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Updated from 8:18 a.m. with more of Buffett's remarks.

NEW YORK (TheStreet) -- Warren Buffett said there is "no jockeying" between the two candidates likely to succeed him as CEO of Berkshire Hathaway (BRK.A) - Get Berkshire Hathaway Inc. Class A Report (BRK.B) - Get Berkshire Hathaway Inc. Class B Report, the company he has run for 50 years.

In an extended interview Monday on CNBC, Buffett also explained why he recently boosted his stake in IBM (IBM) - Get International Business Machines Corporation Report to 7.8% from 6.3%.

Berkshire Hathaway investment Wells Fargo is also in Jim Cramer's Action Alerts PLUS charitable trust. Read Cramer's thoughts on that and all of Buffett's letter on Real Money here.

"I buy it because I like it," Buffett explained. And the stock is "doing exactly what I like."

In Buffett's letter to Berkshire shareholders over the weekend, the names of two possible successors emerged: Ajit Jain, who runs the reinsurance business for Berkshire, and Greg Abel, who heads its energy business.

Some 40,000 people showed up to the company's annual shareholder meeting over the weekend.

Buffett said that some investors have a misconception about his approach, believing that he wants shares of whatever stock Berkshire happens to be buying to go up shortly thereafter. 

"That's the last thing we want it to do," Buffett said. Instead, it's better for the stock to trade sideways or even go lower, since Berkshire Hathaway is trying to build a sizable position involving billions of dollars. 

It was expected that revenue would decline at IBM and that foreign exchange headwinds would weigh on its performance in 2015. "There's been no surprises at IBM since we started buying it," Buffett added. 

IBM's buyback program makes the stock attractive, Buffett said. Buying back stock simply for the sake of buying back stock doesn't make sense, he commented. But when a company buys back a lot of stock when shares are undervalued based on a long-term time frame of at least five to 10 years, then it's accretive to shareholders since it makes their shares more valuable. 

When companies buy back stock that is undervalued, it allows other shareholders, like Berkshire, to make money without laying out any more capital, he explained.

Buffett has been known to avoid companies that he doesn't understand, especially in technology. He said he feels that he knows enough about IBM to make an investment decision.

While he doesn't understand tech as well as the railroad or insurance business, Buffett made it clear that he doesn't understand every aspect of those businesses either. Instead, he understands the economic characteristics that drive the business, much like he does with IBM.

It's also not a wise idea to buy or sell a stock just because someone else is doing it, even if it's him, Buffett suggested.

Big investors can change their mind at any time and no one else would know, he said. Instead, investors need to form their own opinions and do their own analysis. If a stock is cheap based on estimates about five or 10 years into the future, then perhaps it should be bought.

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"Make your own judgments," Buffett said. 

Berkshire also upped its position in Deere (DE) - Get Deere & Company Report, and owned over 17 million shares at the end of the fourth quarter of 2014. That's up from 7.6 million shares at the end of the third quarter. 

"It's a good company," he said of Deere, but it will have its struggles for the next few years. However, 10 years from now, the company will be more valuable than it is today. 

Perhaps the big boost to its Deere position came at the expense of ExxonMobil (XOM) - Get Exxon Mobil Corporation Report. Headed into the fourth quarter, Berkshire Hathaway owned a 41 million share stake in the company. 

"We sold it all in the fourth quarter," Buffett said.

While ExxonMobil is a great company and was an excellent investment over the years, the company's earnings power has been "diminished significantly," he said, as has the earnings power of most other energy companies due to the fall in oil prices. 

Buffett explained that he sold the stock because there were better uses for the money.

Buffett and Charlie Munger, the company's vice chairman, also gave some extra color on the company's history.

Munger joined Berkshire Hathaway in 1982, when the company merged with Blue Chip Stamps Company. When Munger joined Berkshire, it "formalized" what had been going for a long, long time, Buffett explained.

Munger asked Buffett, "Do you have any regret about using Berkshire Hathaway in an effort to teach a wide audience?"

Buffett responded that he loves to teach and it's the approach he takes each year for the annual meeting.

Buffet discussed how American Express (AXP) - Get American Express Company Report lost its exclusive deal as the sole credit card accepted at Costco Wholesale (COST) - Get Costco Wholesale Corporation Report . It was a big deal for American Express, given the size of the warehouse retailer. The current deal runs through March 31, 2016.

But the falling out between the companies wasn't completely unforeseen.

Costco didn't come to terms with American Express at the end of 2014 for its Canadian stores, which put a breakup between Costco's U.S. business and American Express on the table.

Ultimately, American Express provided its best offer and Costco felt it could get a better deal elsewhere, Buffett said.

But American Express continues to buy back stock, which is accretive to its shareholders and in particular, to Berkshire Hathaway. "We love it," he added.

Some companies should buy back stock and others should not.

One of those companies that shouldn't buy back stock now is General Motors (GM) - Get General Motors Company Report, Buffett commented. CEO Mary Barra shouldn't put a buyback on the agenda just to get a short-term pop in the stock price, he said.

General Motors is busy rebuilding its financial division, Buffett said. Barra has plenty of initiatives on her plate to build on GM's former strengths. And Barra is "exactly the right person for the job," Buffett said.

Investors and board members shouldn't have a short-term outlook. That's not the way to build a business, he explained.

Buffett said that 2% annual growth in the U.S. would be a very acceptable rate. The current economy continues to grow a moderate pace, he said.

While stock picking can be advantageous, Buffett said, he believes that the bulk of investors would be better off investing in a low-cost index fund each month. Over the course of 30 to 40 years, "it's bound to have done well," he said.

Own a "piece of America," Buffett concluded.

-- Written by Bret Kenwell 

Follow @BretKenwell

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.