BUFFETT: Well, I don't worry that much in the sense that we've been through lots of recessions in the past, and that the country always comes out stronger, and so I expect--I expect stock markets to go down from time to time. I expect there to be uncovered--I expect that we will uncover credit mistakes. I expect that we'll have recessions. But I also expect, and I'm totally convinced, that your children will live better than you and your grandchildren will live better. So I don't--I don't get upset about, day-to-day, what's happening in the market. It may offer--in fact, it does offer chances to buy things more attractively. I mean, if I go to a supermarket and things are on sale, I feel better.

QUICK: All right. So let's talk about that. Are there bargains out there right now?

BUFFETT: Well, there are certainly things that are a lot cheaper than they were a few years ago, and the businesses are better. Now, that doesn't mean they're doing better today, but they are fundamentally worth more money than they were a couple of years ago, and people are just looking at the glass being half empty rather than half full now.

Source:

http://msnbcmedia.msn.com/i/CNBC/Sections/News_And_Analysis/_Blogs/Warren_Buffett_Watch/_DAILY%20POSTS/Documents/Three%20Hours%20with%20Warren%20-%20Complete%20Transcript%20-%202008-08-22.pdf