We flew out there and spent the whole day with him.  Since then he’s allowed me very generous access.  He knows though that he’ll never get a free ride. I always try to hit him with some tough questions every time.

NJM: What was the best piece of financial advice you’ve ever received?
LC: My father used to always say, “Never live beyond your means.” This from a man who came from extreme poverty and ended up being a world-renowned surgeon. Because he invested and saved, he put all five of us through college and paid for 6 weddings. Four daughters, two of whom got divorced and then remarried! Clearly he managed his life and money well!

NJM: How can a typical NJ resident invest like a billionaire?
LC: New Jersey folks should invest no differently than anyone else. Take a fixed amount of money monthly and invest in solid companies with great products and smart management. Over time, great American businesses will grown and give you returns, especially if they pay dividends.

NJM: What advice would you give to millennials who want to invest but have less wages to do so?
LC: If your employer offers a matching 401k, definitely commit as much as you can stand from your monthly paycheck.  Auto-debit is a beautiful thing: after the first few months of pain, you barely feel it.  Before you know it, you’re getting an annual raise.  Try to take a portion of that raise and add it to the 401k.  Over time, you’ll have a nice golden chunk to retire on.

NJM: At what point in your career should you start taking more risks with your money?
LC: If you can stand to lose what you risk, then it means you can take a few more chances on buying good companies going through bad times. That’s the Buffett way.  Buy when others are fearful.

NJM: What’s the weirdest investment you’ve heard of that surprisingly paid off?
LC: Shorting subprime mortgages.  I have a friend who in 2005, at the height of the housing bubble insanity, took me to lunch and said, “Liz, the whole thing is gonna blow up. I’m betting against chunks of mortgages I think are going to implode. People won’t be able to pay their mortgages. They’ll foreclose. This will happen on a massive scale.”  He was talking about sub-prime mortgages which very few people were questioning.  I remember leaving that lunch, going home and paying off a home equity line of credit on which I owed a small amount. He scared me. Because of his trade, he’s a multi-millionaire today.  There’s always the Llama farm investment you hear about but shorting subprime mortgages were the real winners of the century.

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