When it comes to deciding where to invest, the stock market is a no-brainer for Warren Buffett. In an appearance on CNBCs Squawk Box Thursday, Buffett said that current interest rates such as 2.42% on a 10-year U.S. Treasury Bond are hardly enticing to him.

I dont start salivating, lets put it that way, Buffett said.

Buffett Explains Why Low Interest Rates Are Good for the Stock Market

Warren Buffett isnt excited about low interest rates. but he doesnt mind them either: they help keep the stock market robust and push prices higher.

Everything is a function of interest rates, Buffett said. Interest rates are like gravity.

Buffett might mean that, as gravity is a constant, interest rates are always affecting different economic sectors. When it comes to the stock market, low interest rates means more people are investing. This greater demand for quality stocks pushes values higher, helping the value of investors portfolios grow.

Assets are worth more when interest rates remain near 0%, according to Buffett.

Every asset, at present value, is worth the cash it will return before its termination date, Buffett said.

But the inverse is also true; when rates are up risk-averse investors will take their money out of the market to put it on deposit.

If interest rates were 10%, all of our stocks would be worthless, Buffett said.

Buffetts Track Record Makes Stocks the Obvious Choice

Even though Wednesday saw a stock market sell-off, We actually bought a few stock yesterday, Buffett said, though he declined to name them on Squawk Box.

But as always, the deciding factor for Buffett isnt what the market is doing, but his confidence in the business hes investing in.

If you told me the stock market was going to go down 500 points next week, I wouldve bought those businesses anyway, Buffett said.

In addition to stocks, on Wednesday Buffetts company Berkshire Hathaway also bought Van Tuyl Group, the largest privately held car dealership chain in the U.S. reports CNBC. And he doesnt plan to stop with just one dealership: We will hear, I predict, from hundreds of dealerships in the next year.

With Buffetts multi-billion fortune made from investing in the market and acquiring businesses, its no wonder he trusts the market more than deposits for decent returns.

Anybody that has owned a cross-section of American businesses over last 10, 20, 30, 40, 50, 60 years has done fine, Buffett said on Squawk Box.