Billionaire Warren Buffett said on Monday that stocks remain relatively cheap compared to other investments as the US economy continues to improve. He also said that the company he heads is prepared to replace him whenever the need arises. The chairman and chief executive of Berkshire Hathaway Inc. addressed a variety of topics during an interview on the cable TV network CNBC, two days after his annual letter to the conglomerate\'s shareholders was released. Buffett said even though stocks aren\'t as cheap as they were during the depths of the recession in 2008, they\'re still a more attractive long-term option than bonds, gold, cash or anything else. \"Equities are still cheap relative to any other asset class,\" Buffett said. In his letter, he devoted two pages to explaining why he prefers owning a piece of a productive business instead of bonds or gold. Houses are another attractive investment at current prices, Buffett said. He added he might buy a couple hundred thousand homes if only he could figure out a way to manage them effectively. He said he isn\'t very handy. \"Single-family homes are really cheap now too,\" Buffett said. Buffett conceded in his letter released Saturday that he was dead wrong to predict the housing market would recover by now. He said Monday that he believes conditions will improve in 2012. The reports Buffett gets from Berkshire\'s roughly 80 subsidiaries, including utility, insurance, retail and railroad firms, show the overall economy has been steadily improving since the summer of 2009 in every area except businesses related to housing construction. Over the weekend, Buffett created a stir by writing that Berkshire\'s board had chosen someone to succeed him as CEO someday with two backup candidates. Previously, Buffett had said only that the board had three internal candidates to replace him. None of the CEO candidates have been identified, and Buffett said Monday that the likely successor doesn\'t know he would be the board\'s pick. Buffett said Monday that the new language he used to describe the succession plan in his annual letter to Berkshire shareholders wasn\'t a sign of change but was only trying to clarify the plan. Buffett, who is 81, said he doesn\'t think investors should worry that much about who will replace him. He pointed out that Berkshire owns sizeable stakes of more than 5 per cent of Coca-Cola Co., IBM., American Express Co. and Wells Fargo & Co., yet he has no idea who would replace the CEOs of those companies. \"I know they have wonderful businesses, and they are developing great talent,\" Buffett said. He also said last year\'s departure of a top executive, David Sokol, did not affect the board\'s choice for successor. Many investors had speculated that Sokol was the likely successor before he resigned amid questions about stock he bought in the Lubrizol chemical company Berkshire later acquired. Buffett was also asked about the news business because Berkshire just bought a second newspaper last fall to go along with its sizeable stake in the Washington Post Co. Monday\'s interview was conducted in front of the presses for Berkshire\'s newest paper, the Omaha World-Herald. Buffett says newspapers face challenges because of competition from internet news sources and the rising cost of newsprint, but they will have a decent future if they continue delivering information that can\'t be found elsewhere. And they need to stop offering news free online. \"You shouldn\'t be giving away a product you\'re trying to sell,\" he said. Buffett reiterated his call for tax reforms and a higher tax rate for wealthy investors like himself. He has said for years that he believes his tax rate is too low compared with what middle-income wage earners pay. \"The real question is whether this is a tax code that the United States can be proud of,\" Buffett said. But he says neither Democrats nor Republicans want to talk about reforms now because it is an election year. Buffett said the nation\'s $1.2 trillion deficit won\'t be fixed by contributions from individuals. He said the country is simply spending too much and bringing in too little revenue, like a rich family that has promised too much. Buffett said Congress should vote on the proposals developed last year by the deficit-reduction commission led by Republican Alan Simpson and Democrat Erskine Bowles. That package included cutting about $4 trillion from budget deficits over a decade, but few of its recommendations have been embraced. Buffett said Europe\'s debt problems remain a concern, and he doesn\'t think those countries have solved their problem yet. \"The basic problem is they gave up their right to print their own money, he said.