Warren Buffett Goes in Depth on Investing and other things. How to Become very rich in 2017

[UltraVid id=59 ]next berkshire hathaway chairman and CEO Warren Buffett talks about the US economy and the challenges facing the global economic recovery he spoke with the president of the Economic Club of Washington David and Reuben Fein and now get out okay thank you very much Warren for coming this evening and honoring us and I don’t think you need much of an introduction but I just will say that I think it’s fair to say that you are the most respected investor in the world and I think the most respected businessman in the world not just because you’ve made a great deal of money but because you’ve done it with enormous integrity and humility and as people will see tonight with enormous sense of humor and in addition to being a business person that everybody would aspire to be he has recent years become the with Bill Gates to Melinda Gates the largest philanthropist in the world I think his net worth might be in excess a little bit higher than mine I’d say about fifty billion dollars more ten more or less and he’s committed to give 99 percent of that away and he’s in the process of doing so so thank you on behalf of the country and everybody else for doing your background is pretty well known but some people may not know that you actually spent much of your formative years in Washington DC your father was elected to the Congress so you moved here you went to Alice Steele junior high school got a lot of C’s and DS as I understand and then you went to Woodrow Wilson High School finished 16th in your class but you were class of 17 we might have right well you had you were working you were doing you were delivering papers in the morning and delivering a Hyper’s in the evening and so forth and my question really to begin is that many people grew up in Washington love living here and they want to stay here so they hope to aspire to be the head of a lobbying firm someday or they have a congressional staff or something do you ever have any regrets that you might have met have never make something of yourself have you stayed here well I’m still young baby but I may come back alright I went out to Alan steel today first time I’ve been there in 65 years and I met the principal I went to Wilson also today but but at allé steel I tried to get my record expunged but I had to luck well you told me earlier today that you lived in Spring Valley yeah live did 49th Street between Venice and Florida morovia and so today with the camera crew you knocked on the door the person was living your house what did that person say well we had a good time I mean the house came to shrunk but okay she was she was very about a wonderful woman she’s lived in the house for 30 plus years and and we got on very well and and then we retraced my paper route so when you were growing up in Washington you were already a business person well I thought so I didn’t get a lot but a public recognition of such business well but stuff so you were making money and as I understand it you filed your first tax return when you were 14 years old yeah it was for that it was for the year when I was 13 and I filed it when I was 14 me okay and did you think the tax rates were too high then or it hurt more than those days I I didn’t deduct my bicycle and my watch as business expenses then and only because the statute of limitations is fine I took an entire that turn lane I never used my bicycle for pleasure or my watch I never looked at my watch except when I voted papers yeah so after you graduated from Woodrow Wilson you then went to actually University of Pennsylvania for a year and a half and then you transferred back to the University of Nebraska why did you leave Penn I was a great business school why did you leave yeah I just I thought I would I mean I want to quit after one year to beat them your honest answer on my father talked to me he kind of talked me into going to college in the first place and then he talked me into going a second year but he said if I went a second year then I could I could drop off and so then I went back to Nebraska that way I got out of college in three years and so it had sped things up and I plan to live in Nebraska so when you graduated from university braska you applied to Harvard Business School and were rejected that’s true has Harvard ever announced that they’ve regretted that decision I understand a development officers kind of unhappy so you rejected by Harvard you went to Columbia below and then you met the man who you really idolized men Graham and when you took his class was he as great as you had thought he was going to be he really was the only he only taught one semester one class I mean he came up from Wall Street and taught this class that’s the reason I went to Columbia and he I knew what he I do I’d already read all the books and everything slightly but it was inspirational this to be around him and I was it made a real difference in my life so when you graduated you wanted to go work for him and in his firm and then he rejected you for an interesting reason up in those days I understand if they were Jewish firms and non-jewish firms and his was a Jewish firm and you weren’t Jewish so he said because you weren’t you wish he didn’t hire you with that right that’s true he and I I was ready to convert believe me up I think they might have followed a little pony at the time something I but it was it was true there were very few firms in Wall Street that would hire choose at that time and then only employ five or six people but he told me to the extent that they had we’re able to employ five or six people they really felt that the Jews could not get in the most jobs in Wall Street and that they were going to employ only Jews well his name was Ben Graham but actually his real name was Ben gross bomb well it’s turn shit that means name yeah my my son is named Howard Graham Buffett named after Benton and he’s very glad that Ben’s book changed his name so you moved back for a while to Nebraska but then he openly changed his mind and you went to work for Ben Graham I kept pestering yeah I made a real pest of myself and in those years what did you aspire to do what do you aspire to become a very wealthy person would you want to be buying US stocks would you want to buy companies what was your aspiration in those early days I loved I loved just analyzing securities I just spent hours and hours and hours just I kept turning the pages of Moody’s which instead of going you know you had no internet dinner and they also had two sources of information Moody’s and Standard & Poor’s and we happen to have these sets of Moody’s they were about in aggregate probably about 8,000 pages about five different manuals and I went through those page by page and must’ve been exciting going yeah it’s a little strange I mean you know I actually went to Amazon a few years ago and I found an old 1951 moody’s now everybody else is going there for Playboy magazine but I’m quartering the old booties uh we’ve got a straight guy here well when you were working in New York you were interacted to one of the companies that Ben Graham was involved with which was Geico absolutely I understand you came down and knocked on the door what guy Cohen you just started talking with them and yeah it was it was really a lucky day I went I went I was at the Columbia University library and I looked up then in Who’s Who in America and it had a whole bunch of things but it said chairman government employees insurance company so I asked the librarian how can I learn more about this I never taken any courses in insurance and he said well there’s this big best manual if you read that you can find out about the company there was one page on government employees insurance so that’s Saturday I got on the first trade and it came down to the Washington and I went to the headquarters of what was then called government employees insurance and to my total surprise the place was locked I mean people didn’t work and people don’t know working on Saturday was Washington Cigna work on Saturday so I’ve kept pounding on the door and finally a janitor came and I said to the janitor I said is there anybody here I can talk to except you now he didn’t seem to get offended into that brick particular introduction so he said there’s a follow-up on the I think sixth floor and he’s the only one here and he was a man named Lorimer Davidson and Lorimer Davidson changed my life in a big way it was a wonderful wonderful man and he talked with me for maybe four hours on Saturday and gave me an education like I never got in school and so you liked it so much you eventually bought the whole company it’s one of those theaters and it took a few years so when you were starting your investment partnership I think you started around 1956 with a partnership that’s correct right and as I understand it if somebody put $10,000 in in 1956 and it stayed with you and kept that stock that they could have gotten when you liquidated some of the partnerships at ten thousand be worth roughly five hundred million dollars today that’s about right Wow yeah so those people are very grateful to you who did that right no I was grateful to them though I mean they were betting on a 25 year old you know who looked about 20 and acted about 12 and so I you know and actually they were mostly relativism is my father-in-law and sister and her husband my hand so your best partnership started you started buying companies and buying stocks and one of the companies you bought was Berkshire Hathaway and you know your company is now very famous its name Berkshire Hathaway that was not one of your best investments wasn’t it was really dumb yeah yeah yeah I mean it was it was what I call us I usually call Graham’s approach on buying very cheap stocks that weren’t very good companies regardless because you would be like walking down the street and finding a cigar but there was one plus left in and it didn’t cost anything it was kind of disgusting but it didn’t cost anything but I thought Berkshire Hathaway with that kind of a company and it wasn’t much of a pop either so you know your company’s name Berkshire Hathaway you’ve sold that company many years ago did you ever think of changing the name no no I don’t I don’t do much of that bank so when you started originally you were buying stocks we pick stocks but then you started buying whole companies without a different skill set and how did you learn to buy and operate these companies well when I buy a hundred shares of XYZ company I I look at it as buying the whole company and so I’ve always looked at buying stocks as buying businesses so it really wasn’t a different situation out i I couldn’t resell it and I couldn’t if I owned the stock I couldn’t change management’s which I could if I owned the whole company but it was basically the same approach I’m a better investor because I’m a business person and I’m a better business person because I’m an investor they cross over but today Berkshire Hathaway has how many different companies that are part of the it’s kind of about 75 but some of those on more company so it’s so against 75 companies you have about 270 thousand and four thousand seven current seventy thousand employees how do you manage all you have a very small office how many people you have in your office managing all well we’re now up to 24 we’re on one floor we’re never going to leave one floor I tell them that you hire all the people they want but we’re not going to leave one floor so they want people sitting on their lap go to it so what you do you sit in your office during the day looking at new ideas for companies is that how you I like to read a lot so I read every newspapers and I read all kinds of financial information and and basically I’m looking for one good idea here and do people send you letters over the transom as any of those ideas ever work occasionally but not not very often but I only need one a year we’re in jail and incidentally day but if you want to help me out right we have a couple companies like this tell you but you don’t pay high prices but so in your office you have a computer in your office that you not in my office but but other people in the office have them so I know you’re not a famous technology person but do you have an iPad or do you do no internet things I do internet things yeah I love the Internet I mean the internet it’s fascinating to me because it’s probably affected my life you know almost as much as say Bill Gates it we have a when Bill and I appear together sometimes we we use the trick question of besides an email which one of us is on is on the computer more and the answer is me because you’ve played bridge I played onion and every every every night you spend yeah it’s a couple hours a night and after all these years is doing are you a champion no no I’m not even close I I just have a good time every day no it’s the most interesting game I’ve found and if people know that they’re playing with you over the United the name t-bone and that it’s gotten around that I am t-bone yeah I used to put my age is 103 so when I did something dumb people would say for a guy hundred and threes not bad but oh you met over the years Bill Gates and I you first meet bill what how did you first meet him I met him in July 5th 1991 make Greenfield who some of the people that probably knew how to had a house out and then I Bainbridge Island I got there in Seattle and she called me in the late 80s and she said Warren do it I love Seattle do I have enough money to buy a second place and I said make anybody that calls me an ass does have enough so ones that don’t call so she bought this house and she wanted to show it to me that in 1991 so actually K Graham I Wally Evans maybe one or two others went out there and visited Meg and then Meg knew the senior Gates’s so she called up Bill senior and Mary gates and said I’ve got this crew out here could we drop down on him and he said fine and then Mary called up Dylan said Warren Bubba’s coming down and would you like to come down he said hell no he said what do I have in common with that guy you know he he doesn’t understand technology he’s hopeless and Mary was very determined that she said you know you’re going to come bill and so they negotiated a while and finally they got down to where he said he’d come down for another hour and 27 minutes right and and he came down and we hit it off we were two still talking ten hours later and we became good friends but he never convinced you to buy microsoft stock or buy technology companies he didn’t he didn’t try to he tried to get me to use a computer that worked eventually when I learned I could play bridge on it I got interested in that I don’t understand what happens with it though I thought he originally said I get the most beautiful woman working at Microsoft that means that’s what he did but he was engaged to her so I didn’t work so as you’ve got the no bill better did he influence your views on how to make investments or it influenced your views on philanthropy I wouldn’t say too much we we have a group of maybe 50 people that started getting together in 1968 we need every other year Don Graham was here tonight it as the Buffett group delay yeah and then at that at those meetings we would talk about various subjects and philanthropy was an important subject so I think it was maybe in 1993 or something like that we had a meeting it was in Ireland at that time and I actually brought along the Gospel of wealth for everybody read we discussed it then but so our thinking sort of evolved together in a way but have you ever regretted not getting involved in giving away money earlier in your life or you don’t my wife regretted that she thought I should she liked the idea of giving away we both agreed on giving away all the money I mean once we had everything we wanted we’ve had everything we wanted I mean it it uh you know and the surplus wealth I have has no utility to me there’s all kinds of you totally the rest of the world if used properly so and we agreed on that early she would have liked the idea of giving away more of it earlier and I felt that I was going to be a better compounding machine than that in most places and that there would be a whole lot more to give away later on so I told her I’ll pile it up and you unpiloted in oh man all right now your father was a very conservative Republican Congressmen now you were probably a Liberal Democrat is that a fair well yeah I would but I was I was always very conservative but you’re conservative are when he was alive I and you later moved further to the left and would you compare it’s fair to say you’re a liberal Democrat now or yeah I’m not a card-carrying Democrat I support certain Republican but I haven’t and actually this year gives the money to a Republican congressman and you’ve been come famous recently in Washington for among other things the Buffett Rule which says that people I guess tax rate should be at least as high as their secretaries yeah in terms of the aggregate of payroll and income taxes I I couldn’t get a disease named after me so I could settle for at Aksum and if any of your friends suggested that you compensate your secretary in capital gains kind of thing so she could pay a lower rate she’s been suggesting that lately yeah right yes she goes on the phone with some tax adviser God know it the interesting thing is people have speculated about how much money she made but the tax rate actually above one hundred and six thousand dollars for most people goes down if you take the aggregate payroll and income taxes and because the the payroll tax is the most regressive of all and quits at that point and so actually between say one hundred and six and two hundred in most cases the rate would go down like your financial acumen is pretty well-known so we now have in our country fifteen to half trillion dollars of debt in our federal government and one trillion a year or so adding up what would you do if you were able to wave a wand and try to fix our debt problem or deficit problem well I think I would do what everybody in this room would do I mean if you ask everybody here how much the federal government should be raising annually or or in aggregate over the next ten years the answers would come in somewhere between eighteen and a half and nineteen and a half percent which is close to what’s been in the situation since World War two it yeah so how much the government should be spending that they probably come in at 21 percent coming from 220 and a half or twenty-one em there’s and incidentally you can have a two percentage point deficits relative to GDP and and the debt to GDP will not grow I mean that said that in fact it probably will shrink just a touch so you can have a couple percent deficits on average and I would take the plan that ninety percent of the people there would come up with they get to that 19 percent of revenue and or they get to 21 percent it can be simpson-bowles it can be a bunch of different things and no one can agree on a percent on every point but we do I think we do agree on the fact that we published a tree raising eighteen and a half to nineteen percent and we should be spending 21 or there abouts and that means it means getting more from taxes and it needs cutting expenditures and the problem is the you know the Democrats don’t want to talk about what expenditures they would cut in the every Republicans don’t want to talk about increasing revenues so would you would be in favor of increase in the capital gains tax or no yeah I would I would be in favor of that but but we can come to we’re raising will say you know 2.4 2.5 trillion now we have to raise you know probably three or four hundred billion more than that and that can be done I mean we’ve done it straight through them and I’ve operated under all kinds of tax rates including 39.6% on capital gains and the country is growing under all these certain desire country works but somebody has to step up and say where it comes are and won’t come from just talking about reform doesn’t solve anything on either the expenditure side or the revenue side I mean you’ve got to get specific about it and and like I would I bet if everybody in Israel designed a plan I could sign on to ninety percent of them and today the economy in the United States is thought to be growing about two and a half percent a year view agree with that you think there’s any chance of a recession in the near term I think it’s very low in months unless events in Europe develop in some way that spill over here big time but incidentally if the economy grows two percent a year and population grows one percent a year that means each generation is living 20 percent better than the generation before and it means in a century people are living three times as well as they lived at the start of the century so right I mean our rates of gain and the way people live has been dramatic in my lifetime I was born in 1930 there’s six times the real GDP per capita as when I was born six times in one person’s lifetime we have a system that works I mean it and it’ll keep working and I may not work at six times for the next 80 years but it’ll work it will be two-and-a-half times or three times how are you worried about the Euro going away do you think the Europe would allow the Euro to go away or that’s the big question I mean have you know that Lincoln said that you know house divided cannot stand and half-slave a free wouldn’t work and we’ve got a system words they’re half in and half out I mean they’re in on common currency and they’re not uncommon fiscal policy or common culture or common labor practices and that house will fall but that doesn’t mean it has to and it means that they have to they have to reconcile some of these things that it can’t be half slave every now you invest most of your money I guess in the United States have you increasingly been investing outside between the emerging markets or you’re not as comfortable investing in them or dimmer I’m comfortable anyplace I understand the business well and some accept the rules that they operate in and where I’ve got the right management that’s all we will buy a business you know in any one of 40 countries tomorrow if it’s the right kind of business but most businesses I hear about are in the United States they think of Berkshire here we’re not we’re on the radar screen here to a greater sense that are on the world so I understand it’s somebody from Israel sent you a letter over the transom of one and a half page letter and you openly bought that company that person was talking about four four plus billion things we bought 80% of it for four billion and he wanted me to go see it he told me what a wonderful place planning and everything and I said I’m not going to go see and I don’t go to I don’t go to Iowa it all started s concerned and he said now this day said you’ve never seen a plan like this and I said hey Don I said you know I love your business I love you you know I’ll give you four million dollars but I’m not gonna I’m not going to go to you know I got to start crossing oceans and crazy like that so he said well if you buy the business will you come and I said yes so we bought the business and then I went to Israel it was everything he said and he’s very pleased and I said dehydration if I’d seen this they kind of paid you more money that’s why I’ll go visit businesses so what about China do you invest much there you go where to China very bad we’ve had too big and I was sitting in 2002 or 2003 reading the report PetroChina and it was fortunately was in English and I put about 500 million dollars into Peppard China the government of China owned about 90% of it we owned 1.3 percent so between the two of us we control the company I see and we made quite a bit of money on it it was a very very cheap car I mean one huge oil companies in the world the whole company was selling for thirty five billion in the market and that was ridiculous now one of your most famous investments is Coca Cola you bought relatively cheaply it’s very good for like everybody in now when I don’t care whether you drink it just poured on your neighbors you but open the can and when you were a young boy you you were addicted I was called to Pepsi how did you switch to coke well I would like to say of course that I just finally grew up in our so when I was a kid Pepsi was 12 ounces for a nickel and coke with six and a half ounces for a nickel and if you have any insights into my personality or not which I bought so of the investments you’ve made over the years at Berkshire Hathaway which one would you say was the single best investment is there one that you really are most proud of well the one I’m probably the most emotionally attached to is Geico because of a bunch of reasons but it goes back to a day in January of 1951 and Saturday and that what normally Davidson did for me changed my life and they didn’t have to do it I mean I walked in there some 20-year old kid on a Saturday and he he spent four hours educating me and then he became a friend for life and then subsequent people are Jack Byrne and 20 nice leaders here tonight I mean it’s just a wonderful association whether we made any money or not but we’ve done pretty well on that investment too but it beyond that it has a special meaning to me are their investments that you really wish you had never done what’s your worst investment I made a lot of terrible deals and the worsen it targeted up I’ll be the worse you’ll be when I make in the future but the the current title I bought a company and and instantly I did it I mean we do not have powerpoints around or people explaining this stuff to me I just go out and do them and we bought a company called extra shoes George Mitchell certain idea of the company and we paid 400 million dollars for it which went to zero but we paid 400 million in stock and the stock we gave up is probably worth maybe three or four billion today so whenever Berkshire goes down I feel better about that deal what about the deals you passed on it you famously passed on Intel when it was getting started I thought and I knew Bob Bob Noyce pretty well and we bought it we bought to converge when they were private there just because of Bob we bought them at Grinnell College and the endowment agree now college want to make million to us to a billion dollars in about 12 14 years so and it took until was help on that but I you know they in the end I don’t worry about things I don’t understand I mean it I think it was Tom Watson senior said I’m no genius but I’m smart in spots when I say around those spots you know and that’s and there’s a lot to that and knowing your circle of competence is where that perimeter is enormous ly important and you know the fact that there are all these all kinds of things I can’t do and there’s plenty of companies I can’t analyze but I don’t have to worry about that of all the companies you bought maybe the one that bought you brought you the most trouble was Salomon when you bought it in one point it was almost in effect put in the bankruptcy and you had to go and run the company was that the most difficult experience you had at Berkshire Hathaway I would say that probably was yeah that was I was there a CEO for nine months and four days it was 20 years ago I think I remember every day of it so today when you have all these managers running your 75 different companies do they call you every day and say I got this problem or that problem or how often do you talk to them know if they need to call me they’re in trouble State I mean we buy businesses where the managers come with them and there are some managers that I don’t talk to once a year and there’s one I talk to almost every day but after the one that I talk to almost every day I was in the next most the highest frequency would be maybe once a week but they always call me I don’t call them now when you want to make an investment you have a Board of Directors you ever asked them I’ve heard that you will buy an railroad for 20-some billion and not tell your board of directors I told a few of them okay that was an exception that I told them I not going to happen no they part of part of why we’re able to make deals is because we can act fast they know we have the money they know we’ll do the deal we closed on October 6 2008 on a six and a half billion dollar investment in Wrigley in conjunction with Mars and they knew we would have a six and a half billion that we would close on it eight people weren’t closing on anything and so it’s it’s a real advantage to be able to pull the trigger and and one and if we have to go through lots of presentations and everything I mean I’ve been on 19 corporate boards and you know every deal works on the PowerPoint you know I so I did it it’s a Show and Tell type thing and I don’t I don’t really participate in it so recently came out in court discussion that in the insider trading thing that’s going on related to investment you had made in Goldman right it came out that you would set the deal and you told the investment banker this was the deal and they had to get back to you but you said don’t call for a few hours because you’re going to Dairy Queen if your grandchildren is that right yeah that’s true you didn’t want to be disturbed on a deal I did not I knew what I would do and I told them what I would do if they want to do it fine if they didn’t want to do it fine I mean we we don’t really negotiate at Berkshire just I don’t have enough time then I’ll just for the rest of my life you know negotiating with people so I tell them what I’ll do and and if it works fine if it doesn’t work fine it now famously people wonder who will be your six and I wonder if tonight you wanted to give us any insights into that well I have left the directors of Ouija board and I plan to keep in contact with them and I don’t want to disappoint you but you’re not on the short list David can I be on the long list so we’re in perfect shape for though I would say that we’ve got we’ve got successors that in most ways we’re better than I am but you expect that Berkshire will be around for 20 30 40 years for you it’s built on being forever and it has a special culture it has directors who are committed to that as managers it would we have an organization would reject anybody that tried to tamper with that culture and I think it is special and they can stay special so today having achieved all that you have achieved you’ve got the admiration of virtually everybody in the world for what you’ve done what kind of motivates you to keep going what are your aspirations over the next five years or so I’m having the time of my life I mean I get to do every day exactly what I like to do with people who I love and who seem to like me pretty well and and it doesn’t get any better than that I I tell the students that come to see me and I have 48 universities come out every year I tell the students take the job you would take if you didn’t need a job and I’ve got the job that I don’t need a job and I’ve got that job now you give your giving away 99% of your wealth you have three children seven grandchildren and nine great-grandchildren and any of them ever say maybe you could leave some of that to me or a favor well I’m leaving some of it to them and one of the things I do is that I don’t write a will very often but when I when I write a will I give it to my children first before I sign it they all read there they’re the executor and I want them I want two things I want them to understand exactly what’s in it and secondly I want agree with it and if they don’t I want we talk it out now and we’ll figure out what makes sense and so every I don’t know five or six years or seven years whenever I do this they read it and sometimes there is something that didn’t understand in terms of exactly what their duties might be or something of the sort and then in terms of equated I’ve got one son that likes a farm I’ve got a farm and they’ll get a gun to the daughter likes the particular house and I’ve got these various ways of acquainting that and percentages and all of that and in the end I think they feel very very lucky in life so the average person who doesn’t have your investment skills and they want to not lose their money they would you recommended a play to stock market they buy mutual funds what do you recommend the average investor well planes are no playing is it out of word I would choose he I would recommend that they put a similar sum that maybe they’d be earning whereas they went along but but save something every month than just and basically put it an index fund they are not in a position to make judgments on stocks and so they’re not in the game anymore than I’m you know I can I can prescribe in medicine or something the sort they will get a good result in the American economy is done wonderfully I mean if you take the 20th century the Dow started at 66 and it ended at 11,400 now think of that how could anybody get a bad result in investing starting in 66 and 11,400 but a lot of people do because they jump in at the wrong time or they think they know this stock versus that stock but the average person to just consistently buy equities which to me are by far the most attractive investment choice around and they and put it in and they live up to 20 or 30 years a loo very well but you don’t subscribe to the efficient market theory that says basically can’t beat the stock market you subscribe to that theory that you can sir you well if I have got that period right I’d still be delivering papers yeah no no I think I think I don’t think there’s any question that certain people who evaluate stocks as businesses can make intelligent decisions about businesses which will enable them to do very well and huge market but I don’t think somebody that is listening you know to a a TV channel tell them what to do or somebody’s jumping around with astronomy v’n some sales person was getting paid more money for selling them something and getting the change tomorrow is the key to it now you you gave away or committed to give away the bulk of your money to a foundation set up by other people why did you choose not that just have the money go to a foundation named after you that presumably you would control and how did that idea come about well originally I actually planned I thought my first wife without loved me and that she would give away the money so it it would have brought the foundation that she ran but the idea was to get the money spent and you say it’s run by other people but it you know if you set up the Ford Foundation or they set up the Carnegie Foundation they’re being run by their people just the Carnegie didn’t know who they would be or Henry Ford didn’t know they’d be so yeah they are going to be run by other people if they extend beyond your lifetime and I I picked people that I had enormous confidence in the fact that they had a similar judgment about where money should go and and and where I thought they would do a first-class job of administering it and then I mean in the case of the Gates Foundation I get people that are putting up their own money big time we’re very able people or working full-time out of themselves who aren’t charging me anything and and I’ve got these foundations that are run by my children that it’s been wonderful for them and they each have a separate foundation so that they can follow their own interests and not have to sort of you know roll logs as to who quotes for this one or that one and it’s all worked out perfectly and what was Bill Gates reaction when you call them and said guess what I’m giving you fifty billion dollars eventually I think that one should joke about this I don’t remember exactly what he said that he was surprised okay and did he suggest you put your name on the foundation is right I don’t want my name on everything its amendment you could there all kinds of people to do want their names on it so you can sell it to some other guy why should you get gives anywhere you don’t get anything out of it you know okay I understand so as you go forward now are there certain things that you would like to accomplish as beyond what you’ve accomplished or there’s certain social problems you’d like to see being solved or economic problems or is your goal mostly to keep your company doing well and give away the money well in terms of personally sure I’d like to I want Berkshire I mean that is my painting in life I’ve been paying it all my life virtually and I want to keep painting it and haven’t become even more of what it already is and so that’s what I love anything that anything that works positively for Berkshire in terms of adding better businesses you know having wonderful managers right and it makes them be in a position to get their full potential from their companies I love and I’ll do that as long as I can I like the idea that the basically the fruits of that you know will be used by some very intelligent people to improved a lot of a whole bunch of people who didn’t get the lucky strong life like I good and how old were you when you realize you were much better than other people in picking stocks and making these kind of estimates and you realize that as a young person or did take much longer before you realize you were much better than everybody else it sounds obnoxious but I thought it was going to be pretty hot what I went to this period at Wilson at Woodrow Wilson where I am I was I was really bad at Alan steel but I was kind of working out of it Woodrow Wilson I had these teachers that I caused some trouble to but they did think I do a lot about stocks and of course in those days teachers put all the money in AT&T I mean that was the ultimate safe investment so when I was feeling particularly obnoxious I was shorted a little AT&T and brought the confirmation showed into the teachers made worried a little but I know I you couldn’t you couldn’t love anything as much as I loved investments and I not get thrown ego that I spent I read every book in the Omaha Public Library this was by the time I was 11 and we moved back here as soon as I got back here my dad was in Congress I didn’t get everything at Library of Congress I want to read it well there’s one company in washing-up you didn’t mention you obviously bought Geico and that’s one of your most famous investments but you made a very famous investment in the Washington Post right many years ago what attracting through the Washington Post and how long have you held that invest well I love the business as such but when I bought the Washington Post Company this is pretty split they had about four point eight million shares outstanding and the stock got down to sixteen but but thanks to the Nixon challenge the TV stage their TV stations and a few things that bebe rebozo on the rest the stock cascaded down from 37 so it when we bought at the whole valuation of the America of the Washington Post Company was about a hundred million dollars now if you’d asked any reporter at The Washington Post to go out into a story on what the Washington Post Company constituent businesses were worth they would have come back and said four or five hundred million so you were really buying a wonderful business run by wonderful people at 20 cents or there abouts on the dollar and you know it it’s almost a classic investment if you’d ask any of the people who were selling their stock to us what’s the Washington poke company work they would have said three or four times what it’s selling for but they sold it because they thought it was going to go down the next day and they were right for a while but you’ve owned that now for everything that’s been 29 years I mean a 30 million so you are an optimist about the future of our country it’s a cinch yeah we haven’t lost some secret sauce I mean yeah go back to that when I was born in 1930 now was 252 one of the day before I was born on a Saturday Friday was 252 that was a high for the year it was going to go down to 42 I had no connection in this folks the but you know if I’d seen that of my dad my dad was going to lose his job and and and he worked in the bank and they had all his money of that bag of clothes and he had no money to pay his mortgage or anything that was going to happen within a year if you can see that you said you know go back and be like the old Woody Allen movie you know just don’t don’t even come out and look at what has happened since that time I was you know we went through a terrible war we went through a terrible depression went through 25 percent unemployment would the thousands of banks closing six for one you know we’re not smarter than the people in 1930 we don’t work harder than give then she’s got a system that works I’ve been working you know since since 1776 and we’ll keep working Oh any regrets in life not really no and today you are somebody who very close to the prezi night space if he asked you to come in and serve as an advisor would you do that that it won’t happen if he wants to ask me anything I’ll certainly be I’d always be glad to help but that would be true of any president or any circumstances and today Berkshire Hathaway is that a buy at this price well the businesses as owns are worth more than the market price but that’s true all other businesses suit well what I’d like to do is on behalf of everybody here thank you for an extraordinary tour de force of your explanations of things and pranked you very much for coming this evening and I think everybody had enjoyable evening I know I certainly did and I want to thank you on behalf of everybody here and all America for what you’ve done and for your philanthropy and for your confidence in America and on behalf of our washing the economic club and everybody here I’ll just give you a few gifts if I could you may get on the short list of engine this weapon this is a Woodrow Wilson High School jacket we’ve had made up for you okay and and we have here a copy of the original map of the District of Columbia we’d like to give to you as a gift from the club and I’d like to give you as a personal gift a copy of the Declaration of Independence when we talked about this appearance you were at the archives and I think you said you hadn’t been there before it was marvelous never been there and I cornered you and you said you weren’t sure you would agreed to but you agreed that you would do this and I thank you for honoring your commitment to come and this says it’s inscribed for you and it says Warren Buffett a rare modern man with the essential trace of our founding fathers great wisdom courage and leadership and also great well oh thank you thank you very much so she said it three and off [Applause] ladies and gentlemen please join the after-dinner reception with cordials and sweets in the Maryland room and don’t forget to take your complimentary champagne glass with you and pick up your gonna tote bag as you depart haven’t they mean the danger time on Washington journal tomorrow morning

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