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excuse me

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good morning good morning and thanks for

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coming

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I love it Charlie loves it we're glad to

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have you here

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we're going to make this

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this uh

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preliminary before the question is very

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short

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because we want to get in at least

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60 Questions half divided by the

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the audience outside this

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Arena and a half from you so I would

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just like to get

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right to the

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to the directors and the earnings that

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have been put up

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on the uh

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on our web page this morning but we'll

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cover those very fast and we'll get to

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the questions now

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I

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when I woke up this morning

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I realized

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that we had a competitive

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broadcast going out

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somewhere in the UK and and

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they were they were celebrating

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a King Charles and we've got our own

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King Charles here today

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[Applause]

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and next to him we have

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Greg Abel the who's in charge of all the

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operations except for

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insurance

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next

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[Applause]

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and actually great we have

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uh

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a man I ran into a 1986 and

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has made us look good ever since we have

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the man in charge of insurance Ajit Jane

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Jaden

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[Applause]

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and now we have our our directors here

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in front and if they would

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just stand briefly and then I'll go on

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to the next one and and uh

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they're all here today first of all

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doing alphabetically there's Howard

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Buffett

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there's Suzy Buffett

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there's Steve Burke

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[Applause]

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Ken Chanel

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[Applause]

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Chris Davis

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[Applause]

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Sue Decker

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[Applause]

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Charlotte Guymon

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[Applause]

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Tom Murphy Jr

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[Applause]

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Ron Olson

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[Music]

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Wally Weiss

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[Applause]

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and Merrill Whitmer

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[Applause]

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[Music]

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that's as good as you can get and

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there's one other person I would like to

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mention before we get on to the earnings

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that were put on the uh

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uh in the press release this morning and

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uh

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that's uh

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well let's see who we have there we've

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got

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this is hard to believe

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can you imagine a name

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Melissa Shapiro Shapiro

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and she was uh Melissa Shapiro until she

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married another Shapiro and she put this

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whole thing together with no help from

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me no help from Charlie and a lot of

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help from the people of the other room

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Melissa

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[Applause]

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yeah it's very easy if you can remember

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her second name you can remember her

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third name so Melissa shabiro Shapiro

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and with that I would like to

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next move on to the

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earnings in a couple

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small slides that that explain what

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we're all about and then we're going to

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get to the Q a and uh

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the slide is up behind me yeah there it

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is we reported in the first

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quarter

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operating earnings a little over 8

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billion and when we talk about operating

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earnings we're basically referring

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to the earnings

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a Berkshire Hathaway as generally well

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as required under gaap excluding however

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capital gains both realized and

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unrealized there's a few other very

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minor items but basically

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we expect to make capital gains over

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time why would we own the stocks

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otherwise uh doesn't always work out but

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overall it works out pretty well over

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time but in any day any quarter any year

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even occasionally over a five-year

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period uh

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the stock prices move around

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capriciously now we own a lot of other

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businesses we consider those stocks

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businesses we own a lot of other

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businesses where they get them

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Consolidated and they don't move around

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in value now if we had a little bit of

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Burlington

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stock outstanding if we had a little bit

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of the energy stock trading those stocks

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would move around a lot but the

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businesses are what count so the

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operating earnings as you'll see in the

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first quarter came in at about 8 billion

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and

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uh I would say that

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in the general economy

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the feedback we get is that uh

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I would say perhaps the majority of our

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businesses will actually report

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lower earnings this year than last year

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the

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in various degrees in the last six

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months or so at various times uh

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the the businesses have left

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the incredible

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period which is about as extraordinary

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as I've seen in business since World War

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II uh where the government would pour

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out a lot of money to people

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who couldn't get Goods it was more

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extreme in World War II but this was

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extreme this time

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and it was just a question

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of getting Goods to deliver

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and people bought and they didn't wait

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for sales and if you couldn't sell them

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one thing they would put another thing

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in their backlog it was an extraordinary

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period and that period uh

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has ended it hasn't ended with as you

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know it isn't that employment's fall

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born off a cliff or anything in the

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least but but

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it is a different climate

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than it was six months ago and and a

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number of our managers

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uh were surprised some of them had too

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much inventory on order and then all of

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a sudden it got delivered and people

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weren't in the same frame of mind as

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earlier

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and now we'll start having sales at

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places where we didn't need to have

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sales before

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but

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uh despite the fact

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that this year I think in general will

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be slower

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than last year

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we actually are

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situated so that I would expect and

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believe me when I say accept expect

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it's

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nothing is sure nothing sure tomorrow

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nothing sure next year and nothing is

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ever sure

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either in markets or in business

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forecasts or anything else and we don't

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pay much attention to markets or

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forecasts unless the Marcus Epping off

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or something interesting to do but

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nevertheless we are positioned in two

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respects as you'll see from

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from this uh first report our investment

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income is going to be a lot larger

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uh this year than last year and that's

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that's built in I mean we have as you'll

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see in a minute we've had 125

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billion or so in

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very short term

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investments and

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and believe it or not

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uh not that long ago

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we were getting

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four basis points which is next to

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nothing

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on that 125 billion which means we were

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getting 50 million a year and now the

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same money the other just day or day

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before yesterday we actually bought

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because of someone funny twist in the

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market because of doubts about the

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deficit ceiling or the debt ceiling uh

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we bought three billion of bills at the

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590

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[Music]

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that's 5.9 is it 5.92 Bond equivalent

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yield so

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we will have what produced us not that

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long ago on a 12-month basis was

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producing 50 million here producing

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something in the area of 5 billion here

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so we're in a position where the

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investment income is essentially well it

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is certain to increase quite a bit

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and insurance underwriting

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is not

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it uh

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it does not correlate

229
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with business activity it depends on

230
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things like hurricanes and earthquakes

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and and other events

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so

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on a prospective basis on a probability

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basis we're likely to have a

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a better year

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uh this year in Insurance underwriting

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than we had last year uh it just isn't

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affected

239
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by what you might call the business

240
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cycle or uh what applies to generally an

241
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industry detailing you name it uh so I

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would expect

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and one

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massive EarthQuaker

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one one hurricane that came into just

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the wrong place

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I would

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can affect that prediction but on a

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probable listing basis our insurance

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looks better this year so if you get two

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of those

252
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two of the elements there of our main

253
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elements of earnings that look like they

254
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will swing in our Direction I would

255
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expect but I can't promise that our

256
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operating earnings will be uh greater

257
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than last year

258
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and if we'll move to

259
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the second slide

260
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uh I give you those operating earnings

261
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figures

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just to give you

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a overview of what has happened

264
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uh

265
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since the pandemic started and off of

266
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the year

267
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the yearbook before as a base

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and

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we retain all our earnings as you know

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so if we're retaining 30 or 35 billion

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or whatever but maybe a year you should

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expect more operating earnings over time

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I mean this I mean this this number

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should be

275
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significantly higher five or 10 or 15

276
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years from now because we have the

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advantage of retaining earnings and

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that's what got us to these figures

279
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because they were essentially nothing

280
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when we started and they got there by

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retaining earnings and we'll keep

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retaining earnings so it's no great

283
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Triumph if these numbers move up and

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what we hope is that they

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move up at a reasonable rate

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historically

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they moved up at an unreasonable rate

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sometimes but we were working with a

289
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much smaller Sons then and that can't be

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repeated with our present Capital base

291
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because I note there

292
00:12:30,240 --> 00:12:33,180
I believe it's on this slide let's take

293
00:12:32,339 --> 00:12:35,279
a look

294
00:12:33,179 --> 00:12:38,359
uh

295
00:12:35,278 --> 00:12:38,360
now that'll be

296
00:12:38,759 --> 00:12:44,159
see it's on the

297
00:12:41,519 --> 00:12:46,860
well on the on the next on the next

298
00:12:44,159 --> 00:12:48,299
place paid and much smoother the next

299
00:12:46,860 --> 00:12:52,139
slide

300
00:12:48,299 --> 00:12:54,419
we showed that we had on March 31st

301
00:12:52,139 --> 00:12:55,940
now 500 and

302
00:12:54,419 --> 00:12:59,099
was it

303
00:12:55,940 --> 00:13:01,680
504 billion

304
00:12:59,100 --> 00:13:04,440
of Gap net worth

305
00:13:01,679 --> 00:13:06,120
now what might surprise you

306
00:13:04,440 --> 00:13:08,880
is that there's no other company in the

307
00:13:06,120 --> 00:13:10,440
United States no other company

308
00:13:08,879 --> 00:13:13,078
that has a number

309
00:13:10,440 --> 00:13:16,200
that is that large now that isn't

310
00:13:13,078 --> 00:13:18,599
because we've got the most valuable

311
00:13:16,200 --> 00:13:20,459
company in the United States

312
00:13:18,600 --> 00:13:22,320
other companies

313
00:13:20,458 --> 00:13:24,259
have used their money to repurchase

314
00:13:22,320 --> 00:13:26,760
shares that they could have accumulated

315
00:13:24,259 --> 00:13:30,059
504 billion in gap

316
00:13:26,759 --> 00:13:32,220
but basically we have more

317
00:13:30,059 --> 00:13:36,119
under Gap accounting now

318
00:13:32,220 --> 00:13:38,399
than any other company in the US and of

319
00:13:36,120 --> 00:13:40,560
course if you measure return on

320
00:13:38,399 --> 00:13:42,240
on Equity that becomes a very big number

321
00:13:40,559 --> 00:13:45,439
to increase

322
00:13:42,240 --> 00:13:49,200
at a rapid rate but we hope to do so

323
00:13:45,440 --> 00:13:52,260
uh not a rapid rate additional rate

324
00:13:49,200 --> 00:13:54,600
um and right below that you see

325
00:13:52,259 --> 00:13:56,458
something called float

326
00:13:54,600 --> 00:13:58,200
and float

327
00:13:56,458 --> 00:13:59,458
is money

328
00:13:58,200 --> 00:14:03,360
that

329
00:13:59,458 --> 00:14:06,899
uh is left in our hands

330
00:14:03,360 --> 00:14:09,659
uh somewhat Akin

331
00:14:06,899 --> 00:14:12,500
but very importantly different

332
00:14:09,659 --> 00:14:14,759
a little bank deposit but it

333
00:14:12,500 --> 00:14:16,500
you have to pay interest to get a bank

334
00:14:14,759 --> 00:14:17,819
deposit you have to pay more interests

335
00:14:16,500 --> 00:14:20,759
these days and you have to run a bank

336
00:14:17,820 --> 00:14:24,899
and do a lot of things and

337
00:14:20,759 --> 00:14:28,319
basically this is money that represents

338
00:14:24,899 --> 00:14:30,419
unpaid losses at this time you get paid

339
00:14:28,320 --> 00:14:33,720
in advance in insurance

340
00:14:30,419 --> 00:14:35,879
so what shows up as a net liability

341
00:14:33,720 --> 00:14:39,540
on our balance sheet

342
00:14:35,879 --> 00:14:42,419
is gives us funds uh

343
00:14:39,539 --> 00:14:43,980
do exercise with an amount of discretion

344
00:14:42,419 --> 00:14:45,838
that no other

345
00:14:43,980 --> 00:14:48,180
insurance company that I know of in the

346
00:14:45,839 --> 00:14:49,560
world enjoys just because we have so

347
00:14:48,179 --> 00:14:51,419
much net worth

348
00:14:49,559 --> 00:14:54,539
and our float now

349
00:14:51,419 --> 00:14:56,939
comes to 165 billion

350
00:14:54,539 --> 00:14:59,578
and the man sitting on the far left is

351
00:14:56,940 --> 00:15:00,899
responsible for moving that number up

352
00:14:59,578 --> 00:15:03,239
from a pittance

353
00:15:00,899 --> 00:15:07,078
in 1986

354
00:15:03,240 --> 00:15:10,440
to this incredible figure which in most

355
00:15:07,078 --> 00:15:12,838
years practically all years

356
00:15:10,440 --> 00:15:15,959
hasn't cost us anything so it's like

357
00:15:12,839 --> 00:15:16,980
having a bank with no employees no

358
00:15:15,958 --> 00:15:20,458
interest

359
00:15:16,980 --> 00:15:23,278
and no ability to withdraw

360
00:15:20,458 --> 00:15:27,479
the money in a hurry

361
00:15:23,278 --> 00:15:31,259
that we have working for us and it's a

362
00:15:27,480 --> 00:15:36,920
very valuable asset that uh

363
00:15:31,259 --> 00:15:36,919
that shows up as a liability and uh

364
00:15:37,139 --> 00:15:44,180
Ajit is responsible for building up this

365
00:15:42,839 --> 00:15:47,220
treasure

366
00:15:44,179 --> 00:15:50,458
uh which has done been done by

367
00:15:47,220 --> 00:15:52,560
out competing insurance companies all

368
00:15:50,458 --> 00:15:54,778
over the world and then now a number of

369
00:15:52,559 --> 00:15:57,059
our insurance companies in turn are run

370
00:15:54,778 --> 00:15:58,919
by talented managers

371
00:15:57,059 --> 00:16:00,719
who contributed

372
00:15:58,919 --> 00:16:03,419
one way or another

373
00:16:00,720 --> 00:16:06,800
uh start with Geico

374
00:16:03,419 --> 00:16:09,059
the beginning of my career and the uh

375
00:16:06,799 --> 00:16:10,979
that float

376
00:16:09,059 --> 00:16:13,078
if you think about it just think of a

377
00:16:10,980 --> 00:16:14,879
balance sheet you've got liabilities

378
00:16:13,078 --> 00:16:17,819
here and you got assets over here and

379
00:16:14,879 --> 00:16:21,120
and the liability side finances the

380
00:16:17,820 --> 00:16:22,980
asset side is very simple and

381
00:16:21,120 --> 00:16:25,560
stockholders Equity finances it

382
00:16:22,980 --> 00:16:28,379
long-term debt finances and so on but

383
00:16:25,559 --> 00:16:29,698
stockholders Equity is very expensive in

384
00:16:28,379 --> 00:16:32,159
a real sense

385
00:16:29,698 --> 00:16:34,259
long-term debt has been cheap for a

386
00:16:32,159 --> 00:16:35,458
while but it can get expensive and it

387
00:16:34,259 --> 00:16:38,639
can also become

388
00:16:35,458 --> 00:16:39,719
do eventually and if and it may not be

389
00:16:38,639 --> 00:16:42,360
available

390
00:16:39,720 --> 00:16:44,820
uh but float

391
00:16:42,360 --> 00:16:47,300
is another item that shows a it's a

392
00:16:44,820 --> 00:16:52,199
liability but hasn't cost us anything

393
00:16:47,299 --> 00:16:55,379
and it it can't disappear in a hurry and

394
00:16:52,198 --> 00:16:57,240
it finances the asset side in the same

395
00:16:55,379 --> 00:16:59,820
way as stockholders equity

396
00:16:57,240 --> 00:17:02,039
and nobody else thinks of it much that

397
00:16:59,820 --> 00:17:04,220
way but but we've always thought of it

398
00:17:02,039 --> 00:17:06,659
that way and it's built up over time so

399
00:17:04,220 --> 00:17:09,240
uh I show at the bottom what's happened

400
00:17:06,660 --> 00:17:12,058
with cash and treasury bills

401
00:17:09,240 --> 00:17:13,199
through March 31st and I will tell you

402
00:17:12,058 --> 00:17:15,240
that the

403
00:17:13,199 --> 00:17:17,539
in the month of April

404
00:17:15,240 --> 00:17:19,140
we probably

405
00:17:17,539 --> 00:17:21,659
added

406
00:17:19,140 --> 00:17:23,459
about seven billion dollars to that

407
00:17:21,660 --> 00:17:25,259
factor now part of that is because we

408
00:17:23,459 --> 00:17:28,140
didn't buy as much stock because that

409
00:17:25,259 --> 00:17:30,419
reduces reduces cash and treasury bills

410
00:17:28,140 --> 00:17:32,040
we bought about 400 million dollars

411
00:17:30,419 --> 00:17:35,160
worth of stock in the month of April

412
00:17:32,039 --> 00:17:39,558
that's that's a minus uh in terms of

413
00:17:35,160 --> 00:17:41,720
cash available and uh

414
00:17:39,558 --> 00:17:45,000
we we

415
00:17:41,720 --> 00:17:47,279
however sold net some stock which

416
00:17:45,000 --> 00:17:48,960
produced maybe 4 billion and of course

417
00:17:47,279 --> 00:17:50,038
we had operating earnings probably two

418
00:17:48,960 --> 00:17:52,200
and a half

419
00:17:50,038 --> 00:17:54,660
billion or something in that area and my

420
00:17:52,200 --> 00:17:57,660
guess is we probably increased our cash

421
00:17:54,660 --> 00:18:01,500
and treasury bills uh six and seven

422
00:17:57,660 --> 00:18:03,480
billion in the month and uh I just want

423
00:18:01,500 --> 00:18:04,558
to give you a feel for other cash flows

424
00:18:03,480 --> 00:18:07,019
at Berkshire

425
00:18:04,558 --> 00:18:08,940
and then if we move to the final I think

426
00:18:07,019 --> 00:18:11,940
it's the final one next to the last one

427
00:18:08,940 --> 00:18:11,940
uh

428
00:18:14,400 --> 00:18:18,120
no I I think it is the last let's see

429
00:18:16,679 --> 00:18:21,059
it's the fourth

430
00:18:18,119 --> 00:18:22,558
yeah is this we should have the one of

431
00:18:21,058 --> 00:18:25,740
their class a equivalent shares

432
00:18:22,558 --> 00:18:28,139
outstanding and and uh

433
00:18:25,740 --> 00:18:30,419
you'll notice that every year

434
00:18:28,140 --> 00:18:32,580
the number of our shares go down so if

435
00:18:30,419 --> 00:18:34,380
we own more businesses and the

436
00:18:32,579 --> 00:18:37,980
businesses make more money

437
00:18:34,380 --> 00:18:41,880
your chair as shareholders as owners

438
00:18:37,980 --> 00:18:43,679
a Berkshire increases every year without

439
00:18:41,880 --> 00:18:45,780
you laying out any money now you're

440
00:18:43,679 --> 00:18:47,038
laying out the

441
00:18:45,779 --> 00:18:49,200
the

442
00:18:47,038 --> 00:18:52,019
alternative which you could receive in

443
00:18:49,200 --> 00:18:54,480
dividends but the reason we've gotten to

444
00:18:52,019 --> 00:18:57,660
where we are is because we

445
00:18:54,480 --> 00:18:59,160
we kept the money we did pay a dividend

446
00:18:57,660 --> 00:19:01,740
in nineteen

447
00:18:59,160 --> 00:19:06,000
sixty seven ten cents to share

448
00:19:01,740 --> 00:19:08,579
it was a terrible mistake and I

449
00:19:06,000 --> 00:19:10,859
I always tell people that I I'd love for

450
00:19:08,579 --> 00:19:12,119
the men's room and the directors voted

451
00:19:10,859 --> 00:19:15,719
it while I was gone but that isn't true

452
00:19:12,119 --> 00:19:18,119
I was there I confessed they uh but we

453
00:19:15,720 --> 00:19:20,700
were invested and has produced the

454
00:19:18,119 --> 00:19:23,038
500 billion possible shareholders equity

455
00:19:20,700 --> 00:19:26,160
in the 30 billion plus of operating

456
00:19:23,038 --> 00:19:27,960
earnings and and we'll continue to

457
00:19:26,160 --> 00:19:30,960
follow that policy because it makes a

458
00:19:27,960 --> 00:19:32,700
great deal of sense and uh

459
00:19:30,960 --> 00:19:34,319
with that

460
00:19:32,700 --> 00:19:37,798
I think we've taken care of the

461
00:19:34,319 --> 00:19:40,319
preliminaries you can study that the 10q

462
00:19:37,798 --> 00:19:41,779
is is on the uh

463
00:19:40,319 --> 00:19:46,319
on the

464
00:19:41,779 --> 00:19:49,079
web page and if you have a

465
00:19:46,319 --> 00:19:51,480
week or two vacation you could spend it

466
00:19:49,079 --> 00:19:52,980
reading the 10-q and but that is the

467
00:19:51,480 --> 00:19:53,940
essence of Berkshire and with that I

468
00:19:52,980 --> 00:19:57,660
will

469
00:19:53,940 --> 00:20:01,620
start with Becky quick and and uh we

470
00:19:57,660 --> 00:20:04,798
will alternate between Becky and and the

471
00:20:01,619 --> 00:20:06,178
audience and her questions have come in

472
00:20:04,798 --> 00:20:09,480
from all over the country and I believe

473
00:20:06,179 --> 00:20:12,059
you identified the center and go to it

474
00:20:09,480 --> 00:20:14,279
Becky thanks Warren the first question

475
00:20:12,058 --> 00:20:16,859
comes in from Randy Jeffs in Irvine

476
00:20:14,279 --> 00:20:19,079
California and his question is if

477
00:20:16,859 --> 00:20:20,939
Silicon Valley Bank's deposit had not

478
00:20:19,079 --> 00:20:22,558
been fully covered what do you think the

479
00:20:20,940 --> 00:20:24,900
economic consequences would have been to

480
00:20:22,558 --> 00:20:28,319
the nation

481
00:20:24,900 --> 00:20:31,200
well I've just simply say it would have

482
00:20:28,319 --> 00:20:34,980
been catastrophic and that's why they

483
00:20:31,200 --> 00:20:39,058
were covered uh and even though the FDIC

484
00:20:34,980 --> 00:20:41,519
limit is 250 000 that that's the way the

485
00:20:39,058 --> 00:20:43,379
statute reads but that is not the way

486
00:20:41,519 --> 00:20:45,660
the us is going to behave

487
00:20:43,380 --> 00:20:49,919
uh any more than they're going to let

488
00:20:45,660 --> 00:20:54,538
the debt ceiling uh uh cause the world

489
00:20:49,919 --> 00:20:54,538
to go into turmoil and they

490
00:20:55,019 --> 00:20:59,519
ah

491
00:20:56,700 --> 00:21:01,798
well they're just I I can't imagine

492
00:20:59,519 --> 00:21:03,960
anybody

493
00:21:01,798 --> 00:21:06,359
in the administration and the Congress

494
00:21:03,960 --> 00:21:09,360
and the Federal Reserve whatever it may

495
00:21:06,359 --> 00:21:12,000
have been FDIC I can't imagine anybody's

496
00:21:09,359 --> 00:21:13,740
saying uh I'd like to be the one on

497
00:21:12,000 --> 00:21:17,220
television tomorrow and explain the

498
00:21:13,740 --> 00:21:19,620
American public why we're keeping uh

499
00:21:17,220 --> 00:21:21,720
uh only two hundred and fifty thousand

500
00:21:19,619 --> 00:21:23,519
dollars insured and we're gonna start

501
00:21:21,720 --> 00:21:27,120
around every Bank in the country and

502
00:21:23,519 --> 00:21:30,538
disrupt the world financial system uh so

503
00:21:27,119 --> 00:21:32,839
uh I think it was inevitable Charlie do

504
00:21:30,538 --> 00:21:32,839
you have any

505
00:21:33,480 --> 00:21:40,319
no I have nothing to add okay well

506
00:21:37,440 --> 00:21:44,038
uh incidentally I should mention this

507
00:21:40,319 --> 00:21:46,200
now ajeed and Greg will be here in the

508
00:21:44,038 --> 00:21:49,379
morning session which ends at noon and

509
00:21:46,200 --> 00:21:51,840
so uh if you've got questions to direct

510
00:21:49,380 --> 00:21:53,460
to them the time to do it is in the

511
00:21:51,839 --> 00:21:55,199
first half of the show and and then

512
00:21:53,460 --> 00:21:58,380
after lunch

513
00:21:55,200 --> 00:22:00,419
it'll uh just Charlie and I will be back

514
00:21:58,380 --> 00:22:02,760
okay

515
00:22:00,419 --> 00:22:06,200
area one

516
00:22:02,759 --> 00:22:10,019
hi nirav Patel Haverhill Massachusetts

517
00:22:06,200 --> 00:22:13,140
Mr Buffett Mr Monger it seems like you

518
00:22:10,019 --> 00:22:15,779
found the Sweet Spot between being being

519
00:22:13,140 --> 00:22:17,100
too conservative and too aggressive as

520
00:22:15,779 --> 00:22:19,259
investors

521
00:22:17,099 --> 00:22:21,839
do you ever make bad investment

522
00:22:19,259 --> 00:22:24,298
decisions because of your emotions and

523
00:22:21,839 --> 00:22:26,658
what do you do to try to keep that from

524
00:22:24,298 --> 00:22:26,658
happening

525
00:22:28,259 --> 00:22:33,839
well we make

526
00:22:30,240 --> 00:22:35,640
bad investment decisions uh

527
00:22:33,839 --> 00:22:37,678
plenty of times I make more than Charlie

528
00:22:35,640 --> 00:22:39,538
because I'm I like to think it's because

529
00:22:37,679 --> 00:22:43,980
I make more decisions but the public

530
00:22:39,538 --> 00:22:43,980
normatic average is worse but

531
00:22:44,759 --> 00:22:49,980
I can't recall

532
00:22:48,000 --> 00:22:52,500
anytime

533
00:22:49,980 --> 00:22:55,319
in the history of Berkshire

534
00:22:52,500 --> 00:22:57,179
that we made an emotional decision that

535
00:22:55,319 --> 00:23:00,619
I know the movie had Jamie Lee in there

536
00:22:57,179 --> 00:23:03,600
but that that was for Laughs

537
00:23:00,619 --> 00:23:06,298
I mean Jamie

538
00:23:03,599 --> 00:23:09,240
Jamie Lee she's good but she's not good

539
00:23:06,298 --> 00:23:12,079
enough to get me or Charlie to make an

540
00:23:09,240 --> 00:23:12,079
emotional decision

541
00:23:12,579 --> 00:23:18,058
[Applause]

542
00:23:16,619 --> 00:23:19,739
Charlie

543
00:23:18,058 --> 00:23:21,980
I'm sure you have something to add on

544
00:23:19,740 --> 00:23:21,980
that

545
00:23:24,119 --> 00:23:29,000
well it's a different movie than it is

546
00:23:27,298 --> 00:23:31,379
shown in the most corporate meetings

547
00:23:29,000 --> 00:23:33,298
[Laughter]

548
00:23:31,380 --> 00:23:37,020
but have we ever made an emotional

549
00:23:33,298 --> 00:23:38,700
decision no no

550
00:23:37,019 --> 00:23:40,619
that's in business we're talking about

551
00:23:38,700 --> 00:23:42,419
yeah

552
00:23:40,619 --> 00:23:44,759
yeah no you don't want to be a no

553
00:23:42,419 --> 00:23:46,980
emotion person in all of your life but

554
00:23:44,759 --> 00:23:49,079
you you definitely want to be a no more

555
00:23:46,980 --> 00:23:52,919
no emotion person of making an

556
00:23:49,079 --> 00:23:57,058
investment or business decision that uh

557
00:23:52,919 --> 00:23:59,880
you can argue that that uh uh

558
00:23:57,058 --> 00:24:03,418
with it

559
00:23:59,880 --> 00:24:07,080
we probably I would say that we

560
00:24:03,419 --> 00:24:10,140
've made an emotional decision perhaps

561
00:24:07,079 --> 00:24:11,460
and when a manager has been with us for

562
00:24:10,140 --> 00:24:13,380
some period

563
00:24:11,460 --> 00:24:15,179
and we haven't

564
00:24:13,380 --> 00:24:18,840
we've

565
00:24:15,179 --> 00:24:20,940
we we've ignored the fact

566
00:24:18,839 --> 00:24:21,959
that perhaps they weren't quite what

567
00:24:20,940 --> 00:24:25,320
they were

568
00:24:21,960 --> 00:24:28,620
earlier but our businesses are so good

569
00:24:25,319 --> 00:24:32,399
that they they've run better sometimes

570
00:24:28,619 --> 00:24:34,500
when uh you know I've talked about

571
00:24:32,400 --> 00:24:36,480
West Coast for example the wonderful

572
00:24:34,500 --> 00:24:37,919
Louisville

573
00:24:36,480 --> 00:24:40,259
it ran on

574
00:24:37,919 --> 00:24:41,820
it ran on automatic pilot

575
00:24:40,259 --> 00:24:44,158
for a while but I don't think we

576
00:24:41,819 --> 00:24:47,339
suffered by it but you're going to argue

577
00:24:44,159 --> 00:24:49,140
that if Charlie and I hadn't liked Louie

578
00:24:47,339 --> 00:24:50,399
as much as we did we might have spotted

579
00:24:49,140 --> 00:24:52,020
a little bit early but I don't think it

580
00:24:50,400 --> 00:24:55,080
made any difference in the results would

581
00:24:52,019 --> 00:24:57,900
you would you agree with that Charlie

582
00:24:55,079 --> 00:25:00,500
yeah yeah you'd be totally with it

583
00:24:57,900 --> 00:25:00,500
and

584
00:25:01,500 --> 00:25:04,679
I'm glad I'm glad we behaved the way we

585
00:25:03,419 --> 00:25:08,100
did at Wesco

586
00:25:04,679 --> 00:25:10,860
by the way we bought the thing for a few

587
00:25:08,099 --> 00:25:13,439
tens of millions and it became worth two

588
00:25:10,859 --> 00:25:15,359
or three billion

589
00:25:13,440 --> 00:25:17,159
yeah that wasn't common in the Savings

590
00:25:15,359 --> 00:25:20,699
and Loan businesses you may have noticed

591
00:25:17,159 --> 00:25:23,520
and they don't want they really want

592
00:25:20,700 --> 00:25:25,679
crazy in that industry and and we had a

593
00:25:23,519 --> 00:25:28,558
wonderful guy in Louis and we didn't go

594
00:25:25,679 --> 00:25:30,559
crazy yeah we didn't go crazy

595
00:25:28,558 --> 00:25:30,558
um

596
00:25:30,960 --> 00:25:35,819
okay Becky

597
00:25:33,179 --> 00:25:37,679
this question comes from Ben Knoll in

598
00:25:35,819 --> 00:25:39,720
Minneapolis he says he's a Berkshire

599
00:25:37,679 --> 00:25:41,400
shareholder of three decades and he's

600
00:25:39,720 --> 00:25:42,839
attended many Berkshire meetings he's

601
00:25:41,400 --> 00:25:45,360
here again this year

602
00:25:42,839 --> 00:25:47,939
and this is addressed to Ajit and Greg

603
00:25:45,359 --> 00:25:50,278
he says last year I asked you about how

604
00:25:47,940 --> 00:25:52,440
Geico and BNSF appeared to lose ground

605
00:25:50,278 --> 00:25:54,538
to their leading competitors Geico on

606
00:25:52,440 --> 00:25:57,120
telematics and BNSF on Precision

607
00:25:54,538 --> 00:25:59,158
scheduled railroading Ajit you responded

608
00:25:57,119 --> 00:26:01,439
by saying how you expected Geico to make

609
00:25:59,159 --> 00:26:03,419
progress in a year or two Greg you spoke

610
00:26:01,440 --> 00:26:05,159
about your pride in BNSF but you didn't

611
00:26:03,419 --> 00:26:07,380
directly address the threat of

612
00:26:05,159 --> 00:26:09,000
precision's scheduled railroading will

613
00:26:07,380 --> 00:26:11,220
each of you please provide perspective

614
00:26:09,000 --> 00:26:14,960
on these competitive challenges and our

615
00:26:11,220 --> 00:26:14,960
company's strategies to address them

616
00:26:16,278 --> 00:26:19,460
let me

617
00:26:19,980 --> 00:26:25,500
in terms of Geico and telematics let me

618
00:26:23,159 --> 00:26:27,480
make the observation that Geico has

619
00:26:25,500 --> 00:26:29,819
certainly taken the ball by the horns

620
00:26:27,480 --> 00:26:31,380
and has made rapid strides in terms of

621
00:26:29,819 --> 00:26:33,538
trying to bridge the gap

622
00:26:31,380 --> 00:26:35,100
in terms of telematics and its

623
00:26:33,538 --> 00:26:37,919
competitors

624
00:26:35,099 --> 00:26:39,899
they have now reached a point where on

625
00:26:37,919 --> 00:26:44,400
all new business

626
00:26:39,900 --> 00:26:47,340
close to 90 percent is has a telematics

627
00:26:44,400 --> 00:26:49,679
input to to the pricing decision

628
00:26:47,339 --> 00:26:53,038
unfortunately less than half of that is

629
00:26:49,679 --> 00:26:54,298
being taken up by the policyholders the

630
00:26:53,038 --> 00:26:57,240
other point I want to make is even

631
00:26:54,298 --> 00:26:59,879
though we have made improvements in in

632
00:26:57,240 --> 00:27:02,940
terms of Bridging the Gap on telematics

633
00:26:59,880 --> 00:27:05,760
we still haven't started to realize the

634
00:27:02,940 --> 00:27:08,038
true benefit and the real culprit or the

635
00:27:05,759 --> 00:27:10,558
bottleneck is technology

636
00:27:08,038 --> 00:27:13,379
Geico's technology needs a lot more work

637
00:27:10,558 --> 00:27:15,359
than I thought it did it has more than

638
00:27:13,380 --> 00:27:17,580
500 actually more than 600 Legacy

639
00:27:15,359 --> 00:27:20,219
systems that don't really talk to each

640
00:27:17,579 --> 00:27:22,460
other and we are trying to compress them

641
00:27:20,220 --> 00:27:24,720
to no more than 15 16

642
00:27:22,460 --> 00:27:26,759
systems that all talk to each other

643
00:27:24,720 --> 00:27:28,980
that's a Monumental Challenge and

644
00:27:26,759 --> 00:27:30,658
because of that even though we have made

645
00:27:28,980 --> 00:27:32,159
improvements in telematics we still have

646
00:27:30,659 --> 00:27:34,380
a long way to go

647
00:27:32,159 --> 00:27:35,880
because of Technology

648
00:27:34,380 --> 00:27:38,100
uh

649
00:27:35,880 --> 00:27:40,320
because of that and because of the whole

650
00:27:38,099 --> 00:27:43,259
issue more broadly in terms of matching

651
00:27:40,319 --> 00:27:44,099
rate to risk Geico is still work in

652
00:27:43,259 --> 00:27:45,720
progress

653
00:27:44,099 --> 00:27:46,798
I don't know if you any of you had a

654
00:27:45,720 --> 00:27:49,679
chance to look at the first quarter

655
00:27:46,798 --> 00:27:51,778
results but Geico has had a very good

656
00:27:49,679 --> 00:27:54,240
first quarter coming in at a combined

657
00:27:51,778 --> 00:27:56,538
ratio of 93 and change which means a

658
00:27:54,240 --> 00:27:58,980
margin of six and change

659
00:27:56,538 --> 00:28:00,419
even though that's very good it's not

660
00:27:58,980 --> 00:28:03,120
something we can take to the bank

661
00:28:00,419 --> 00:28:06,720
because they're two unusual items that

662
00:28:03,119 --> 00:28:08,759
contributed to it firstly we've had what

663
00:28:06,720 --> 00:28:10,558
is called prior year Reserve releases

664
00:28:08,759 --> 00:28:13,079
we've reduced results for the previous

665
00:28:10,558 --> 00:28:14,759
years and that contributed to it and

666
00:28:13,079 --> 00:28:17,399
secondly every year the first quarter

667
00:28:14,759 --> 00:28:19,980
tends to be a seasonally good quota for

668
00:28:17,400 --> 00:28:22,860
auto insurance writers

669
00:28:19,980 --> 00:28:24,599
so if you just for those two factors my

670
00:28:22,859 --> 00:28:27,240
guess is the end of the year Geico will

671
00:28:24,599 --> 00:28:30,359
end up with a combined ratio just south

672
00:28:27,240 --> 00:28:32,460
of 100 as opposed to the Target they're

673
00:28:30,359 --> 00:28:35,699
shooting for 96.

674
00:28:32,460 --> 00:28:37,319
I hope they reach the target of 96 by

675
00:28:35,700 --> 00:28:40,200
the end of next year

676
00:28:37,319 --> 00:28:41,759
uh and but instead of getting too

677
00:28:40,200 --> 00:28:44,519
excited about it I think it's important

678
00:28:41,759 --> 00:28:46,200
to realize that even if we reach 96 it

679
00:28:44,519 --> 00:28:49,679
will come at the expense of

680
00:28:46,200 --> 00:28:52,140
having lost policy holders there is a

681
00:28:49,679 --> 00:28:54,600
trade-off between profitability and

682
00:28:52,140 --> 00:28:56,600
growth and clearly we have we're going

683
00:28:54,599 --> 00:28:58,619
to emphasize

684
00:28:56,599 --> 00:29:00,538
profitability and not growth and that

685
00:28:58,619 --> 00:29:02,579
will come at the expense of policyholder

686
00:29:00,538 --> 00:29:04,919
so it will not be until two years from

687
00:29:02,579 --> 00:29:07,079
now that we'll be back on track fighting

688
00:29:04,919 --> 00:29:09,538
the battles on both the profitability

689
00:29:07,079 --> 00:29:11,819
and the growth front

690
00:29:09,538 --> 00:29:15,359
okay yep

691
00:29:11,819 --> 00:29:17,399
moving to BNSF

692
00:29:15,359 --> 00:29:19,500
I'll start again by expressing great

693
00:29:17,400 --> 00:29:22,200
pride in the BNSF team we have an

694
00:29:19,500 --> 00:29:25,140
exceptional group of led by Katie and

695
00:29:22,200 --> 00:29:27,419
and her managers that uh show up every

696
00:29:25,140 --> 00:29:29,640
day to do great work on on the railroad

697
00:29:27,419 --> 00:29:31,620
at the same time they would be the first

698
00:29:29,640 --> 00:29:34,679
to acknowledge there's more to be done

699
00:29:31,619 --> 00:29:38,278
there uh the specific reference to

700
00:29:34,679 --> 00:29:42,659
Precision scheduled railroading uh the

701
00:29:38,278 --> 00:29:44,579
other large railroad Class A uh on the

702
00:29:42,659 --> 00:29:47,520
railroads in the in the U.S follow that

703
00:29:44,579 --> 00:29:49,558
and including the two in Canada we're

704
00:29:47,519 --> 00:29:52,500
well aware of what they're doing and and

705
00:29:49,558 --> 00:29:54,418
obviously pay close attention to their

706
00:29:52,500 --> 00:29:56,398
operating Matrix and our team strives

707
00:29:54,419 --> 00:29:59,100
every day to be more efficient obviously

708
00:29:56,398 --> 00:30:00,839
I would say we balance it with the needs

709
00:29:59,099 --> 00:30:03,558
of our customers

710
00:30:00,839 --> 00:30:06,599
if I look back to

711
00:30:03,558 --> 00:30:12,178
pre-2022 so we look at the three-year

712
00:30:06,599 --> 00:30:14,339
period of 2019 2020 2021 the BNSF team

713
00:30:12,179 --> 00:30:17,640
made significant progress on their

714
00:30:14,339 --> 00:30:19,740
efficiencies and and and delivering

715
00:30:17,640 --> 00:30:22,200
overall value back to the shareholders

716
00:30:19,740 --> 00:30:23,640
and and to their customers and at the

717
00:30:22,200 --> 00:30:25,620
same time maintaining a very safe

718
00:30:23,640 --> 00:30:28,020
railroad for our employees so we're

719
00:30:25,619 --> 00:30:30,538
making excellent progress that didn't

720
00:30:28,019 --> 00:30:34,019
stop last year they made great progress

721
00:30:30,538 --> 00:30:36,419
again the reality in 2022 as we did go

722
00:30:34,019 --> 00:30:39,480
through a period of time where we had to

723
00:30:36,419 --> 00:30:41,038
call it reset the railroad we came out

724
00:30:39,480 --> 00:30:43,679
of the pandemic there were the supply

725
00:30:41,038 --> 00:30:45,898
challenges we had certain other issue

726
00:30:43,679 --> 00:30:48,600
labor issues and other things going on

727
00:30:45,898 --> 00:30:51,000
at the port and the reality is our team

728
00:30:48,599 --> 00:30:53,699
prioritized getting the railroad back in

729
00:30:51,000 --> 00:30:55,380
place for the long term not a short-term

730
00:30:53,700 --> 00:30:57,558
focus on hitting certain operating

731
00:30:55,380 --> 00:31:00,179
metrics in in

732
00:30:57,558 --> 00:31:01,980
2022 we're well aware of where we were

733
00:31:00,179 --> 00:31:05,100
relative to those metrics but the real

734
00:31:01,980 --> 00:31:06,720
Focus was to get the railroad reset in a

735
00:31:05,099 --> 00:31:09,178
in a safe manner such that we could

736
00:31:06,720 --> 00:31:12,120
deliver long-term value and long-term

737
00:31:09,179 --> 00:31:13,860
service to our customers and and that's

738
00:31:12,119 --> 00:31:15,898
really what we'll continue to see with

739
00:31:13,859 --> 00:31:18,298
that team they'll be continual progress

740
00:31:15,898 --> 00:31:21,119
there'll be years where it's not as

741
00:31:18,298 --> 00:31:24,179
quickly or even we go backwards but over

742
00:31:21,119 --> 00:31:26,398
the long term we'll be very we'll see

743
00:31:24,179 --> 00:31:28,500
exceptional results from from that team

744
00:31:26,398 --> 00:31:30,959
and and couldn't be more proud that we

745
00:31:28,500 --> 00:31:34,380
have that asset thank you

746
00:31:30,960 --> 00:31:36,298
I wouldn't I would just

747
00:31:34,380 --> 00:31:38,940
well he deserves but both of them

748
00:31:36,298 --> 00:31:41,599
deserve Applause uh the I would like to

749
00:31:38,940 --> 00:31:41,600
add one thing

750
00:31:48,000 --> 00:31:52,380
the

751
00:31:50,159 --> 00:31:55,500
and Geico

752
00:31:52,380 --> 00:31:58,260
dot Combs

753
00:31:55,500 --> 00:32:01,019
was Jake's Choice my choice

754
00:31:58,259 --> 00:32:04,259
go back to guy at Geico

755
00:32:01,019 --> 00:32:07,379
to work on the problem of matching

756
00:32:04,259 --> 00:32:09,419
rate to risk which is what

757
00:32:07,380 --> 00:32:12,299
insurance is all about

758
00:32:09,419 --> 00:32:13,980
and uh

759
00:32:12,298 --> 00:32:16,019
he arrived

760
00:32:13,980 --> 00:32:18,298
with exquisite timing right before the

761
00:32:16,019 --> 00:32:21,240
pandemic broke out and all kinds of

762
00:32:18,298 --> 00:32:25,619
things changed but Todd is doing

763
00:32:21,240 --> 00:32:26,819
a wonderful job at Geico and and he

764
00:32:25,619 --> 00:32:31,859
works closely

765
00:32:26,819 --> 00:32:33,599
uh with the Jeep because he saw his home

766
00:32:31,859 --> 00:32:35,398
and all Mulligan comes back here and we

767
00:32:33,599 --> 00:32:38,119
we get together on the weekend

768
00:32:35,398 --> 00:32:40,319
sometimes too so uh

769
00:32:38,119 --> 00:32:42,479
that's been a

770
00:32:40,319 --> 00:32:45,058
a remarkable com accomplishment under

771
00:32:42,480 --> 00:32:47,339
difficult circumstances and he's not all

772
00:32:45,058 --> 00:32:50,058
the way home but he said he just made a

773
00:32:47,339 --> 00:32:54,000
very very big change

774
00:32:50,058 --> 00:32:56,398
uh in multiple ways at Geico and then

775
00:32:54,000 --> 00:32:57,740
one other thing I would like to mention

776
00:32:56,398 --> 00:33:02,719
there have been a lot of public

777
00:32:57,740 --> 00:33:05,058
companies created in the last decade

778
00:33:02,720 --> 00:33:09,240
thereabouts in insurance

779
00:33:05,058 --> 00:33:10,980
and uh there's none of them

780
00:33:09,240 --> 00:33:14,038
that we would

781
00:33:10,980 --> 00:33:14,759
like to own and and they always started

782
00:33:14,038 --> 00:33:16,619
out

783
00:33:14,759 --> 00:33:18,599
in their perspective saying this is a

784
00:33:16,619 --> 00:33:20,219
tech company not an insurance company of

785
00:33:18,599 --> 00:33:22,918
course we're of course they're in a tech

786
00:33:20,220 --> 00:33:25,019
company with it everybody's

787
00:33:22,919 --> 00:33:28,320
whether they're in insurance or a lot of

788
00:33:25,019 --> 00:33:30,240
other places are using the facility but

789
00:33:28,319 --> 00:33:36,298
you still have to properly match rate to

790
00:33:30,240 --> 00:33:38,339
risk and uh uh that they invariably have

791
00:33:36,298 --> 00:33:39,480
reported a huge losses they've eaten up

792
00:33:38,339 --> 00:33:42,000
capital

793
00:33:39,480 --> 00:33:43,919
but there's been one company that nobody

794
00:33:42,000 --> 00:33:45,298
has generally heard of there's only been

795
00:33:43,919 --> 00:33:48,320
one that I know of

796
00:33:45,298 --> 00:33:53,278
company started in the last 10 years

797
00:33:48,319 --> 00:33:55,500
that has been a overwhelming success and

798
00:33:53,278 --> 00:33:58,919
that's a company that Ajit

799
00:33:55,500 --> 00:34:00,898
and four people who join with them set

800
00:33:58,919 --> 00:34:03,600
to develop a new business

801
00:34:00,898 --> 00:34:05,699
it's called Berkshire Hathaway specialty

802
00:34:03,599 --> 00:34:06,658
it now has

803
00:34:05,700 --> 00:34:10,079
yeah

804
00:34:06,659 --> 00:34:13,858
what's the float a Jeep coming up to 12

805
00:34:10,079 --> 00:34:15,418
billion yeah yeah we've we've built more

806
00:34:13,858 --> 00:34:17,059
slope than probably all these companies

807
00:34:15,418 --> 00:34:19,679
combined

808
00:34:17,059 --> 00:34:22,440
we've now

809
00:34:19,679 --> 00:34:24,358
it it's cost us essentially nothing in

810
00:34:22,440 --> 00:34:26,220
terms of an underwriting loss

811
00:34:24,358 --> 00:34:29,219
the four people have turned in I don't

812
00:34:26,219 --> 00:34:32,398
know 1500 around the world we we took on

813
00:34:29,219 --> 00:34:35,299
the whole industry and we brought

814
00:34:32,398 --> 00:34:35,299
some unique

815
00:34:35,940 --> 00:34:40,619
talent and the four people that came and

816
00:34:38,280 --> 00:34:43,919
now have like you said 1500 or so

817
00:34:40,619 --> 00:34:45,000
worldwide and we brought capital and we

818
00:34:43,918 --> 00:34:46,500
brought

819
00:34:45,000 --> 00:34:50,398
okay

820
00:34:46,500 --> 00:34:53,760
capabilities that really only Berkshire

821
00:34:50,398 --> 00:34:55,199
could Supply so it was the it was the

822
00:34:53,760 --> 00:34:56,720
combination

823
00:34:55,199 --> 00:35:00,358
of of

824
00:34:56,719 --> 00:35:03,059
brains and talent and energy and money

825
00:35:00,358 --> 00:35:04,440
and no one has really successfully

826
00:35:03,059 --> 00:35:06,480
entered this

827
00:35:04,440 --> 00:35:08,940
this space

828
00:35:06,480 --> 00:35:10,380
plenty of people in the space who didn't

829
00:35:08,940 --> 00:35:13,500
like us coming

830
00:35:10,380 --> 00:35:15,900
and we did it without it

831
00:35:13,500 --> 00:35:19,559
costing us a dime of Entry

832
00:35:15,900 --> 00:35:21,720
and it's been unmatched by any of the

833
00:35:19,559 --> 00:35:25,380
public companies that went public

834
00:35:21,719 --> 00:35:27,539
and people who've seen us do it but they

835
00:35:25,380 --> 00:35:31,440
can't duplicate it and that's

836
00:35:27,539 --> 00:35:33,659
what Vegeta's created and Peter Eastwood

837
00:35:31,440 --> 00:35:37,559
has led this group Berkshire Hathaway

838
00:35:33,659 --> 00:35:40,739
specially and uh it's just remarkable so

839
00:35:37,559 --> 00:35:42,170
anyway with that let's go on yeah we'll

840
00:35:40,739 --> 00:35:42,429
give him a hand for that

841
00:35:42,170 --> 00:35:45,590
[Applause]

842
00:35:42,429 --> 00:35:45,589
[Music]

843
00:35:46,739 --> 00:35:50,419
okay let's go to section two

844
00:35:55,858 --> 00:35:58,880
hi Charlie

845
00:35:57,599 --> 00:36:02,960
I'm

846
00:35:58,880 --> 00:36:02,960
Lorenz I'm Karen here

847
00:36:05,239 --> 00:36:12,719
your priorities are right

848
00:36:08,940 --> 00:36:16,139
yes I have questions on AI and Robotics

849
00:36:12,719 --> 00:36:19,259
here's my questions as Ai and Robotics

850
00:36:16,139 --> 00:36:21,900
continue to advance what do you believe

851
00:36:19,260 --> 00:36:24,359
will be the positive and an active

852
00:36:21,900 --> 00:36:27,240
impact of this technology

853
00:36:24,358 --> 00:36:30,239
on both the stocks markets and society

854
00:36:27,239 --> 00:36:32,879
as a whole and are there any specific

855
00:36:30,239 --> 00:36:36,919
Industrials and companies that you

856
00:36:32,880 --> 00:36:36,920
believe will be most impacted

857
00:36:39,659 --> 00:36:44,420
Karen I thank you for asking Charlie

858
00:36:41,760 --> 00:36:44,420
that question

859
00:36:51,420 --> 00:36:54,420
well

860
00:36:54,900 --> 00:37:01,019
if you went into byd's factories in

861
00:36:58,019 --> 00:37:04,199
China you would see robotics going in

862
00:37:01,019 --> 00:37:07,019
the unbelievable rate

863
00:37:04,199 --> 00:37:08,819
so we're gonna see a lot more robotics

864
00:37:07,019 --> 00:37:10,980
in the world

865
00:37:08,820 --> 00:37:13,740
I am personally

866
00:37:10,980 --> 00:37:15,960
skeptical of some of the hype that has

867
00:37:13,739 --> 00:37:18,299
gone into artificial intelligence

868
00:37:15,960 --> 00:37:20,659
I think old-fashioned intelligence works

869
00:37:18,300 --> 00:37:20,660
pretty well

870
00:37:21,610 --> 00:37:28,858
[Applause]

871
00:37:27,059 --> 00:37:31,078
there won't be a

872
00:37:28,858 --> 00:37:33,299
there won't be anything in AI

873
00:37:31,079 --> 00:37:34,339
that replaces the gene

874
00:37:33,300 --> 00:37:37,440
the

875
00:37:34,338 --> 00:37:41,279
state that unqualifiedly they can do

876
00:37:37,440 --> 00:37:41,280
amazing things uh

877
00:37:41,460 --> 00:37:45,838
you know Bill Gates brought me out of

878
00:37:43,800 --> 00:37:48,660
them out

879
00:37:45,838 --> 00:37:50,820
the latest maybe not the latest version

880
00:37:48,659 --> 00:37:52,519
but one he thought maybe I could handle

881
00:37:50,820 --> 00:37:54,960
which

882
00:37:52,519 --> 00:37:58,500
has to be careful with me in terms of

883
00:37:54,960 --> 00:38:01,679
leading me too fast uh and it did it did

884
00:37:58,500 --> 00:38:04,739
these remarkable things uh it didn't but

885
00:38:01,679 --> 00:38:06,539
it it it couldn't tell jokes Bill told

886
00:38:04,739 --> 00:38:10,379
me that ahead of time and it prepared me

887
00:38:06,539 --> 00:38:11,880
and it it just isn't there but you know

888
00:38:10,380 --> 00:38:14,160
things like

889
00:38:11,880 --> 00:38:14,820
checking all the legal opinions on you

890
00:38:14,159 --> 00:38:16,500
know

891
00:38:14,820 --> 00:38:19,380
since the beginning of time and

892
00:38:16,500 --> 00:38:21,719
everything and eliminating all the

893
00:38:19,380 --> 00:38:24,119
sided I mean it can do all kinds of

894
00:38:21,719 --> 00:38:25,618
things and

895
00:38:24,119 --> 00:38:26,760
when something can do all kinds of

896
00:38:25,619 --> 00:38:30,480
things

897
00:38:26,760 --> 00:38:33,060
I get a little bit worried and because I

898
00:38:30,480 --> 00:38:34,079
know we won't be able to uninvent it and

899
00:38:33,059 --> 00:38:37,199
uh

900
00:38:34,079 --> 00:38:40,560
you know we did invent

901
00:38:37,199 --> 00:38:45,419
uh for very very good reason

902
00:38:40,559 --> 00:38:48,539
the atom bomb and in World War II and it

903
00:38:45,420 --> 00:38:50,519
was you know it was enormously important

904
00:38:48,539 --> 00:38:52,019
that we did so

905
00:38:50,519 --> 00:38:54,179
but

906
00:38:52,019 --> 00:38:57,838
is it good for the next 200 years of the

907
00:38:54,179 --> 00:39:00,118
world that that the ability to do so has

908
00:38:57,838 --> 00:39:03,480
been Unleashed we didn't have a choice

909
00:39:00,119 --> 00:39:05,940
but uh uh

910
00:39:03,480 --> 00:39:07,699
when you start something well Einstein

911
00:39:05,940 --> 00:39:09,900
said after

912
00:39:07,699 --> 00:39:11,519
this has changed everything in the world

913
00:39:09,900 --> 00:39:13,320
except how men think

914
00:39:11,519 --> 00:39:16,679
and uh

915
00:39:13,320 --> 00:39:19,079
I would say the same thing May

916
00:39:16,679 --> 00:39:22,500
not not the same thing I don't mean that

917
00:39:19,079 --> 00:39:25,920
but I mean they with with AI

918
00:39:22,500 --> 00:39:27,059
uh it it can change everything in the

919
00:39:25,920 --> 00:39:28,260
world

920
00:39:27,059 --> 00:39:31,858
except

921
00:39:28,260 --> 00:39:34,920
how men think and behave and

922
00:39:31,858 --> 00:39:37,259
that's that's a big step to take

923
00:39:34,920 --> 00:39:40,380
it's a good question and it's the best

924
00:39:37,260 --> 00:39:43,440
answer we can give Becky

925
00:39:40,380 --> 00:39:45,420
this question comes from Tom Seymour he

926
00:39:43,440 --> 00:39:48,659
says the first sentence of a recent

927
00:39:45,420 --> 00:39:51,059
Financial Times article read Charlie

928
00:39:48,659 --> 00:39:53,219
Munger has warned of a brewing storm in

929
00:39:51,059 --> 00:39:55,799
the U.S commercial property Market with

930
00:39:53,219 --> 00:39:58,858
American Banks full of what he said were

931
00:39:55,800 --> 00:40:00,420
bad loans as property prices fall please

932
00:39:58,858 --> 00:40:03,179
elaborate on what's going on in

933
00:40:00,420 --> 00:40:05,280
commercial real estate how bad will the

934
00:40:03,179 --> 00:40:07,739
losses be and what sectors or

935
00:40:05,280 --> 00:40:09,599
geographies look particularly bad I'll

936
00:40:07,739 --> 00:40:10,739
just add an addendum from another viewer

937
00:40:09,599 --> 00:40:12,480
who wrote in and wanted to know if

938
00:40:10,739 --> 00:40:15,179
Berkshire would be more active in

939
00:40:12,480 --> 00:40:17,599
commercial real estate as a result

940
00:40:15,179 --> 00:40:17,598
okay

941
00:40:19,800 --> 00:40:24,060
well berkshire's never been very

942
00:40:21,539 --> 00:40:25,019
important very active in commercial real

943
00:40:24,059 --> 00:40:28,380
estate

944
00:40:25,019 --> 00:40:30,900
it it works better for taxable investors

945
00:40:28,380 --> 00:40:32,280
than it does for corporations tax the

946
00:40:30,900 --> 00:40:33,480
way Berkshire is

947
00:40:32,280 --> 00:40:36,300
so

948
00:40:33,480 --> 00:40:39,480
I I don't anticipate huge

949
00:40:36,300 --> 00:40:42,660
effects on Berkshire but I do think that

950
00:40:39,480 --> 00:40:44,760
the hollowing out of the downtowns

951
00:40:42,659 --> 00:40:46,139
in the United States and elsewhere in

952
00:40:44,760 --> 00:40:48,540
the world is going to be quite

953
00:40:46,139 --> 00:40:50,219
significant and quite unpleasant

954
00:40:48,539 --> 00:40:51,300
I think the country will get through it

955
00:40:50,219 --> 00:40:54,899
all right

956
00:40:51,300 --> 00:40:58,560
but as they say it will awfully it will

957
00:40:54,900 --> 00:41:00,119
often involve a different set of owners

958
00:40:58,559 --> 00:41:04,559
yeah in the buildings the buildings

959
00:41:00,119 --> 00:41:06,420
don't go away but the owners do well but

960
00:41:04,559 --> 00:41:10,279
but most people like to buy with

961
00:41:06,420 --> 00:41:13,619
non-recourse in in real estate and and

962
00:41:10,280 --> 00:41:15,060
one time I asked Charlie there was some

963
00:41:13,619 --> 00:41:17,220
real estate guy we were talking to him

964
00:41:15,059 --> 00:41:19,078
and you know how do they decide how much

965
00:41:17,219 --> 00:41:21,899
they can a building like this is worth

966
00:41:19,079 --> 00:41:23,820
and it's the answer is it's whatever

967
00:41:21,900 --> 00:41:27,000
they can borrow without signing their

968
00:41:23,820 --> 00:41:29,160
name and if you look at

969
00:41:27,000 --> 00:41:31,739
real estate generally you'll understand

970
00:41:29,159 --> 00:41:33,960
what the phenomena that's happening if

971
00:41:31,739 --> 00:41:36,838
you do if you remind yourself that

972
00:41:33,960 --> 00:41:37,800
that's the attitude of most people that

973
00:41:36,838 --> 00:41:39,119
have

974
00:41:37,800 --> 00:41:41,400
uh

975
00:41:39,119 --> 00:41:43,880
become big in in the real estate

976
00:41:41,400 --> 00:41:46,559
business and and uh

977
00:41:43,880 --> 00:41:48,119
and it does mean that the lenders are

978
00:41:46,559 --> 00:41:49,799
the ones that

979
00:41:48,119 --> 00:41:51,559
got the property and of course they

980
00:41:49,800 --> 00:41:54,180
don't want the property usually so then

981
00:41:51,559 --> 00:41:57,000
the real estate operator comes on

982
00:41:54,179 --> 00:41:58,319
negotiating with them and and the banks

983
00:41:57,000 --> 00:41:59,820
tend to

984
00:41:58,320 --> 00:42:02,700
you know

985
00:41:59,820 --> 00:42:06,119
extend and pretend and there's all kinds

986
00:42:02,699 --> 00:42:08,819
of activities that arrive out of out of

987
00:42:06,119 --> 00:42:12,180
commercial real estate development which

988
00:42:08,820 --> 00:42:15,000
occurs on a big big scale but it all has

989
00:42:12,179 --> 00:42:16,259
consequences and and I think we're

990
00:42:15,000 --> 00:42:18,719
we're about

991
00:42:16,260 --> 00:42:21,180
well we are starting to see the

992
00:42:18,719 --> 00:42:22,199
consequences of people who could borrow

993
00:42:21,179 --> 00:42:24,299
it

994
00:42:22,199 --> 00:42:26,279
two and a half percent

995
00:42:24,300 --> 00:42:28,039
find out it doesn't work at current

996
00:42:26,280 --> 00:42:30,480
rates and they hand it back to somebody

997
00:42:28,039 --> 00:42:31,800
that gave them all the money they needed

998
00:42:30,480 --> 00:42:33,059
to build it

999
00:42:31,800 --> 00:42:34,740
done

1000
00:42:33,059 --> 00:42:36,299
Charlie's had more experience than

1001
00:42:34,739 --> 00:42:38,879
really Charlie got it started in real

1002
00:42:36,300 --> 00:42:41,760
estate though I mean Charlie Charlie

1003
00:42:38,880 --> 00:42:44,338
yes it

1004
00:42:41,760 --> 00:42:48,420
it's difficult

1005
00:42:44,338 --> 00:42:51,358
I like what we do better

1006
00:42:48,420 --> 00:42:54,838
well as Charlie once said to me when I

1007
00:42:51,358 --> 00:42:56,759
was leaving his house a few months ago I

1008
00:42:54,838 --> 00:42:58,500
was visiting him we talked for a couple

1009
00:42:56,760 --> 00:43:00,480
of hours and I said to Charlie as I left

1010
00:42:58,500 --> 00:43:02,940
I just it wasn't anybody else in the

1011
00:43:00,480 --> 00:43:05,940
house and I said except

1012
00:43:02,940 --> 00:43:07,858
one daughter and I said uh Charlie hello

1013
00:43:05,940 --> 00:43:10,200
I'll just keep

1014
00:43:07,858 --> 00:43:12,480
doing what we've been doing and

1015
00:43:10,199 --> 00:43:14,578
Charlie said without looking up or

1016
00:43:12,480 --> 00:43:18,019
pausing a second he said that's all you

1017
00:43:14,579 --> 00:43:18,019
know how to do Warren yeah

1018
00:43:19,019 --> 00:43:25,880
he was right too ah station

1019
00:43:22,679 --> 00:43:25,879
three is it

1020
00:43:26,039 --> 00:43:33,119
hi uh my name is salazi I'm from Santa

1021
00:43:30,059 --> 00:43:36,838
Santa Clara California and my question

1022
00:43:33,119 --> 00:43:39,780
is to Charlie and Warren given the rise

1023
00:43:36,838 --> 00:43:42,719
of disruptive technologies that can

1024
00:43:39,780 --> 00:43:46,019
improve productivity significantly and

1025
00:43:42,719 --> 00:43:48,539
AI being one of them how do you envision

1026
00:43:46,019 --> 00:43:52,318
the future of value investing in this

1027
00:43:48,539 --> 00:43:54,358
new era and what adaptations or new

1028
00:43:52,318 --> 00:43:56,759
principles do you think investors should

1029
00:43:54,358 --> 00:43:59,578
adopt and any recommendations for

1030
00:43:56,760 --> 00:44:04,079
investors to remain successful in this

1031
00:43:59,579 --> 00:44:08,280
rapid changing landscape thank you

1032
00:44:04,079 --> 00:44:10,440
take that one I think value investors

1033
00:44:08,280 --> 00:44:14,280
are going to have a harder time now that

1034
00:44:10,440 --> 00:44:17,280
there's so many of them competing first

1035
00:44:14,280 --> 00:44:20,040
a diminished bunch of opportunities

1036
00:44:17,280 --> 00:44:23,359
so my advice to Value investors is to

1037
00:44:20,039 --> 00:44:23,358
get used to making less

1038
00:44:24,179 --> 00:44:27,598
and

1039
00:44:25,920 --> 00:44:29,338
Charlie was been telling me the same

1040
00:44:27,599 --> 00:44:31,680
thing the whole time we've known each

1041
00:44:29,338 --> 00:44:33,659
other we we get along wonderfully

1042
00:44:31,679 --> 00:44:36,299
because we are making less

1043
00:44:33,659 --> 00:44:38,039
yeah well but that's because that mostly

1044
00:44:36,300 --> 00:44:40,800
I think is because it's larger we were

1045
00:44:38,039 --> 00:44:45,119
younger we never thought we could manage

1046
00:44:40,800 --> 00:44:50,760
508 billion no one or five yeah but

1047
00:44:45,119 --> 00:44:53,039
I I would argue that uh that uh

1048
00:44:50,760 --> 00:44:55,380
there's gonna be plenty of opportunities

1049
00:44:53,039 --> 00:44:57,000
and part of the reason they're going to

1050
00:44:55,380 --> 00:44:59,039
be plenty of opportunities

1051
00:44:57,000 --> 00:45:00,719
the tech doesn't make any difference or

1052
00:44:59,039 --> 00:45:02,759
any of that I mean if you look at how

1053
00:45:00,719 --> 00:45:05,818
the world changed in them

1054
00:45:02,760 --> 00:45:07,260
in the years since 1942 when I started

1055
00:45:05,818 --> 00:45:08,519
to say well

1056
00:45:07,260 --> 00:45:09,960
how do the kid that doesn't know

1057
00:45:08,519 --> 00:45:11,639
anything about airplanes it doesn't know

1058
00:45:09,960 --> 00:45:13,139
anything about androgens and cars and

1059
00:45:11,639 --> 00:45:16,139
doesn't know anything about them

1060
00:45:13,139 --> 00:45:18,838
electricity and all that but that really

1061
00:45:16,139 --> 00:45:21,420
isn't the that's not there the world

1062
00:45:18,838 --> 00:45:22,980
changing doesn't or new things coming

1063
00:45:21,420 --> 00:45:25,920
along don't take away the opportunities

1064
00:45:22,980 --> 00:45:31,039
what gives you opportunities is other

1065
00:45:25,920 --> 00:45:33,480
people doing dumb things and uh is that

1066
00:45:31,039 --> 00:45:35,279
[Applause]

1067
00:45:33,480 --> 00:45:37,079
and

1068
00:45:35,280 --> 00:45:38,640
I would say

1069
00:45:37,079 --> 00:45:40,380
that

1070
00:45:38,639 --> 00:45:42,900
well the 58 years we've been running

1071
00:45:40,380 --> 00:45:44,338
Berkshire I would say there's been a

1072
00:45:42,900 --> 00:45:47,338
great increase

1073
00:45:44,338 --> 00:45:49,679
uh and the number of people doing dumb

1074
00:45:47,338 --> 00:45:51,599
things and they do big dumb things and

1075
00:45:49,679 --> 00:45:53,879
the reason they do it to some extent is

1076
00:45:51,599 --> 00:45:56,400
because they they can get money from

1077
00:45:53,880 --> 00:45:59,160
other people so much easier

1078
00:45:56,400 --> 00:46:02,940
than when we started so you could start

1079
00:45:59,159 --> 00:46:05,639
10 or 15 dumb insurance companies in the

1080
00:46:02,940 --> 00:46:09,300
last 10 years and you could become rich

1081
00:46:05,639 --> 00:46:11,098
uh if you were a Droid at it whether the

1082
00:46:09,300 --> 00:46:13,318
business succeeded it or not and the

1083
00:46:11,099 --> 00:46:17,579
underwriters got paid and the lawyers

1084
00:46:13,318 --> 00:46:20,699
got paid and that creates

1085
00:46:17,579 --> 00:46:23,519
if that's not on a large scale which it

1086
00:46:20,699 --> 00:46:24,899
couldn't be done what 58 years ago you

1087
00:46:23,519 --> 00:46:27,239
couldn't get the money

1088
00:46:24,900 --> 00:46:32,639
to do some of the dumb things that we

1089
00:46:27,239 --> 00:46:34,519
wanted to do fortunately uh and uh so

1090
00:46:32,639 --> 00:46:38,098
I know I think that

1091
00:46:34,519 --> 00:46:40,519
investing has disappeared so much from

1092
00:46:38,099 --> 00:46:42,480
this huge

1093
00:46:40,519 --> 00:46:44,818
capitalistic Market

1094
00:46:42,480 --> 00:46:47,099
that anybody can play in

1095
00:46:44,818 --> 00:46:50,219
but the big money is in selling other

1096
00:46:47,099 --> 00:46:52,800
people ideas that isn't outperforming in

1097
00:46:50,219 --> 00:46:54,598
outperforming and

1098
00:46:52,800 --> 00:46:57,180
I think that

1099
00:46:54,599 --> 00:47:00,599
I think if you don't run too much money

1100
00:46:57,179 --> 00:47:01,858
which we do but if you're running small

1101
00:47:00,599 --> 00:47:04,800
amounts of money

1102
00:47:01,858 --> 00:47:07,259
I think I think the opportunities

1103
00:47:04,800 --> 00:47:09,000
will be greater but then Charlie and I

1104
00:47:07,260 --> 00:47:11,099
have always differed on this subject he

1105
00:47:09,000 --> 00:47:14,159
he likes to tell me how gloomy the world

1106
00:47:11,099 --> 00:47:16,980
is and I I like to tell them we'll find

1107
00:47:14,159 --> 00:47:19,460
something and and so far we've both been

1108
00:47:16,980 --> 00:47:19,460
kind of right

1109
00:47:20,719 --> 00:47:24,139
on that or not

1110
00:47:26,099 --> 00:47:30,960
there

1111
00:47:28,440 --> 00:47:33,300
there is so much money now in the hands

1112
00:47:30,960 --> 00:47:36,000
of so many smart people

1113
00:47:33,300 --> 00:47:38,099
all trying to outsmart one another

1114
00:47:36,000 --> 00:47:39,780
and not promote one another getting more

1115
00:47:38,099 --> 00:47:41,400
money out of other people

1116
00:47:39,780 --> 00:47:44,099
and

1117
00:47:41,400 --> 00:47:48,079
it's a radically different world from

1118
00:47:44,099 --> 00:47:48,079
the world we started in

1119
00:47:48,119 --> 00:47:51,300
I suppose it will have its opportunities

1120
00:47:50,099 --> 00:47:53,760
but

1121
00:47:51,300 --> 00:47:55,980
it's also going to have some unpleasant

1122
00:47:53,760 --> 00:47:57,780
episodes but they're trying to outsmart

1123
00:47:55,980 --> 00:47:59,880
each other

1124
00:47:57,780 --> 00:48:02,700
in arenas

1125
00:47:59,880 --> 00:48:04,380
you don't have to play I mean if you

1126
00:48:02,699 --> 00:48:06,299
look at that Government Bond Market I

1127
00:48:04,380 --> 00:48:08,280
feel the treasury ball Market I mean

1128
00:48:06,300 --> 00:48:09,660
you've got this one bill that's out of

1129
00:48:08,280 --> 00:48:11,400
line with the others when we were over

1130
00:48:09,659 --> 00:48:13,980
three billion of us the other day and

1131
00:48:11,400 --> 00:48:16,800
and but

1132
00:48:13,980 --> 00:48:19,260
those are people the world is

1133
00:48:16,800 --> 00:48:23,099
overwhelmingly

1134
00:48:19,260 --> 00:48:25,560
short-term focused and if you go to an

1135
00:48:23,099 --> 00:48:27,539
investor relations call they're all

1136
00:48:25,559 --> 00:48:29,099
trying to figure out how to fill those

1137
00:48:27,539 --> 00:48:30,838
out of sheet to show the earnings for

1138
00:48:29,099 --> 00:48:32,640
the year and the management is

1139
00:48:30,838 --> 00:48:35,759
interested in feeding them expectations

1140
00:48:32,639 --> 00:48:38,699
that will slightly be beaten I mean that

1141
00:48:35,760 --> 00:48:39,839
that is the world was made to order for

1142
00:48:38,699 --> 00:48:42,358
anybody that's trying to think about

1143
00:48:39,838 --> 00:48:46,679
what you do that should work over five

1144
00:48:42,358 --> 00:48:48,779
or ten or Twenty Years and uh

1145
00:48:46,679 --> 00:48:52,259
I I just think that

1146
00:48:48,780 --> 00:48:54,119
I would love to be born today and go out

1147
00:48:52,260 --> 00:48:56,339
with not too much money and hopefully

1148
00:48:54,119 --> 00:48:57,960
turn it into a lot of money

1149
00:48:56,338 --> 00:49:00,380
but

1150
00:48:57,960 --> 00:49:03,179
and Charlie would too actually just like

1151
00:49:00,380 --> 00:49:05,818
he he would find something to do I will

1152
00:49:03,179 --> 00:49:08,338
just guarantee you uh and it wouldn't be

1153
00:49:05,818 --> 00:49:10,619
exactly the same as before but he would

1154
00:49:08,338 --> 00:49:13,318
have a big big big

1155
00:49:10,619 --> 00:49:18,140
pile I would not like the thrill of

1156
00:49:13,318 --> 00:49:18,139
losing my big pile into a small pie

1157
00:49:19,139 --> 00:49:23,940
but we like my big piles is the Way It

1158
00:49:21,480 --> 00:49:26,780
Is Well I like

1159
00:49:23,940 --> 00:49:29,519
we agree on that incidentally okay we do

1160
00:49:26,780 --> 00:49:32,119
you're one of the most extreme lovers of

1161
00:49:29,519 --> 00:49:32,119
the big pile

1162
00:49:32,338 --> 00:49:37,679
Becky

1163
00:49:34,219 --> 00:49:40,318
this question is for both Warren and a g

1164
00:49:37,679 --> 00:49:43,679
it comes from Jason ploner in Livingston

1165
00:49:40,318 --> 00:49:46,139
New Jersey he says in 2016 you entered

1166
00:49:43,679 --> 00:49:48,419
into a very unique transaction with AIG

1167
00:49:46,139 --> 00:49:50,519
where you assumed up to 20 billion

1168
00:49:48,420 --> 00:49:53,039
dollars of liabilities in exchange for

1169
00:49:50,519 --> 00:49:54,719
about 10 billion dollars up front can

1170
00:49:53,039 --> 00:49:56,400
you please provide us with an update on

1171
00:49:54,719 --> 00:49:58,980
this transaction in light of the

1172
00:49:56,400 --> 00:50:00,780
increase in interest rates and then in

1173
00:49:58,980 --> 00:50:02,519
Tokyo just a few weeks ago you talked

1174
00:50:00,780 --> 00:50:04,260
about the risks of banks with assets

1175
00:50:02,519 --> 00:50:07,380
that were susceptible to Rising interest

1176
00:50:04,260 --> 00:50:09,720
rates any insight as to how Berkshire

1177
00:50:07,380 --> 00:50:11,700
liabilities are susceptible to duration

1178
00:50:09,719 --> 00:50:14,939
would be appreciated is that direction

1179
00:50:11,699 --> 00:50:17,519
to Vegeta or me or what both okay let me

1180
00:50:14,940 --> 00:50:19,200
introduce my one thing and well but

1181
00:50:17,519 --> 00:50:21,358
Egypt is the key to this he's the one

1182
00:50:19,199 --> 00:50:26,098
that put the deal together but we got

1183
00:50:21,358 --> 00:50:29,400
handed 10 billion we'll say uh uh

1184
00:50:26,099 --> 00:50:33,539
and but we weren't restricted to putting

1185
00:50:29,400 --> 00:50:36,059
that into into bonds uh so

1186
00:50:33,539 --> 00:50:38,579
what the exact interest rate interest

1187
00:50:36,059 --> 00:50:42,659
rates affect us to some degree maybe in

1188
00:50:38,579 --> 00:50:44,640
terms of the terms uh of the deal we did

1189
00:50:42,659 --> 00:50:46,440
with AIG or anybody we would do a

1190
00:50:44,639 --> 00:50:48,420
similar deal with like that

1191
00:50:46,440 --> 00:50:50,159
but we don't have we don't have to put

1192
00:50:48,420 --> 00:50:52,380
it in matching bonds or anything of the

1193
00:50:50,159 --> 00:50:56,039
sort it goes into a general pool of

1194
00:50:52,380 --> 00:50:58,619
assets which we manage and the assets

1195
00:50:56,039 --> 00:51:01,619
you know then well the liquid assets now

1196
00:50:58,619 --> 00:51:05,160
are 130 billion plus and that but it

1197
00:51:01,619 --> 00:51:07,019
goes in so it you know it it it is not

1198
00:51:05,159 --> 00:51:10,199
set aside in some little compartment

1199
00:51:07,019 --> 00:51:11,940
like people like to think uh now any any

1200
00:51:10,199 --> 00:51:14,759
other insurance no other insurance

1201
00:51:11,940 --> 00:51:17,460
company could do it but they can't think

1202
00:51:14,760 --> 00:51:18,780
that way uh they aren't even used to

1203
00:51:17,460 --> 00:51:20,400
thinking that way but they can't think

1204
00:51:18,780 --> 00:51:22,920
that way because they don't have our our

1205
00:51:20,400 --> 00:51:25,019
balance sheet we account for 26 or

1206
00:51:22,920 --> 00:51:26,760
something like that of the net worth of

1207
00:51:25,019 --> 00:51:29,900
all property casualty companies in the

1208
00:51:26,760 --> 00:51:32,579
United States uh so

1209
00:51:29,900 --> 00:51:36,960
uh so far

1210
00:51:32,579 --> 00:51:40,920
uh the payments that we have had to make

1211
00:51:36,960 --> 00:51:42,358
have run modestly and Ajit will correct

1212
00:51:40,920 --> 00:51:45,539
me on this if I'm wrong because he paid

1213
00:51:42,358 --> 00:51:48,719
a lot of attention over the the amount

1214
00:51:45,539 --> 00:51:49,920
we have had to pay has runs slightly

1215
00:51:48,719 --> 00:51:52,858
below

1216
00:51:49,920 --> 00:51:55,858
the amount we anticipated having to pay

1217
00:51:52,858 --> 00:51:56,818
in terms of our share of the losses uh

1218
00:51:55,858 --> 00:51:59,639
but

1219
00:51:56,818 --> 00:52:02,219
it served aig's purposes

1220
00:51:59,639 --> 00:52:04,739
it came to us with

1221
00:52:02,219 --> 00:52:07,019
where we are in a unique position

1222
00:52:04,739 --> 00:52:09,719
there's nobody else that was able to

1223
00:52:07,019 --> 00:52:13,259
write that just like when when we took

1224
00:52:09,719 --> 00:52:14,939
on the Lloyds I mean Lloyd's said there

1225
00:52:13,260 --> 00:52:18,020
was no choice other than Berkshire

1226
00:52:14,940 --> 00:52:21,838
Hathaway when they they essentially

1227
00:52:18,019 --> 00:52:26,280
resuscitated uh their Market

1228
00:52:21,838 --> 00:52:29,039
by laying off a lot of liabilities on on

1229
00:52:26,280 --> 00:52:31,440
Berkshire Hathaway so

1230
00:52:29,039 --> 00:52:33,539
um we won't see those deals very often

1231
00:52:31,440 --> 00:52:34,800
if if they're for 500 million or

1232
00:52:33,539 --> 00:52:37,380
something like that somebody else will

1233
00:52:34,800 --> 00:52:39,059
go in there and offer more money and

1234
00:52:37,380 --> 00:52:42,119
everybody's looking for money in Wall

1235
00:52:39,059 --> 00:52:44,400
Street but if they start talking with

1236
00:52:42,119 --> 00:52:46,099
the deal like the AIG deal there isn't

1237
00:52:44,400 --> 00:52:49,200
any other stop now

1238
00:52:46,099 --> 00:52:50,039
uh correct me on all my numbers there a

1239
00:52:49,199 --> 00:52:52,199
jade

1240
00:52:50,039 --> 00:52:54,358
no um

1241
00:52:52,199 --> 00:52:57,058
one way to look at how the deal is

1242
00:52:54,358 --> 00:52:58,858
performing since we did the deal is at

1243
00:52:57,059 --> 00:53:01,980
the point we in time when we did the

1244
00:52:58,858 --> 00:53:05,338
deal we had made certain projections of

1245
00:53:01,980 --> 00:53:08,280
how much we will pay out each year

1246
00:53:05,338 --> 00:53:10,500
and what we do is Monitor what the

1247
00:53:08,280 --> 00:53:12,240
actual payments are since the Inception

1248
00:53:10,500 --> 00:53:14,519
of the deal and how does that compare

1249
00:53:12,239 --> 00:53:17,399
with what we expect it to pay out

1250
00:53:14,519 --> 00:53:19,380
as Warren mentioned these two numbers

1251
00:53:17,400 --> 00:53:22,619
are very close to each other more

1252
00:53:19,380 --> 00:53:25,140
specifically the actual payouts are 96

1253
00:53:22,619 --> 00:53:27,480
percent of what we had projected to pay

1254
00:53:25,139 --> 00:53:30,539
out at this point in time

1255
00:53:27,480 --> 00:53:32,760
which is good but not great we are still

1256
00:53:30,539 --> 00:53:35,519
ahead of the curve if we do end up

1257
00:53:32,760 --> 00:53:38,280
paying out less than what we projected

1258
00:53:35,519 --> 00:53:40,318
Not only would we have borrowed money at

1259
00:53:38,280 --> 00:53:41,700
a very attractive rate meaning less than

1260
00:53:40,318 --> 00:53:43,980
four percent significantly less than

1261
00:53:41,699 --> 00:53:46,679
four percent in addition to that we

1262
00:53:43,980 --> 00:53:49,380
would have made a fee which in 1990

1263
00:53:46,679 --> 00:53:50,940
which in 2015 dollars would be a million

1264
00:53:49,380 --> 00:53:53,519
dollars so if you would have borrowed

1265
00:53:50,940 --> 00:53:54,838
money at less than four percent and we

1266
00:53:53,519 --> 00:53:57,300
would have made a million dollar fee

1267
00:53:54,838 --> 00:54:00,239
which is slightly more than what we were

1268
00:53:57,300 --> 00:54:01,920
expecting to do so net net we're very

1269
00:54:00,239 --> 00:54:05,219
happy with the deal we're happy we did

1270
00:54:01,920 --> 00:54:07,019
it uh but the game is not over the

1271
00:54:05,219 --> 00:54:10,139
taught liabilities are coming down the

1272
00:54:07,019 --> 00:54:12,059
pike every second day so I'm cautiously

1273
00:54:10,139 --> 00:54:14,279
optimistic that the deal will work out

1274
00:54:12,059 --> 00:54:16,920
better than what we expected it to work

1275
00:54:14,280 --> 00:54:18,660
out well the really interesting thing is

1276
00:54:16,920 --> 00:54:21,599
that

1277
00:54:18,659 --> 00:54:24,679
in within Bircher the Casualty Insurance

1278
00:54:21,599 --> 00:54:28,019
companies have four times as much

1279
00:54:24,679 --> 00:54:30,299
stockholder Capital between behind each

1280
00:54:28,019 --> 00:54:32,280
dollar of Premium volume

1281
00:54:30,300 --> 00:54:33,599
four times

1282
00:54:32,280 --> 00:54:36,720
normal

1283
00:54:33,599 --> 00:54:38,220
and of course we see the big deals who

1284
00:54:36,719 --> 00:54:41,699
would you trust if you had a big

1285
00:54:38,219 --> 00:54:45,598
liability you wanted to dump on somebody

1286
00:54:41,699 --> 00:54:47,939
and we have 25 or

1287
00:54:45,599 --> 00:54:49,920
billion or more

1288
00:54:47,940 --> 00:54:52,220
coming in from things other than

1289
00:54:49,920 --> 00:54:54,900
insurance

1290
00:54:52,219 --> 00:54:56,759
uncorrelated to Insurance every year

1291
00:54:54,900 --> 00:54:58,920
with no obligations we don't pay

1292
00:54:56,760 --> 00:55:01,319
dividends if you paid evidence and

1293
00:54:58,920 --> 00:55:02,818
you know and you cut your dividend try

1294
00:55:01,318 --> 00:55:04,800
going around trying to write insurance

1295
00:55:02,818 --> 00:55:06,539
the next day I mean it's a business

1296
00:55:04,800 --> 00:55:07,318
where the people are counting on you to

1297
00:55:06,539 --> 00:55:08,519
pay

1298
00:55:07,318 --> 00:55:11,279
and

1299
00:55:08,519 --> 00:55:14,818
when we take that 10 billion we don't

1300
00:55:11,280 --> 00:55:16,440
agree to put it in five-year bonds and

1301
00:55:14,818 --> 00:55:19,199
10-year bonds we don't even think that

1302
00:55:16,440 --> 00:55:22,139
way and the people who do business with

1303
00:55:19,199 --> 00:55:24,838
us know that they have somebody like

1304
00:55:22,139 --> 00:55:27,719
nobody else on those and it's going to

1305
00:55:24,838 --> 00:55:30,719
be able to pay 10 billion you know if no

1306
00:55:27,719 --> 00:55:32,699
matter what happens to the economy so

1307
00:55:30,719 --> 00:55:34,618
it's not only the presence of enormous

1308
00:55:32,699 --> 00:55:36,000
strength in the insurance companies this

1309
00:55:34,619 --> 00:55:39,119
is the fact we got all these earnings

1310
00:55:36,000 --> 00:55:41,219
that essentially come in every month and

1311
00:55:39,119 --> 00:55:42,960
we don't have we don't have a lot of

1312
00:55:41,219 --> 00:55:46,799
debt I mean we we have debt at the

1313
00:55:42,960 --> 00:55:50,280
railroad and the energy level but but in

1314
00:55:46,800 --> 00:55:52,619
terms of the rest of the operation uh

1315
00:55:50,280 --> 00:55:55,200
and and we don't guarantee that that but

1316
00:55:52,619 --> 00:55:57,720
but it's probably good uh

1317
00:55:55,199 --> 00:56:01,980
and it's there just isn't another

1318
00:55:57,719 --> 00:56:04,199
Berkshire and uh and the Jeep recognizes

1319
00:56:01,980 --> 00:56:06,119
that when he's negotiating so does the

1320
00:56:04,199 --> 00:56:08,039
other party if sums are big enough

1321
00:56:06,119 --> 00:56:10,318
there's all kinds of people that love to

1322
00:56:08,039 --> 00:56:12,179
get 500 million or 300 million and

1323
00:56:10,318 --> 00:56:14,759
they'll and they can

1324
00:56:12,179 --> 00:56:16,078
they may think in terms of lending it

1325
00:56:14,760 --> 00:56:17,880
out because that's what their insurance

1326
00:56:16,079 --> 00:56:19,980
companies can do at a somewhat higher

1327
00:56:17,880 --> 00:56:22,260
rate but that is not a game we play in

1328
00:56:19,980 --> 00:56:23,400
and we don't have any interest in

1329
00:56:22,260 --> 00:56:24,660
playing in them

1330
00:56:23,400 --> 00:56:27,420
okay

1331
00:56:24,659 --> 00:56:31,318
station four

1332
00:56:27,420 --> 00:56:33,838
hello I'm Marvin Blum an estate planning

1333
00:56:31,318 --> 00:56:37,259
lawyer from Fort Worth Texas home to

1334
00:56:33,838 --> 00:56:40,739
many of your companies in fact Warren I

1335
00:56:37,260 --> 00:56:46,260
met you at the memorial for our beloved

1336
00:56:40,739 --> 00:56:48,719
Paul Andrews who was manager of TTI

1337
00:56:46,260 --> 00:56:51,000
I'd like to get your thoughts on a

1338
00:56:48,719 --> 00:56:53,639
widespread problem in the world of

1339
00:56:51,000 --> 00:56:56,519
Estate Planning and that's the failure

1340
00:56:53,639 --> 00:56:59,338
of most parents to prepare the Next

1341
00:56:56,519 --> 00:57:01,019
Generation for the inheritance coming

1342
00:56:59,338 --> 00:57:04,679
their way

1343
00:57:01,019 --> 00:57:08,039
in particular if the estate includes a

1344
00:57:04,679 --> 00:57:10,980
family business most parents fail to do

1345
00:57:08,039 --> 00:57:13,318
business succession planning to plan for

1346
00:57:10,980 --> 00:57:17,880
who will run the business on the day

1347
00:57:13,318 --> 00:57:20,579
when not if the founder is no longer

1348
00:57:17,880 --> 00:57:24,300
there to run it the kids aren't prepared

1349
00:57:20,579 --> 00:57:28,559
unlike uh King Charles the the other

1350
00:57:24,300 --> 00:57:30,960
King Charles not King Charlie Munger who

1351
00:57:28,559 --> 00:57:34,319
has been preparing for his job as king

1352
00:57:30,960 --> 00:57:36,720
of England now for more than 70 years

1353
00:57:34,318 --> 00:57:40,139
I sometimes describe the situation like

1354
00:57:36,719 --> 00:57:42,239
this picture a football game at one end

1355
00:57:40,139 --> 00:57:44,338
of the field is a quarterback

1356
00:57:42,239 --> 00:57:46,199
he has great skills he throws a

1357
00:57:44,338 --> 00:57:47,039
beautiful pass to the other end of the

1358
00:57:46,199 --> 00:57:49,139
field

1359
00:57:47,039 --> 00:57:51,000
and at the other end of the field are

1360
00:57:49,139 --> 00:57:53,460
the receivers

1361
00:57:51,000 --> 00:57:55,500
they've never been to a practice they

1362
00:57:53,460 --> 00:57:57,300
don't know the rules of the game

1363
00:57:55,500 --> 00:57:59,579
they don't know how to work together as

1364
00:57:57,300 --> 00:58:02,039
a team they're Clueless

1365
00:57:59,579 --> 00:58:04,920
so the quarterback is the patriarch and

1366
00:58:02,039 --> 00:58:07,679
The Matriarch the football is the

1367
00:58:04,920 --> 00:58:10,700
inheritance or the family business

1368
00:58:07,679 --> 00:58:12,659
and the receivers are the kids

1369
00:58:10,699 --> 00:58:15,719
that they're going to catch the football

1370
00:58:12,659 --> 00:58:17,759
and go score a touchdown probably only

1371
00:58:15,719 --> 00:58:22,039
around 10 percent I've got the picture

1372
00:58:17,760 --> 00:58:22,040
on on the question

1373
00:58:22,199 --> 00:58:26,039
no

1374
00:58:23,818 --> 00:58:28,920
they uh

1375
00:58:26,039 --> 00:58:30,838
I probably observed as many just because

1376
00:58:28,920 --> 00:58:32,220
of my age and to some extent because of

1377
00:58:30,838 --> 00:58:33,900
things like the giving Pleasures I

1378
00:58:32,219 --> 00:58:35,818
probably observed

1379
00:58:33,900 --> 00:58:37,920
as many

1380
00:58:35,818 --> 00:58:39,659
particularly wealthy families the

1381
00:58:37,920 --> 00:58:41,700
problems and they all are

1382
00:58:39,659 --> 00:58:45,539
they get very particular

1383
00:58:41,699 --> 00:58:46,919
uh to the family and uh uh

1384
00:58:45,539 --> 00:58:49,739
and

1385
00:58:46,920 --> 00:58:52,260
uh in my family

1386
00:58:49,739 --> 00:58:54,719
I do not sign a will

1387
00:58:52,260 --> 00:58:56,339
until my three children

1388
00:58:54,719 --> 00:59:00,358
have read it

1389
00:58:56,338 --> 00:59:02,818
understand it and made suggestions now

1390
00:59:00,358 --> 00:59:04,858
my children are in their 60s

1391
00:59:02,818 --> 00:59:07,318
and that would not have been a great one

1392
00:59:04,858 --> 00:59:09,900
success if I'd done the same thing as

1393
00:59:07,318 --> 00:59:11,699
their 20s it depends on the Family

1394
00:59:09,900 --> 00:59:13,740
it depends on how the kids feel about

1395
00:59:11,699 --> 00:59:15,358
each other there's all kinds of things

1396
00:59:13,739 --> 00:59:17,399
depends on the kind of business you have

1397
00:59:15,358 --> 00:59:20,279
so there's a there's a thousand

1398
00:59:17,400 --> 00:59:21,960
variables but I do think

1399
00:59:20,280 --> 00:59:25,319
that it's

1400
00:59:21,960 --> 00:59:26,818
if the children are grown and when the

1401
00:59:25,318 --> 00:59:29,880
will is read to them it's the first

1402
00:59:26,818 --> 00:59:32,338
they've heard about what the deceased

1403
00:59:29,880 --> 00:59:34,318
thought about things

1404
00:59:32,338 --> 00:59:36,599
the burns have made a terrible mistake

1405
00:59:34,318 --> 00:59:38,579
and uh

1406
00:59:36,599 --> 00:59:42,119
people

1407
00:59:38,579 --> 00:59:44,400
people who well I've run into all kinds

1408
00:59:42,119 --> 00:59:46,200
of situations and some people don't tell

1409
00:59:44,400 --> 00:59:48,298
their children anything and some of them

1410
00:59:46,199 --> 00:59:51,000
try and get them to bend to their will

1411
00:59:48,298 --> 00:59:53,400
by using their their own personal World

1412
00:59:51,000 --> 00:59:56,940
they make a million mistakes

1413
00:59:53,400 --> 00:59:59,220
and that's when you don't get to correct

1414
00:59:56,940 --> 01:00:01,500
uh

1415
00:59:59,219 --> 01:00:03,659
and certainly in my well Charlie's had a

1416
01:00:01,500 --> 01:00:05,099
lot of experience too well at Berkshire

1417
01:00:03,659 --> 01:00:06,960
we have a simple

1418
01:00:05,099 --> 01:00:08,160
problem of

1419
01:00:06,960 --> 01:00:11,159
uh

1420
01:00:08,159 --> 01:00:12,440
estate planning just hold the goddamn

1421
01:00:11,159 --> 01:00:15,440
stock

1422
01:00:12,440 --> 01:00:15,440
well

1423
01:00:15,798 --> 01:00:23,480
but that doesn't fit everybody Charlie I

1424
01:00:18,960 --> 01:00:23,480
mean uh you know if it's 95 percent

1425
01:00:24,358 --> 01:00:28,920
I don't think it necessarily

1426
01:00:26,480 --> 01:00:30,358
I don't know necessarily whether we have

1427
01:00:28,920 --> 01:00:31,858
billions of dollars you want to leave it

1428
01:00:30,358 --> 01:00:33,420
to your all your children I mean that's

1429
01:00:31,858 --> 01:00:35,519
something that's another question but if

1430
01:00:33,420 --> 01:00:37,858
you're going to play places somewhere I

1431
01:00:35,519 --> 01:00:40,079
just as soon as Berkshire stock is down

1432
01:00:37,858 --> 01:00:41,818
oh you're solving the investment problem

1433
01:00:40,079 --> 01:00:43,798
yeah but you've got the personal problem

1434
01:00:41,818 --> 01:00:46,679
of the fact that when there were four

1435
01:00:43,798 --> 01:00:49,980
one of the kids pulled the other kids

1436
01:00:46,679 --> 01:00:52,139
uh cat's tail or something like that I

1437
01:00:49,980 --> 01:00:54,960
mean you're dealing with human beings

1438
01:00:52,139 --> 01:00:56,578
and the biggest thing you want

1439
01:00:54,960 --> 01:00:58,920
is you want

1440
01:00:56,579 --> 01:01:00,200
you want your children to get along and

1441
01:00:58,920 --> 01:01:03,059
you'll want that all through your life

1442
01:01:00,199 --> 01:01:06,058
and the estate isn't the only place

1443
01:01:03,059 --> 01:01:09,420
where you can mess that up but the it's

1444
01:01:06,059 --> 01:01:11,339
a place where you it's a very easy I

1445
01:01:09,420 --> 01:01:13,798
mean I know a number of cases where the

1446
01:01:11,338 --> 01:01:15,900
people did not know what was in the will

1447
01:01:13,798 --> 01:01:17,880
whether we're using something's involved

1448
01:01:15,900 --> 01:01:19,980
and you know within about 15 minutes

1449
01:01:17,880 --> 01:01:21,539
each one of them had a lawyer and you

1450
01:01:19,980 --> 01:01:24,838
know they don't get a long sense of it

1451
01:01:21,539 --> 01:01:29,579
it's it's a it's important to handle it

1452
01:01:24,838 --> 01:01:31,078
right and uh uh it's important if you

1453
01:01:29,579 --> 01:01:35,039
want your kids

1454
01:01:31,079 --> 01:01:37,260
do have a certain value certain values

1455
01:01:35,039 --> 01:01:39,358
it's important that you live those

1456
01:01:37,260 --> 01:01:42,260
values it's important that you talk

1457
01:01:39,358 --> 01:01:45,358
about it to them or

1458
01:01:42,260 --> 01:01:48,480
they're going they're learning from you

1459
01:01:45,358 --> 01:01:52,440
from the day they're born what you're

1460
01:01:48,480 --> 01:01:56,159
really like and uh don't think that a

1461
01:01:52,440 --> 01:01:58,980
cleverly drawn will will substitute for

1462
01:01:56,159 --> 01:02:01,639
your own behavior in teaching your kids

1463
01:01:58,980 --> 01:02:04,380
the values you hope that they will have

1464
01:02:01,639 --> 01:02:06,598
and then your will should be in

1465
01:02:04,380 --> 01:02:08,579
conjunction with that it should start

1466
01:02:06,599 --> 01:02:11,700
expressing and they grow older and then

1467
01:02:08,579 --> 01:02:14,339
they they they learn to

1468
01:02:11,699 --> 01:02:17,338
they them they learn to

1469
01:02:14,338 --> 01:02:19,318
pass along their values in connection

1470
01:02:17,338 --> 01:02:21,298
with the size of the state if there's

1471
01:02:19,318 --> 01:02:22,739
Family Farms it's one thing if it's a

1472
01:02:21,298 --> 01:02:24,780
bunch of marketable Securities is

1473
01:02:22,739 --> 01:02:25,919
something else but I know in one

1474
01:02:24,780 --> 01:02:30,000
instance

1475
01:02:25,920 --> 01:02:30,960
by particularly Rich fellow that once a

1476
01:02:30,000 --> 01:02:33,420
year

1477
01:02:30,960 --> 01:02:36,599
he'd get those kids together and have a

1478
01:02:33,420 --> 01:02:39,059
dinner and do all kinds of things to get

1479
01:02:36,599 --> 01:02:40,859
them to sign their income tax returns in

1480
01:02:39,059 --> 01:02:42,420
blank because he didn't want them to

1481
01:02:40,858 --> 01:02:44,098
know how much money they had and

1482
01:02:42,420 --> 01:02:47,039
everything well

1483
01:02:44,099 --> 01:02:48,838
if that that isn't going to work I mean

1484
01:02:47,039 --> 01:02:50,940
I don't know why necessarily real words

1485
01:02:48,838 --> 01:02:52,380
with him but uh

1486
01:02:50,940 --> 01:02:54,900
if you want

1487
01:02:52,380 --> 01:02:56,160
you know about Charlie and I've said it

1488
01:02:54,900 --> 01:02:58,380
you know if you want to figure out how

1489
01:02:56,159 --> 01:03:00,719
you want to live your life who you write

1490
01:02:58,380 --> 01:03:04,140
your obituary and reverse engineer it I

1491
01:03:00,719 --> 01:03:06,659
mean you know and uh and Paul Andrews

1492
01:03:04,139 --> 01:03:08,578
incidentally who you mentioned that TTI

1493
01:03:06,659 --> 01:03:12,659
lived as great a life as anybody I've

1494
01:03:08,579 --> 01:03:13,740
known and uh he he thought about these

1495
01:03:12,659 --> 01:03:16,078
problems

1496
01:03:13,739 --> 01:03:20,098
he came to me

1497
01:03:16,079 --> 01:03:22,019
he was 61 I think had all the money Way

1498
01:03:20,099 --> 01:03:24,119
Beyond what he needed didn't care about

1499
01:03:22,019 --> 01:03:25,920
he'd like to give it to give it to

1500
01:03:24,119 --> 01:03:27,720
people he had all kinds of good things

1501
01:03:25,920 --> 01:03:30,059
he wanted to do and he said for a year

1502
01:03:27,719 --> 01:03:33,179
I've been worried about my business TTI

1503
01:03:30,059 --> 01:03:34,920
and he said I've got all the money I

1504
01:03:33,179 --> 01:03:36,899
need the families all the money that I

1505
01:03:34,920 --> 01:03:39,539
need but what do I do with the business

1506
01:03:36,900 --> 01:03:41,160
these people have have helped me

1507
01:03:39,539 --> 01:03:43,500
throughout my life and he says I could

1508
01:03:41,159 --> 01:03:46,379
sell it to a competitor and if I sold it

1509
01:03:43,500 --> 01:03:48,780
to a competitor they'd fire my people

1510
01:03:46,380 --> 01:03:51,298
and keep their people when they put it

1511
01:03:48,780 --> 01:03:53,460
together and if I if I sell it to a

1512
01:03:51,298 --> 01:03:55,739
private Equity Firm or somebody they'll

1513
01:03:53,460 --> 01:03:58,500
they'll be figuring their exit strategy

1514
01:03:55,739 --> 01:03:59,578
as they sign the sign the papers and he

1515
01:03:58,500 --> 01:04:02,880
said

1516
01:03:59,579 --> 01:04:04,740
so I've been thinking about a year and

1517
01:04:02,880 --> 01:04:06,358
uh he said it isn't that you're such a

1518
01:04:04,739 --> 01:04:08,959
great guy he says it's just you're the

1519
01:04:06,358 --> 01:04:08,960
only one left

1520
01:04:09,059 --> 01:04:15,359
and we bought it and we lived happily

1521
01:04:11,760 --> 01:04:18,299
ever after and uh that was a man that

1522
01:04:15,358 --> 01:04:20,599
knew what life was about so with that

1523
01:04:18,298 --> 01:04:25,190
let's go on to Becky

1524
01:04:20,599 --> 01:04:25,190
[Applause]

1525
01:04:25,559 --> 01:04:30,660
uh this question comes from Don

1526
01:04:27,780 --> 01:04:32,400
glickstein in Seattle he says Warren has

1527
01:04:30,659 --> 01:04:34,798
criticized Norfolk Southern's handling

1528
01:04:32,400 --> 01:04:38,460
of its train derailment yet has been

1529
01:04:34,798 --> 01:04:40,920
silent about BNSF bnsf's conduct a

1530
01:04:38,460 --> 01:04:43,380
federal judge ruled in March that BNSF

1531
01:04:40,920 --> 01:04:45,960
intentionally and illegally violated an

1532
01:04:43,380 --> 01:04:48,599
easement agreement on tribal land in

1533
01:04:45,960 --> 01:04:51,119
Washington state by transporting long

1534
01:04:48,599 --> 01:04:53,160
trains of crude oil the same month the

1535
01:04:51,119 --> 01:04:55,920
judge made his ruling a BNSF Train

1536
01:04:53,159 --> 01:04:58,440
derailed on tribal lands spilling oil in

1537
01:04:55,920 --> 01:05:00,780
an environmentally sensitive area what

1538
01:04:58,440 --> 01:05:03,240
is Warren doing to ensure that BNSF and

1539
01:05:00,780 --> 01:05:05,579
other Berkshire subsidiaries fulfilled

1540
01:05:03,239 --> 01:05:06,899
their ethical responsibilities he says

1541
01:05:05,579 --> 01:05:08,760
he's been a Berkshire owner for more

1542
01:05:06,900 --> 01:05:11,460
than two decades and he's concerned that

1543
01:05:08,760 --> 01:05:13,140
Berkshire has no systems to identify and

1544
01:05:11,460 --> 01:05:15,659
dress what he calls reprehensible

1545
01:05:13,139 --> 01:05:18,779
Behavior at BNSF and other subsidiaries

1546
01:05:15,659 --> 01:05:23,639
Greg sure

1547
01:05:18,780 --> 01:05:25,440
so the uh it it is a valid issue that

1548
01:05:23,639 --> 01:05:29,900
our team obviously has been dealing with

1549
01:05:25,440 --> 01:05:33,720
at BNSF we did move uh crude across that

1550
01:05:29,900 --> 01:05:37,740
tribal land we had an agreement that

1551
01:05:33,719 --> 01:05:40,078
allowed us to move X number of of uh

1552
01:05:37,739 --> 01:05:42,539
units per day

1553
01:05:40,079 --> 01:05:44,579
and we did breach it we went over it

1554
01:05:42,539 --> 01:05:46,139
there's uh there was some fundamental

1555
01:05:44,579 --> 01:05:49,500
breakdowns there in that our team didn't

1556
01:05:46,139 --> 01:05:52,858
understand the number of of trains that

1557
01:05:49,500 --> 01:05:55,440
they could move we have had significant

1558
01:05:52,858 --> 01:05:58,739
discussions with the tribe looking to

1559
01:05:55,440 --> 01:06:00,900
resolve the issue recognizing uh we

1560
01:05:58,739 --> 01:06:02,219
obviously been benefited from moving

1561
01:06:00,900 --> 01:06:05,160
those trains and those type of

1562
01:06:02,219 --> 01:06:08,159
discussions will continue

1563
01:06:05,159 --> 01:06:09,659
um I would say there's Lessons Learned

1564
01:06:08,159 --> 01:06:11,039
there that we have to when we make a

1565
01:06:09,659 --> 01:06:13,139
commitment understand what that

1566
01:06:11,039 --> 01:06:17,000
commitment is and and live by it or

1567
01:06:13,139 --> 01:06:19,920
don't assume we can just

1568
01:06:17,000 --> 01:06:21,659
move our trains as we wish or the the

1569
01:06:19,920 --> 01:06:23,338
cargo as we wish we have to respect

1570
01:06:21,659 --> 01:06:24,960
those agreements so there's a there's

1571
01:06:23,338 --> 01:06:26,578
been a moment learned there but at the

1572
01:06:24,960 --> 01:06:29,338
same time we've taken it very seriously

1573
01:06:26,579 --> 01:06:32,160
and attempted to reach a resolution

1574
01:06:29,338 --> 01:06:34,619
there and at some point I I hope we do

1575
01:06:32,159 --> 01:06:39,000
come to a true resolution that's fair

1576
01:06:34,619 --> 01:06:42,180
both to the tri-band to BNSF on the

1577
01:06:39,000 --> 01:06:45,358
derailment side we did have a an issue

1578
01:06:42,179 --> 01:06:49,440
around the track derailed we worked very

1579
01:06:45,358 --> 01:06:52,500
closely with the tribe to mitigate that

1580
01:06:49,440 --> 01:06:55,679
issue instantly where at least over a

1581
01:06:52,500 --> 01:06:57,780
very reasonable period of time they were

1582
01:06:55,679 --> 01:07:00,179
very responsive our team was very

1583
01:06:57,780 --> 01:07:03,119
responsive and there were really no

1584
01:07:00,179 --> 01:07:06,779
long-term environmental impacts to to

1585
01:07:03,119 --> 01:07:08,760
that to that's Bill and as our teams

1586
01:07:06,780 --> 01:07:11,400
highlighted in other comments obviously

1587
01:07:08,760 --> 01:07:13,380
derailments do occur in the industry we

1588
01:07:11,400 --> 01:07:15,358
take them incredibly serious they're not

1589
01:07:13,380 --> 01:07:17,700
all hazardous but irrespective of that

1590
01:07:15,358 --> 01:07:18,779
we're constantly looking at how do we

1591
01:07:17,699 --> 01:07:21,000
prevent them

1592
01:07:18,780 --> 01:07:23,760
how do we detect them when we

1593
01:07:21,000 --> 01:07:25,858
potentially have one that's going to

1594
01:07:23,760 --> 01:07:27,740
occur and what do we do with our trains

1595
01:07:25,858 --> 01:07:30,298
and then ultimately it comes down to

1596
01:07:27,739 --> 01:07:32,279
responding properly because they will

1597
01:07:30,298 --> 01:07:34,380
occur and I think we have an incredibly

1598
01:07:32,280 --> 01:07:36,660
dedicated team that's always ready to

1599
01:07:34,380 --> 01:07:39,260
respond to the communities they're

1600
01:07:36,659 --> 01:07:39,259
impacting

1601
01:07:39,599 --> 01:07:45,780
there are derailments how many how many

1602
01:07:42,119 --> 01:07:48,440
a year yeah well there's uh a thousand

1603
01:07:45,780 --> 01:07:51,420
plus in the industry the the yeah yeah

1604
01:07:48,440 --> 01:07:54,000
it's you start hauling

1605
01:07:51,420 --> 01:07:56,280
right and we're a common carrier we and

1606
01:07:54,000 --> 01:07:58,920
we take heavy very heavy Freight and we

1607
01:07:56,280 --> 01:08:01,319
take them at 100 degrees when it's the

1608
01:07:58,920 --> 01:08:04,079
weather and it's we take it at zero and

1609
01:08:01,318 --> 01:08:08,460
and we go around curves and we have

1610
01:08:04,079 --> 01:08:09,539
grades and uh even a one percent rate if

1611
01:08:08,460 --> 01:08:13,619
you're going down

1612
01:08:09,539 --> 01:08:15,900
down a hill with I don't know how much

1613
01:08:13,619 --> 01:08:17,940
weight behind you I mean there's a lot

1614
01:08:15,900 --> 01:08:20,039
of railroading is not an easy business

1615
01:08:17,939 --> 01:08:23,579
and of course the systems

1616
01:08:20,039 --> 01:08:26,600
were designed you know in the and

1617
01:08:23,579 --> 01:08:31,019
basically in the in the late

1618
01:08:26,600 --> 01:08:33,179
1800s amid the late 1800s and we have 22

1619
01:08:31,020 --> 01:08:34,859
000 I think it is miles of track and

1620
01:08:33,179 --> 01:08:37,100
that doesn't count sightings and some

1621
01:08:34,859 --> 01:08:40,500
other things it is not an easy business

1622
01:08:37,100 --> 01:08:42,120
we'll make mistakes our job

1623
01:08:40,500 --> 01:08:43,798
we're not making a mistake because we

1624
01:08:42,119 --> 01:08:45,719
have a derailment you're gonna we will

1625
01:08:43,798 --> 01:08:49,979
have the derailments 10 and 20 years or

1626
01:08:45,719 --> 01:08:52,140
30 years from now I mean that but we and

1627
01:08:49,979 --> 01:08:53,879
we have to carry certain products we

1628
01:08:52,140 --> 01:08:55,079
wish we didn't have to carry we're a

1629
01:08:53,880 --> 01:08:57,838
common carrier

1630
01:08:55,079 --> 01:09:00,778
do we like carrying chlorine and ammonia

1631
01:08:57,838 --> 01:09:02,460
and all no but they're going to move

1632
01:09:00,779 --> 01:09:05,540
from one place to another in this

1633
01:09:02,460 --> 01:09:10,020
society and we are a common carrier and

1634
01:09:05,539 --> 01:09:12,659
uh we load them and uh if they select

1635
01:09:10,020 --> 01:09:14,759
our railroad but

1636
01:09:12,659 --> 01:09:16,439
we are better than we used to be but we

1637
01:09:14,759 --> 01:09:18,838
got a long way to go I didn't was that a

1638
01:09:16,439 --> 01:09:22,219
fair enough statement absolutely yeah

1639
01:09:18,838 --> 01:09:22,219
okay station five

1640
01:09:23,759 --> 01:09:30,738
hi Mr Warren and Miss Manga my name is

1641
01:09:28,579 --> 01:09:34,679
from China

1642
01:09:30,738 --> 01:09:37,259
company and first of all I'm so excited

1643
01:09:34,679 --> 01:09:39,838
and very honored to be here today and my

1644
01:09:37,259 --> 01:09:42,779
question is with more and more people

1645
01:09:39,838 --> 01:09:45,778
focusing on environmental competition

1646
01:09:42,779 --> 01:09:48,660
protection and the government supporting

1647
01:09:45,779 --> 01:09:51,239
the new energy industry as well so what

1648
01:09:48,659 --> 01:09:54,840
are your thoughts on the continued

1649
01:09:51,238 --> 01:09:56,819
development of new energy how made the

1650
01:09:54,840 --> 01:09:59,640
new energy firm achieve better

1651
01:09:56,819 --> 01:10:01,679
development in future

1652
01:09:59,640 --> 01:10:03,660
yeah well Greg I think it's the best

1653
01:10:01,679 --> 01:10:06,619
answer that because he

1654
01:10:03,659 --> 01:10:08,880
since we bought a company called

1655
01:10:06,619 --> 01:10:11,219
Mid-American but now called Berkshire

1656
01:10:08,880 --> 01:10:14,940
Hathaway energy but he's been talking

1657
01:10:11,219 --> 01:10:17,340
about a yearly preparing reports hoping

1658
01:10:14,939 --> 01:10:18,960
that we can help solve a number of the

1659
01:10:17,340 --> 01:10:21,360
problems and we probably spent more

1660
01:10:18,960 --> 01:10:24,020
money than any utility I'm I would guess

1661
01:10:21,359 --> 01:10:27,059
in the United States absolutely and uh

1662
01:10:24,020 --> 01:10:29,400
and we've just crashed the surface but

1663
01:10:27,060 --> 01:10:31,800
it is not easy

1664
01:10:29,399 --> 01:10:34,859
when you cross state lines I mean it's

1665
01:10:31,800 --> 01:10:36,840
uh uh you've got different jurisdictions

1666
01:10:34,859 --> 01:10:39,599
and we should

1667
01:10:36,840 --> 01:10:44,039
this country should be ahead of word is

1668
01:10:39,600 --> 01:10:45,780
in terms of transmission and uh

1669
01:10:44,039 --> 01:10:48,960
we have been the biggest factor in

1670
01:10:45,779 --> 01:10:50,759
helping that uh but why don't you tell

1671
01:10:48,960 --> 01:10:53,399
them a little bit about it sure things

1672
01:10:50,760 --> 01:10:55,980
weren't so there's no question there's

1673
01:10:53,399 --> 01:10:58,259
an energy transformation going on around

1674
01:10:55,979 --> 01:11:01,319
the globe and and as Warren touched on

1675
01:10:58,260 --> 01:11:04,140
in the U.S and in some ways I would hope

1676
01:11:01,319 --> 01:11:06,899
in here in the U.S it would be

1677
01:11:04,140 --> 01:11:09,420
um we'd at least have a a clear plan

1678
01:11:06,899 --> 01:11:11,579
Across the Nation as to how to uh

1679
01:11:09,420 --> 01:11:14,460
approach that but the reality is it is

1680
01:11:11,579 --> 01:11:17,340
state by state uh with some exceptions

1681
01:11:14,460 --> 01:11:19,439
but so as a result when you think of

1682
01:11:17,340 --> 01:11:24,300
Berkshire Hathaway energy

1683
01:11:19,439 --> 01:11:26,698
we we own uh three U.S utilities there

1684
01:11:24,300 --> 01:11:28,980
and and they'll participate in multiple

1685
01:11:26,698 --> 01:11:30,779
States but they're developing plans

1686
01:11:28,979 --> 01:11:33,359
state by state and then trying to

1687
01:11:30,779 --> 01:11:35,939
integrate them across the the various

1688
01:11:33,359 --> 01:11:37,380
States the the opportunities are

1689
01:11:35,939 --> 01:11:40,500
significant because there is a

1690
01:11:37,380 --> 01:11:42,779
transformation going on uh We've

1691
01:11:40,500 --> 01:11:45,960
outlined our goal on on where we're

1692
01:11:42,779 --> 01:11:48,539
going relative to carbon at bhe where

1693
01:11:45,960 --> 01:11:53,460
they'll buy 20 30 reduce their carbon

1694
01:11:48,539 --> 01:11:55,679
footprint by uh 50 relative to 2005 so

1695
01:11:53,460 --> 01:11:57,840
that's the Paris Accord and the standard

1696
01:11:55,679 --> 01:12:00,239
they want to hold the the utility

1697
01:11:57,840 --> 01:12:02,159
industry or the utility companies do and

1698
01:12:00,238 --> 01:12:04,439
and we're well on that path but to

1699
01:12:02,158 --> 01:12:05,939
achieve it is a true Journey uh I've

1700
01:12:04,439 --> 01:12:10,500
often talked to Warren when we bought

1701
01:12:05,939 --> 01:12:13,979
Pacific Corp back in the mid 2000s we

1702
01:12:10,500 --> 01:12:15,779
immediately recognized uh to build a lot

1703
01:12:13,979 --> 01:12:18,059
of renewable energy like we've been

1704
01:12:15,779 --> 01:12:20,460
doing in the midwest in Iowa but that

1705
01:12:18,060 --> 01:12:23,460
was basically in a single stay 8 now

1706
01:12:20,460 --> 01:12:24,899
Pacific Corp were in Six States we

1707
01:12:23,460 --> 01:12:27,658
started that in the back in the mid

1708
01:12:24,899 --> 01:12:29,579
2000s here we are and we laid out a

1709
01:12:27,658 --> 01:12:31,339
great transmission plan here's how we're

1710
01:12:29,579 --> 01:12:34,079
going to build it here's how we're gonna

1711
01:12:31,340 --> 01:12:35,760
uh effectuate it and all the benefits

1712
01:12:34,079 --> 01:12:40,019
for our customers over that period of

1713
01:12:35,760 --> 01:12:42,360
time here we are in 2023 and we have a

1714
01:12:40,020 --> 01:12:43,800
little more than a third of that at the

1715
01:12:42,359 --> 01:12:46,380
time it was a six billion dollar

1716
01:12:43,800 --> 01:12:48,119
transmission project today we have a

1717
01:12:46,380 --> 01:12:50,940
little more than a third of it built and

1718
01:12:48,119 --> 01:12:52,979
we've spent probably closer to seven

1719
01:12:50,939 --> 01:12:54,779
billion dollars and it's the right

1720
01:12:52,979 --> 01:12:56,579
outcome it's still a great outcome for

1721
01:12:54,779 --> 01:12:58,639
our customers but that transmission you

1722
01:12:56,579 --> 01:13:01,198
absolutely as part of the transformation

1723
01:12:58,640 --> 01:13:03,420
you absolutely have to build it to

1724
01:13:01,198 --> 01:13:06,119
remove to move all that renewable energy

1725
01:13:03,420 --> 01:13:09,658
and that's sort of the complexity Warren

1726
01:13:06,119 --> 01:13:11,760
was highlighting it is a uh you you

1727
01:13:09,658 --> 01:13:12,899
can't just wake up one day and and solve

1728
01:13:11,760 --> 01:13:16,079
this problem you start with transmission

1729
01:13:12,899 --> 01:13:18,179
and then you build the resources but at

1730
01:13:16,079 --> 01:13:21,359
that same same company and if we look at

1731
01:13:18,179 --> 01:13:23,579
what we're doing across VA G Energy and

1732
01:13:21,359 --> 01:13:26,579
that energy transformation

1733
01:13:23,579 --> 01:13:30,238
we have 70 billion dollars of known

1734
01:13:26,579 --> 01:13:32,698
projects that are really required to

1735
01:13:30,238 --> 01:13:35,099
properly serve our customers and Achieve

1736
01:13:32,698 --> 01:13:37,859
that type of energy uh transformation

1737
01:13:35,100 --> 01:13:39,840
across those utilities and that and

1738
01:13:37,859 --> 01:13:41,579
that's in the coming next in the coming

1739
01:13:39,840 --> 01:13:43,319
10 years so

1740
01:13:41,579 --> 01:13:44,819
um we have a team that's absolutely up

1741
01:13:43,319 --> 01:13:47,399
to the challenge they're delivering on

1742
01:13:44,819 --> 01:13:50,039
their commitments and it's a very uh

1743
01:13:47,399 --> 01:13:51,899
very good business opportunity for for

1744
01:13:50,039 --> 01:13:54,000
each of our companies and for our

1745
01:13:51,899 --> 01:13:56,279
shareholders because as we deploy that

1746
01:13:54,000 --> 01:13:58,079
Capital we obviously are in a return on

1747
01:13:56,279 --> 01:14:00,479
Equity of it so

1748
01:13:58,079 --> 01:14:02,819
um but it will be a long journey it it

1749
01:14:00,479 --> 01:14:05,519
hap it'll happen over an extended period

1750
01:14:02,819 --> 01:14:07,799
of time and and the further you get out

1751
01:14:05,520 --> 01:14:10,860
there the more dependent more dependent

1752
01:14:07,800 --> 01:14:14,219
upon the uh the evolution of a variety

1753
01:14:10,859 --> 01:14:16,920
of technologies that are progressing but

1754
01:14:14,219 --> 01:14:18,960
not there yet so you you've raised a

1755
01:14:16,920 --> 01:14:20,699
question I want to just take an extra

1756
01:14:18,960 --> 01:14:22,980
minute on because it's so important and

1757
01:14:20,698 --> 01:14:24,359
and I don't really know whether our form

1758
01:14:22,979 --> 01:14:26,039
of government

1759
01:14:24,359 --> 01:14:30,479
uh

1760
01:14:26,039 --> 01:14:33,658
is ideal at all in terms of solving uh

1761
01:14:30,479 --> 01:14:35,279
the problem you described we have solved

1762
01:14:33,658 --> 01:14:39,179
it one time

1763
01:14:35,279 --> 01:14:42,719
in World War II we took a

1764
01:14:39,179 --> 01:14:44,819
country that was semi-lumping along and

1765
01:14:42,719 --> 01:14:46,739
we found ourselves

1766
01:14:44,819 --> 01:14:49,380
in a World War

1767
01:14:46,738 --> 01:14:51,059
and what we did in a World War

1768
01:14:49,380 --> 01:14:53,699
is we brought a bunch of people to

1769
01:14:51,060 --> 01:14:55,260
Washington at a dollar a year

1770
01:14:53,698 --> 01:14:57,238
you know whether it was Sydney Weinberg

1771
01:14:55,260 --> 01:14:59,940
or Goldman's actually you just name him

1772
01:14:57,238 --> 01:15:02,158
and we gave them

1773
01:14:59,939 --> 01:15:03,678
enormous power

1774
01:15:02,158 --> 01:15:06,479
to

1775
01:15:03,679 --> 01:15:09,779
reorient the resources of the United

1776
01:15:06,479 --> 01:15:12,839
States to face the problem that they

1777
01:15:09,779 --> 01:15:14,759
faced which was to create a war machine

1778
01:15:12,840 --> 01:15:17,340
and what they did was they found Henry

1779
01:15:14,760 --> 01:15:19,079
Kaiser you know and told them to build

1780
01:15:17,340 --> 01:15:20,940
ships and they went to the Ford Motor

1781
01:15:19,079 --> 01:15:25,019
Company and said you build tanks and

1782
01:15:20,939 --> 01:15:27,479
some airplanes and they they reordered

1783
01:15:25,020 --> 01:15:29,880
the industrial

1784
01:15:27,479 --> 01:15:31,619
Enterprise of the United States in a way

1785
01:15:29,880 --> 01:15:33,600
that was unbelievable because they had

1786
01:15:31,619 --> 01:15:35,939
the power of the federal government

1787
01:15:33,600 --> 01:15:38,520
and they had the ingenuity

1788
01:15:35,939 --> 01:15:41,279
of American Business and they had the

1789
01:15:38,520 --> 01:15:44,760
facilities of American Business

1790
01:15:41,279 --> 01:15:46,198
and it led to a very successful

1791
01:15:44,760 --> 01:15:48,300
outcome

1792
01:15:46,198 --> 01:15:51,839
but can we do that in a peacetime where

1793
01:15:48,300 --> 01:15:54,300
you've got 50 50 states and you have to

1794
01:15:51,840 --> 01:15:56,880
get them to cooperate and you don't have

1795
01:15:54,300 --> 01:15:58,920
anyone that you can you can issue orders

1796
01:15:56,880 --> 01:16:00,779
but you can't

1797
01:15:58,920 --> 01:16:03,480
you can't designate where the capital

1798
01:16:00,779 --> 01:16:05,219
goes as the other end and you know we

1799
01:16:03,479 --> 01:16:08,099
try and do it with tax incentives and

1800
01:16:05,219 --> 01:16:11,039
all that sort of thing but we haven't we

1801
01:16:08,100 --> 01:16:14,400
haven't created the unity of purpose and

1802
01:16:11,039 --> 01:16:17,760
the Machinery that worked in World War

1803
01:16:14,399 --> 01:16:19,859
II were essentially everybody felt their

1804
01:16:17,760 --> 01:16:21,840
one job was to win the war and we

1805
01:16:19,859 --> 01:16:25,639
figured out how to use our

1806
01:16:21,840 --> 01:16:30,179
industrial capacity to uh in effect

1807
01:16:25,640 --> 01:16:32,640
defeat the axis of powers and uh

1808
01:16:30,179 --> 01:16:36,359
how do you recreate that

1809
01:16:32,640 --> 01:16:39,119
uh uh with

1810
01:16:36,359 --> 01:16:40,738
the present democratic system I I'm not

1811
01:16:39,119 --> 01:16:45,119
sure I know the answer but I sure know

1812
01:16:40,738 --> 01:16:46,738
the problem but um and I think that

1813
01:16:45,119 --> 01:16:49,679
it

1814
01:16:46,738 --> 01:16:52,019
if you can think of a if you've got an

1815
01:16:49,679 --> 01:16:54,960
emergency on your hand I mean you really

1816
01:16:52,020 --> 01:16:57,060
need to re-engineer the engineer energy

1817
01:16:54,960 --> 01:17:00,239
system in the United States I don't

1818
01:16:57,060 --> 01:17:01,920
think I don't think you can do it uh

1819
01:17:00,238 --> 01:17:05,039
without something

1820
01:17:01,920 --> 01:17:06,359
resembling the Machinery the urgency

1821
01:17:05,039 --> 01:17:09,238
whatever

1822
01:17:06,359 --> 01:17:10,259
the capital is there the people are

1823
01:17:09,238 --> 01:17:11,698
there

1824
01:17:10,260 --> 01:17:14,400
uh

1825
01:17:11,698 --> 01:17:18,719
the the objective is obvious

1826
01:17:14,399 --> 01:17:22,079
and uh uh we just don't seem to be able

1827
01:17:18,719 --> 01:17:25,020
to do it in a peacetime where where

1828
01:17:22,079 --> 01:17:30,198
they're used to following a given set of

1829
01:17:25,020 --> 01:17:32,640
a procedure and uh and you know

1830
01:17:30,198 --> 01:17:36,299
China you've got one country and we've

1831
01:17:32,640 --> 01:17:37,380
got we've got 50 states and we got a

1832
01:17:36,300 --> 01:17:38,760
whole different system of government

1833
01:17:37,380 --> 01:17:41,159
that

1834
01:17:38,760 --> 01:17:44,039
we should be up to the test but so far

1835
01:17:41,158 --> 01:17:45,179
it hasn't worked but uh so thank you for

1836
01:17:44,039 --> 01:17:47,219
the question

1837
01:17:45,179 --> 01:17:49,920
Becky

1838
01:17:47,219 --> 01:17:52,500
this question comes from Chris freed in

1839
01:17:49,920 --> 01:17:54,119
Philadelphia he says we know that Greg

1840
01:17:52,500 --> 01:17:56,579
Abel and Ajit Jain are the next

1841
01:17:54,119 --> 01:17:58,800
generation of Berkshire leaders who are

1842
01:17:56,579 --> 01:18:00,238
currently behind Greg and Ajit in their

1843
01:17:58,800 --> 01:18:03,140
prospective roles

1844
01:18:00,238 --> 01:18:03,139
respective

1845
01:18:03,658 --> 01:18:08,158
well that

1846
01:18:05,539 --> 01:18:11,640
will be

1847
01:18:08,158 --> 01:18:12,960
the question that they give their

1848
01:18:11,640 --> 01:18:15,780
well

1849
01:18:12,960 --> 01:18:17,460
Greg will be

1850
01:18:15,779 --> 01:18:19,979
have some things extraordinary

1851
01:18:17,460 --> 01:18:22,319
circumstances but but he's going to

1852
01:18:19,979 --> 01:18:24,479
succeed me and then

1853
01:18:22,319 --> 01:18:26,698
he will have

1854
01:18:24,479 --> 01:18:29,039
be sitting in a position

1855
01:18:26,698 --> 01:18:31,079
where he needs

1856
01:18:29,039 --> 01:18:33,000
his equivalent

1857
01:18:31,079 --> 01:18:34,979
or something close to the corner because

1858
01:18:33,000 --> 01:18:37,500
he's better at many things than I've

1859
01:18:34,979 --> 01:18:39,479
been uh

1860
01:18:37,500 --> 01:18:42,359
he will need that a substitute and when

1861
01:18:39,479 --> 01:18:44,339
the when the question comes word we know

1862
01:18:42,359 --> 01:18:45,719
ajit's opinion on that

1863
01:18:44,340 --> 01:18:48,900
uh

1864
01:18:45,719 --> 01:18:51,239
and but Greg will probably be the one

1865
01:18:48,899 --> 01:18:53,399
that will make that make the final

1866
01:18:51,238 --> 01:18:55,738
decision I mean it says it was being his

1867
01:18:53,399 --> 01:18:58,379
responsibility and

1868
01:18:55,738 --> 01:19:00,779
Ajit will give him his best advice and I

1869
01:18:58,380 --> 01:19:03,719
think the others are very very very high

1870
01:19:00,779 --> 01:19:06,979
that great would follow him so

1871
01:19:03,719 --> 01:19:09,179
but it's not those are not easy

1872
01:19:06,979 --> 01:19:11,279
questions it doesn't like we've

1873
01:19:09,179 --> 01:19:12,658
everybody talks about the executive

1874
01:19:11,279 --> 01:19:14,899
bench and all of that sort of thing

1875
01:19:12,658 --> 01:19:20,279
which is baloney I mean you know

1876
01:19:14,899 --> 01:19:23,819
it they don't have that many people that

1877
01:19:20,279 --> 01:19:26,279
can run five the largest gap net worth

1878
01:19:23,819 --> 01:19:28,439
company and all kinds of diverse

1879
01:19:26,279 --> 01:19:30,119
businesses uh

1880
01:19:28,439 --> 01:19:32,339
but you don't need five people either

1881
01:19:30,119 --> 01:19:33,899
and you need a lot of good operating

1882
01:19:32,340 --> 01:19:36,060
managers and you need somebody at the

1883
01:19:33,899 --> 01:19:37,198
top that allocates capital and make sure

1884
01:19:36,060 --> 01:19:40,260
that you've got the right operating

1885
01:19:37,198 --> 01:19:42,599
manager and we've decided

1886
01:19:40,260 --> 01:19:44,340
to design something where we separate

1887
01:19:42,600 --> 01:19:47,159
the insurance

1888
01:19:44,340 --> 01:19:48,840
and the rest of the business and I think

1889
01:19:47,158 --> 01:19:52,319
it's a very good design

1890
01:19:48,840 --> 01:19:55,079
but they would not be smart

1891
01:19:52,319 --> 01:19:59,039
we wouldn't wish Martin name that

1892
01:19:55,079 --> 01:20:01,559
decision now about the two different

1893
01:19:59,039 --> 01:20:04,198
different uh areas of the business

1894
01:20:01,560 --> 01:20:06,480
because a lot can change between now and

1895
01:20:04,198 --> 01:20:08,579
then and the most likely changes that

1896
01:20:06,479 --> 01:20:10,139
this job changes

1897
01:20:08,579 --> 01:20:13,979
Charlie

1898
01:20:10,140 --> 01:20:16,260
I I got nothing to add

1899
01:20:13,979 --> 01:20:19,619
we have a lot of good people that have

1900
01:20:16,260 --> 01:20:21,300
risen and the Berkshires and City areas

1901
01:20:19,619 --> 01:20:24,359
and

1902
01:20:21,300 --> 01:20:26,300
there's a reason why our operations have

1903
01:20:24,359 --> 01:20:28,799
by and large done better than other big

1904
01:20:26,300 --> 01:20:30,779
conglomerate companies

1905
01:20:28,800 --> 01:20:35,039
and one of them is that

1906
01:20:30,779 --> 01:20:38,819
is that we change managers

1907
01:20:35,039 --> 01:20:42,019
way less frequently than other people do

1908
01:20:38,819 --> 01:20:42,019
and that's helped us

1909
01:20:42,479 --> 01:20:46,198
when Paul Andrews died we know we know

1910
01:20:44,939 --> 01:20:47,879
who he thought

1911
01:20:46,198 --> 01:20:49,559
to take over there but there wasn't any

1912
01:20:47,880 --> 01:20:51,119
reason to

1913
01:20:49,560 --> 01:20:53,159
to announce that I mean that Paul

1914
01:20:51,119 --> 01:20:54,658
Anderson would I wish he'd lived to be

1915
01:20:53,158 --> 01:20:56,158
honored we had we had one of our

1916
01:20:54,658 --> 01:20:58,198
managers die

1917
01:20:56,158 --> 01:21:01,500
not longer going

1918
01:20:58,198 --> 01:21:03,658
how old was he at Karen yeah mid 90s

1919
01:21:01,500 --> 01:21:06,060
Seymour yeah see more away from the

1920
01:21:03,658 --> 01:21:07,920
scene and Seymour

1921
01:21:06,060 --> 01:21:09,199
I wrote him a letter when he was 80 and

1922
01:21:07,920 --> 01:21:12,060
I said you know

1923
01:21:09,198 --> 01:21:14,939
I'm glad you're 80. and I'll write you

1924
01:21:12,060 --> 01:21:17,580
again when you're 90. and uh I wrote him

1925
01:21:14,939 --> 01:21:21,658
again one of his 90 and he didn't make

1926
01:21:17,579 --> 01:21:25,260
it to 100 but but he had a terrific

1927
01:21:21,658 --> 01:21:26,939
uh following him and it really Managed

1928
01:21:25,260 --> 01:21:28,820
IT jointly to some extent as the years

1929
01:21:26,939 --> 01:21:32,279
went by but

1930
01:21:28,819 --> 01:21:34,679
it's Case by case and the main thing to

1931
01:21:32,279 --> 01:21:36,000
do is have the right person running the

1932
01:21:34,679 --> 01:21:37,920
whole place

1933
01:21:36,000 --> 01:21:41,000
okay

1934
01:21:37,920 --> 01:21:41,000
station six

1935
01:21:42,479 --> 01:21:47,039
good morning

1936
01:21:43,800 --> 01:21:48,119
my name's hatch okamot I'm from Miyazaki

1937
01:21:47,039 --> 01:21:51,060
Japan

1938
01:21:48,119 --> 01:21:53,399
a Mr Buffett I was one of the 8 000

1939
01:21:51,060 --> 01:21:55,620
employees at Solomon Brothers that you

1940
01:21:53,399 --> 01:21:58,559
saved I was younger back then I was

1941
01:21:55,619 --> 01:22:01,019
working at seven World Trade Center I've

1942
01:21:58,560 --> 01:22:03,000
always always wanted to thank you in

1943
01:22:01,020 --> 01:22:05,239
person for saving the company its

1944
01:22:03,000 --> 01:22:10,100
employees including myself and my family

1945
01:22:05,238 --> 01:22:10,099
so thank you Mr Buffett thank you

1946
01:22:13,979 --> 01:22:18,299
and and and thank Derek thank Derek

1947
01:22:16,859 --> 01:22:20,279
Martin who actually had been over in

1948
01:22:18,300 --> 01:22:21,960
Japan before that and who I met for the

1949
01:22:20,279 --> 01:22:24,658
first time the day before I put him in

1950
01:22:21,960 --> 01:22:26,100
and he turned out to it wouldn't have it

1951
01:22:24,658 --> 01:22:27,559
wouldn't have worked if Derek hadn't

1952
01:22:26,100 --> 01:22:29,640
come so whatever you taught him in Japan

1953
01:22:27,560 --> 01:22:32,940
thank you

1954
01:22:29,640 --> 01:22:36,719
thank you sir now my question

1955
01:22:32,939 --> 01:22:38,939
time to time you have reminded us to not

1956
01:22:36,719 --> 01:22:41,100
bet against America

1957
01:22:38,939 --> 01:22:44,879
what do you think are the most important

1958
01:22:41,100 --> 01:22:47,460
things for U.S to remain strong and on

1959
01:22:44,880 --> 01:22:50,039
the risk side if the strength of the

1960
01:22:47,460 --> 01:22:52,079
country is undermined what could be the

1961
01:22:50,039 --> 01:22:53,880
reasons

1962
01:22:52,079 --> 01:22:56,698
but we've been

1963
01:22:53,880 --> 01:22:58,980
we've had a lot of tests

1964
01:22:56,698 --> 01:23:01,619
I mean we're such a young country you

1965
01:22:58,979 --> 01:23:02,819
know when you think about Japan and you

1966
01:23:01,619 --> 01:23:03,899
think about the United States it's just

1967
01:23:02,819 --> 01:23:06,238
incredible

1968
01:23:03,899 --> 01:23:09,658
how new we are to the block I mean you

1969
01:23:06,238 --> 01:23:10,799
know what what are we 234 years old

1970
01:23:09,658 --> 01:23:13,559
since

1971
01:23:10,800 --> 01:23:16,199
since we started that that's that's

1972
01:23:13,560 --> 01:23:18,480
that's nothing I mean you know Charlie

1973
01:23:16,198 --> 01:23:21,000
and I combined are two-thirds of we look

1974
01:23:18,479 --> 01:23:23,639
two-thirds of the life of the country

1975
01:23:21,000 --> 01:23:25,500
so and I mean it really has I mean we've

1976
01:23:23,640 --> 01:23:28,199
we've been tested at 46 national

1977
01:23:25,500 --> 01:23:30,060
elections but and and

1978
01:23:28,198 --> 01:23:33,359
we've made some bad choices and we've

1979
01:23:30,060 --> 01:23:35,280
got a Civil War I mean it so the the

1980
01:23:33,359 --> 01:23:37,139
country

1981
01:23:35,279 --> 01:23:39,059
has had an enormous Advantage as though

1982
01:23:37,140 --> 01:23:41,219
in some way because we started with one

1983
01:23:39,060 --> 01:23:44,340
half of one percent of the world's

1984
01:23:41,219 --> 01:23:46,319
population in 1790. and we now have

1985
01:23:44,340 --> 01:23:48,060
something close to 25 percent of the

1986
01:23:46,319 --> 01:23:49,920
world's GDP

1987
01:23:48,060 --> 01:23:51,659
and it wasn't because we had some

1988
01:23:49,920 --> 01:23:53,520
incredible

1989
01:23:51,658 --> 01:23:55,439
advantage in terms of the line it was

1990
01:23:53,520 --> 01:23:56,880
nice to have two oceans and oceans on

1991
01:23:55,439 --> 01:24:00,359
each side back when

1992
01:23:56,880 --> 01:24:03,480
when uh people tried to rule away Rule

1993
01:24:00,359 --> 01:24:06,000
the World by ruling the waves but it

1994
01:24:03,479 --> 01:24:09,119
you know and we've had good neighbors in

1995
01:24:06,000 --> 01:24:12,600
Canada and Mexico but

1996
01:24:09,119 --> 01:24:15,119
it's a miracle and you say how do we

1997
01:24:12,600 --> 01:24:16,679
keep the good parts of the system

1998
01:24:15,119 --> 01:24:19,500
while

1999
01:24:16,679 --> 01:24:22,079
calling out our obvious defects and we

2000
01:24:19,500 --> 01:24:23,698
do it in a very herky-jerky manner but

2001
01:24:22,079 --> 01:24:25,559
net

2002
01:24:23,698 --> 01:24:28,319
the United States

2003
01:24:25,560 --> 01:24:30,480
it's a better place to live

2004
01:24:28,319 --> 01:24:31,500
but almost when I was born by a huge

2005
01:24:30,479 --> 01:24:34,678
Factor

2006
01:24:31,500 --> 01:24:35,760
I mean I just got a root canal a week

2007
01:24:34,679 --> 01:24:37,859
ago

2008
01:24:35,760 --> 01:24:39,900
and I was just thinking I don't know who

2009
01:24:37,859 --> 01:24:42,619
even invented Nova game but I'm for him

2010
01:24:39,899 --> 01:24:46,019
you know I mean

2011
01:24:42,619 --> 01:24:48,059
but in a million ways I mean you can

2012
01:24:46,020 --> 01:24:50,640
roll you can romanticize about the past

2013
01:24:48,060 --> 01:24:53,159
but forget it uh

2014
01:24:50,640 --> 01:24:55,800
it is it is work

2015
01:24:53,158 --> 01:24:58,979
but now we do have an atom bomb and we

2016
01:24:55,800 --> 01:25:00,539
we wish nuclear power yeah you know we

2017
01:24:58,979 --> 01:25:03,718
wish the item had never been split but

2018
01:25:00,539 --> 01:25:07,079
but uh it has been and you can't put it

2019
01:25:03,719 --> 01:25:08,279
back in the bottle so the challenges are

2020
01:25:07,079 --> 01:25:11,158
huge

2021
01:25:08,279 --> 01:25:13,500
our government always looks

2022
01:25:11,158 --> 01:25:15,539
you know my dad was in Congress back in

2023
01:25:13,500 --> 01:25:17,698
the 1940s and

2024
01:25:15,539 --> 01:25:19,679
it looked like a mess then you know it

2025
01:25:17,698 --> 01:25:22,319
all it was unified by the war to some

2026
01:25:19,679 --> 01:25:25,679
degree but it was still very partisan

2027
01:25:22,319 --> 01:25:28,679
now the problem we have I think

2028
01:25:25,679 --> 01:25:31,140
is that partisanship

2029
01:25:28,679 --> 01:25:32,460
and it seems to me has moved toward

2030
01:25:31,140 --> 01:25:34,380
tribalism

2031
01:25:32,460 --> 01:25:37,020
and tribalism

2032
01:25:34,380 --> 01:25:38,460
just doesn't work as well I mean when it

2033
01:25:37,020 --> 01:25:41,580
gets to tribalism you don't even hear

2034
01:25:38,460 --> 01:25:44,460
the other side and tribalism can lead to

2035
01:25:41,579 --> 01:25:46,859
mobs I mean it just it it flows I mean

2036
01:25:44,460 --> 01:25:48,480
you've seen it all Explorers we've seen

2037
01:25:46,859 --> 01:25:49,679
it to a degree here

2038
01:25:48,479 --> 01:25:51,599
so

2039
01:25:49,679 --> 01:25:56,100
we

2040
01:25:51,600 --> 01:25:58,860
we have to refine in a certain way

2041
01:25:56,100 --> 01:26:00,600
our democracy as we go along and we deal

2042
01:25:58,859 --> 01:26:03,119
with the world we live in

2043
01:26:00,600 --> 01:26:04,739
but if I still had a choice of any post

2044
01:26:03,119 --> 01:26:06,539
to be born in the

2045
01:26:04,738 --> 01:26:07,859
in the world I'd want to be born in the

2046
01:26:06,539 --> 01:26:11,399
United States and I'd want to be born

2047
01:26:07,859 --> 01:26:13,819
today I mean it's it is a

2048
01:26:11,399 --> 01:26:16,198
it is a better world than we've ever had

2049
01:26:13,819 --> 01:26:18,359
and with

2050
01:26:16,198 --> 01:26:21,059
present-day Communications we can also

2051
01:26:18,359 --> 01:26:22,439
see it seem much more how terrible it is

2052
01:26:21,060 --> 01:26:26,039
in many ways

2053
01:26:22,439 --> 01:26:27,599
and it's got problems when I was born in

2054
01:26:26,039 --> 01:26:29,399
1930

2055
01:26:27,600 --> 01:26:30,360
there were two billion people in the

2056
01:26:29,399 --> 01:26:33,899
world

2057
01:26:30,359 --> 01:26:34,920
and now there's maybe 7.7 billion and

2058
01:26:33,899 --> 01:26:39,119
growing

2059
01:26:34,920 --> 01:26:42,420
and we went Millennium with really no

2060
01:26:39,119 --> 01:26:45,198
change in population so we and of course

2061
01:26:42,420 --> 01:26:48,539
we've introduced energy into

2062
01:26:45,198 --> 01:26:50,460
uh in an incredible way

2063
01:26:48,539 --> 01:26:51,800
into something where

2064
01:26:50,460 --> 01:26:54,920
we now have

2065
01:26:51,800 --> 01:26:57,360
7.7 billion people using way more energy

2066
01:26:54,920 --> 01:26:59,039
than they did when I was born when there

2067
01:26:57,359 --> 01:27:01,198
were two billion people so

2068
01:26:59,039 --> 01:27:03,420
it's

2069
01:27:01,198 --> 01:27:06,299
it's an exciting world it's a

2070
01:27:03,420 --> 01:27:08,100
challenging world and I I you know I

2071
01:27:06,300 --> 01:27:09,779
don't know the solutions on things I do

2072
01:27:08,100 --> 01:27:12,300
think that we do need to think about

2073
01:27:09,779 --> 01:27:14,099
different solutions in terms of how we

2074
01:27:12,300 --> 01:27:16,380
get important

2075
01:27:14,100 --> 01:27:19,560
problem solved and that we don't kid

2076
01:27:16,380 --> 01:27:21,900
ourselves that something magic will

2077
01:27:19,560 --> 01:27:24,000
happen or that everybody will get

2078
01:27:21,899 --> 01:27:26,939
together and we'll all just cheer and

2079
01:27:24,000 --> 01:27:31,800
they'll go away by 2050 or anything it

2080
01:27:26,939 --> 01:27:34,259
uh uh and how well we adapt to them we

2081
01:27:31,800 --> 01:27:36,060
will see I would say

2082
01:27:34,260 --> 01:27:38,520
so far it doesn't look very promising

2083
01:27:36,060 --> 01:27:40,320
but then I'm sure that

2084
01:27:38,520 --> 01:27:41,880
when Lincoln looks at it

2085
01:27:40,319 --> 01:27:44,039
what was going on in the Civil War

2086
01:27:41,880 --> 01:27:46,500
didn't look very promising either so I

2087
01:27:44,039 --> 01:27:49,019
think that that the U.S is capable of

2088
01:27:46,500 --> 01:27:51,000
doing remarkable things and I think

2089
01:27:49,020 --> 01:27:53,900
I wouldn't surprise me if they do it

2090
01:27:51,000 --> 01:27:56,579
again Charlotte charleming are you

2091
01:27:53,899 --> 01:27:58,819
well I'm slightly less optimistic than

2092
01:27:56,579 --> 01:28:01,139
warranty

2093
01:27:58,819 --> 01:28:04,500
I think the best

2094
01:28:01,139 --> 01:28:06,000
wrote ahead to human happiness as we

2095
01:28:04,500 --> 01:28:07,800
expect less

2096
01:28:06,000 --> 01:28:09,238
I think it's going to get I think it's

2097
01:28:07,800 --> 01:28:13,440
going to get tougher

2098
01:28:09,238 --> 01:28:15,779
and I think the solution of having a

2099
01:28:13,439 --> 01:28:17,460
huge proportion of the young and

2100
01:28:15,779 --> 01:28:18,479
brilliant people all the way to wealth

2101
01:28:17,460 --> 01:28:21,719
management

2102
01:28:18,479 --> 01:28:24,000
is a crazy development in terms of

2103
01:28:21,719 --> 01:28:26,760
its natural consequences for American

2104
01:28:24,000 --> 01:28:30,500
civilization we don't need as many

2105
01:28:26,760 --> 01:28:34,739
wealth managers as we have

2106
01:28:30,500 --> 01:28:36,420
Charlie was born on January 1st 1924.

2107
01:28:34,738 --> 01:28:38,099
and

2108
01:28:36,420 --> 01:28:41,340
you'd hate to go back to that wouldn't

2109
01:28:38,100 --> 01:28:43,920
you Troy yes I would and I I I like more

2110
01:28:41,340 --> 01:28:45,539
worlds managers who were just merely

2111
01:28:43,920 --> 01:28:48,600
reflecting the fact there's more wealth

2112
01:28:45,539 --> 01:28:50,639
but we've got

2113
01:28:48,600 --> 01:28:54,000
I don't like everybody going into wealth

2114
01:28:50,639 --> 01:28:57,859
management of MIT or something it's I

2115
01:28:54,000 --> 01:28:57,859
think the world's a little crazy now

2116
01:28:58,800 --> 01:29:03,679
take your choice okay Becky

2117
01:29:04,800 --> 01:29:08,940
now this question comes from Dennis

2118
01:29:07,020 --> 01:29:11,520
degennaro

2119
01:29:08,939 --> 01:29:13,678
as Warren stated in the 2022 annual

2120
01:29:11,520 --> 01:29:15,780
report Berkshire will always hold a

2121
01:29:13,679 --> 01:29:18,060
boatload of cash in U.S treasury bills

2122
01:29:15,779 --> 01:29:19,979
it will also avoid behavior that could

2123
01:29:18,060 --> 01:29:22,199
result in any uncomfortable cash needs

2124
01:29:19,979 --> 01:29:25,138
at inconvenient times including

2125
01:29:22,198 --> 01:29:27,119
Financial panics and unprecedented

2126
01:29:25,139 --> 01:29:29,639
Insurance losses

2127
01:29:27,119 --> 01:29:31,139
after Warren passes away his a shares

2128
01:29:29,639 --> 01:29:33,779
will be converted into B shares and

2129
01:29:31,139 --> 01:29:35,520
distributed to various foundations these

2130
01:29:33,779 --> 01:29:37,738
foundations will then sell the shares to

2131
01:29:35,520 --> 01:29:39,900
fund their causes Warren estimates it

2132
01:29:37,738 --> 01:29:42,479
will take 12 to 15 years for all his

2133
01:29:39,899 --> 01:29:44,638
shares to be sold I worry that a

2134
01:29:42,479 --> 01:29:46,259
corporate Raider like Cairo icon or a

2135
01:29:44,639 --> 01:29:47,699
group will buy up enough of these shares

2136
01:29:46,260 --> 01:29:49,619
to take control of Berkshire and

2137
01:29:47,698 --> 01:29:51,479
completely disregard Warren's philosophy

2138
01:29:49,619 --> 01:29:54,300
of holding a lot of cash in U.S treasury

2139
01:29:51,479 --> 01:29:56,698
bills and instead be greedy Reckless and

2140
01:29:54,300 --> 01:29:58,079
highly speculative and ruin berkshire's

2141
01:29:56,698 --> 01:30:01,319
position as a rock-solid financial

2142
01:29:58,079 --> 01:30:03,059
Fortress I also worry that changes might

2143
01:30:01,319 --> 01:30:05,519
be made in how Berkshire subsidiaries

2144
01:30:03,060 --> 01:30:07,320
are run do Warren and Charlie worry that

2145
01:30:05,520 --> 01:30:10,139
these things could happen

2146
01:30:07,319 --> 01:30:12,960
well I think it's fair to say we think

2147
01:30:10,139 --> 01:30:16,739
about it plenty but I don't I don't I

2148
01:30:12,960 --> 01:30:18,719
don't I don't worry enormously if we

2149
01:30:16,738 --> 01:30:20,039
it is true that

2150
01:30:18,719 --> 01:30:22,920
that

2151
01:30:20,039 --> 01:30:24,840
uh Greg and the directors will have a

2152
01:30:22,920 --> 01:30:28,199
honeymoon period for a long time because

2153
01:30:24,840 --> 01:30:32,100
simply because uh of the boats it will

2154
01:30:28,198 --> 01:30:33,779
still remain I mean it and and uh

2155
01:30:32,100 --> 01:30:34,980
but it's true that eventually they will

2156
01:30:33,779 --> 01:30:37,019
get judged

2157
01:30:34,979 --> 01:30:39,539
based on how well

2158
01:30:37,020 --> 01:30:40,320
our operation fairs versus others now if

2159
01:30:39,539 --> 01:30:42,238
we don't

2160
01:30:40,319 --> 01:30:44,158
pay any dividends and

2161
01:30:42,238 --> 01:30:46,138
in 12 or 15 years

2162
01:30:44,158 --> 01:30:49,679
you're talking a trillion and a half and

2163
01:30:46,139 --> 01:30:51,420
it would take to take over and and uh

2164
01:30:49,679 --> 01:30:54,060
I think if we can't

2165
01:30:51,420 --> 01:30:55,079
that that limits the group they like to

2166
01:30:54,060 --> 01:30:58,199
think about how much they can borrow

2167
01:30:55,079 --> 01:31:01,139
against it it doesn't work when you uh

2168
01:30:58,198 --> 01:31:04,079
and and some of these

2169
01:31:01,139 --> 01:31:07,020
there's nobody to come close to doing it

2170
01:31:04,079 --> 01:31:09,539
themselves and I think that the

2171
01:31:07,020 --> 01:31:13,500
important thing is that Berkshire

2172
01:31:09,539 --> 01:31:15,359
regarded the be regarded as a National

2173
01:31:13,500 --> 01:31:17,238
Asset rather than a national liability

2174
01:31:15,359 --> 01:31:19,738
we've got to be a plus to the country

2175
01:31:17,238 --> 01:31:22,198
with our form of operation and we

2176
01:31:19,738 --> 01:31:23,698
certainly have got a record

2177
01:31:22,198 --> 01:31:27,299
which

2178
01:31:23,698 --> 01:31:29,638
will then be 12 or 15 years longer done

2179
01:31:27,300 --> 01:31:33,600
with much more Capital more companies

2180
01:31:29,639 --> 01:31:36,840
more things will have happened where our

2181
01:31:33,600 --> 01:31:39,659
hundreds of billions can work its way

2182
01:31:36,840 --> 01:31:42,659
into the economy in terms of lots of

2183
01:31:39,658 --> 01:31:44,460
jobs lots of products lots of behavior

2184
01:31:42,658 --> 01:31:45,839
and it can be compared with other things

2185
01:31:44,460 --> 01:31:48,719
so I

2186
01:31:45,840 --> 01:31:51,600
I I think we went out of if we deserved

2187
01:31:48,719 --> 01:31:53,579
to win out and I think uh I think the

2188
01:31:51,600 --> 01:31:55,679
odds of that happening are very very

2189
01:31:53,579 --> 01:31:58,340
very high

2190
01:31:55,679 --> 01:31:58,340
Charlie

2191
01:31:59,100 --> 01:32:03,960
well we

2192
01:32:01,979 --> 01:32:07,019
I don't spend much time worrying about

2193
01:32:03,960 --> 01:32:08,639
fluent can happen 50 years ago and ever

2194
01:32:07,020 --> 01:32:11,580
I'm dead

2195
01:32:08,639 --> 01:32:14,340
I I think you sort of take care of each

2196
01:32:11,579 --> 01:32:16,619
day's responsibilities pretty well and

2197
01:32:14,340 --> 01:32:18,659
think ahead as well as you can

2198
01:32:16,619 --> 01:32:20,579
and you just take the results as they

2199
01:32:18,658 --> 01:32:24,238
fall

2200
01:32:20,579 --> 01:32:26,460
so I'm I'm philosophical

2201
01:32:24,238 --> 01:32:29,299
but I I'm not I'd be spreading

2202
01:32:26,460 --> 01:32:29,300
unnecessarily

2203
01:32:30,719 --> 01:32:34,739
okay

2204
01:32:32,639 --> 01:32:38,639
neither one of us are worried basically

2205
01:32:34,738 --> 01:32:41,039
uh but we but but we plan we do plan and

2206
01:32:38,639 --> 01:32:42,300
and you know I've got a model in my mind

2207
01:32:41,039 --> 01:32:44,279
of what

2208
01:32:42,300 --> 01:32:46,380
Berkshire has been that model's getting

2209
01:32:44,279 --> 01:32:48,420
it's been modified plenty of times over

2210
01:32:46,380 --> 01:32:51,119
58 years and the one thing I know

2211
01:32:48,420 --> 01:32:52,739
initially is or very quickly was it

2212
01:32:51,119 --> 01:32:55,859
shouldn't be a textile company that was

2213
01:32:52,738 --> 01:32:58,138
that was an important decision and and I

2214
01:32:55,859 --> 01:32:59,880
mean we've just played the hand as a as

2215
01:32:58,139 --> 01:33:03,000
a come along and

2216
01:32:59,880 --> 01:33:05,219
and we made a few really good decisions

2217
01:33:03,000 --> 01:33:08,219
and we will never make a decision that

2218
01:33:05,219 --> 01:33:10,500
kills us only things that are a threat

2219
01:33:08,219 --> 01:33:11,880
to the planet

2220
01:33:10,500 --> 01:33:15,840
um we don't have any answer for those

2221
01:33:11,880 --> 01:33:20,520
but we do we keep ourselves in better

2222
01:33:15,840 --> 01:33:23,639
shape than anybody else that and we just

2223
01:33:20,520 --> 01:33:26,159
aren't going to have big maturities of

2224
01:33:23,639 --> 01:33:27,060
debt that come along we aren't going to

2225
01:33:26,158 --> 01:33:29,939
have

2226
01:33:27,060 --> 01:33:32,039
uh insurance policies that be can be

2227
01:33:29,939 --> 01:33:34,259
cashed in at mass and we will sit with

2228
01:33:32,039 --> 01:33:36,060
the Lord what looks like a huge amount

2229
01:33:34,260 --> 01:33:37,500
of capital and but there's a huge amount

2230
01:33:36,060 --> 01:33:38,940
of capital but there's a huge amount of

2231
01:33:37,500 --> 01:33:42,000
earning power there's a huge amount of

2232
01:33:38,939 --> 01:33:43,198
diversity everything so our business

2233
01:33:42,000 --> 01:33:45,899
model

2234
01:33:43,198 --> 01:33:48,539
will be graded and it'll be graded

2235
01:33:45,899 --> 01:33:52,679
against a lot of a lot of people that

2236
01:33:48,539 --> 01:33:54,179
we'd like to be graded against so uh I

2237
01:33:52,679 --> 01:33:55,199
think we're handling something very

2238
01:33:54,179 --> 01:33:57,239
secure

2239
01:33:55,198 --> 01:34:00,000
over to the Future and I think we've got

2240
01:33:57,238 --> 01:34:01,678
the shareholder base like nobody has I

2241
01:34:00,000 --> 01:34:03,899
mean there isn't anybody in the country

2242
01:34:01,679 --> 01:34:06,179
that I know of unless they've had a

2243
01:34:03,899 --> 01:34:07,920
shareholder an employee-owned company

2244
01:34:06,179 --> 01:34:09,420
prior to going public or something of

2245
01:34:07,920 --> 01:34:13,079
the sort but but

2246
01:34:09,420 --> 01:34:15,840
this is the product of you know the

2247
01:34:13,079 --> 01:34:19,139
58 years of of

2248
01:34:15,840 --> 01:34:20,940
regarding the shareholder as the owner

2249
01:34:19,139 --> 01:34:22,800
of the company

2250
01:34:20,939 --> 01:34:25,979
but what does that mean that means

2251
01:34:22,800 --> 01:34:27,119
having happy customers it means being it

2252
01:34:25,979 --> 01:34:29,579
being means

2253
01:34:27,119 --> 01:34:33,059
being welcomed by your community rather

2254
01:34:29,579 --> 01:34:35,760
than having them turn you away it means

2255
01:34:33,060 --> 01:34:37,560
that the government feels better with

2256
01:34:35,760 --> 01:34:38,880
you if there's a financial crisis

2257
01:34:37,560 --> 01:34:40,920
because you're

2258
01:34:38,880 --> 01:34:43,560
you can provide something that actually

2259
01:34:40,920 --> 01:34:46,739
the company the country can't under some

2260
01:34:43,560 --> 01:34:49,320
circumstances and you'll be there and if

2261
01:34:46,738 --> 01:34:51,779
it may and same time it'll be good good

2262
01:34:49,319 --> 01:34:55,859
for the business uh and we will have

2263
01:34:51,779 --> 01:34:57,960
crises of one sort or another but if

2264
01:34:55,859 --> 01:34:59,399
they aren't challenging the planet which

2265
01:34:57,960 --> 01:35:01,980
worries you in terms of some of the

2266
01:34:59,399 --> 01:35:03,719
threats that we have

2267
01:35:01,979 --> 01:35:05,698
were

2268
01:35:03,719 --> 01:35:06,779
will be a plus to the United States and

2269
01:35:05,698 --> 01:35:09,779
if we're close to the United States

2270
01:35:06,779 --> 01:35:12,439
we'll we'll survive

2271
01:35:09,779 --> 01:35:12,439
okay

2272
01:35:14,460 --> 01:35:17,420
station Seven

2273
01:35:19,560 --> 01:35:25,260
Mr Buffett and Mr Munger thank you for

2274
01:35:23,158 --> 01:35:28,138
having us this weekend

2275
01:35:25,260 --> 01:35:30,659
my name is Beau Clayton and I'm from

2276
01:35:28,139 --> 01:35:33,300
Durham North Carolina

2277
01:35:30,658 --> 01:35:37,019
one of the reasons that we are all here

2278
01:35:33,300 --> 01:35:39,779
is that your great storytellers

2279
01:35:37,020 --> 01:35:41,520
and we carry those stories back home

2280
01:35:39,779 --> 01:35:44,819
with us

2281
01:35:41,520 --> 01:35:49,139
can you please share a couple stories

2282
01:35:44,819 --> 01:35:53,698
that maybe we haven't heard before

2283
01:35:49,139 --> 01:35:58,020
about Mr Abel and Mr Jane

2284
01:35:53,698 --> 01:36:01,859
that capture their character and their

2285
01:35:58,020 --> 01:36:04,340
caliber as leaders

2286
01:36:01,859 --> 01:36:04,339
well

2287
01:36:07,279 --> 01:36:13,099
I'll start out with a Jeep

2288
01:36:10,800 --> 01:36:16,560
he walked into the office and

2289
01:36:13,100 --> 01:36:18,239
1986 and I had gotten the bright idea of

2290
01:36:16,560 --> 01:36:20,580
going into the reinsurance business I

2291
01:36:18,238 --> 01:36:21,539
think in maybe 1969 so I'd stumbled

2292
01:36:20,579 --> 01:36:25,319
along

2293
01:36:21,539 --> 01:36:26,760
uh for 17 years and

2294
01:36:25,319 --> 01:36:31,079
I

2295
01:36:26,760 --> 01:36:35,699
wonderful guy that ran it uh

2296
01:36:31,079 --> 01:36:38,579
uh but he also liked certain Brokers and

2297
01:36:35,698 --> 01:36:39,779
I mean he was running at the traditional

2298
01:36:38,579 --> 01:36:42,359
wave

2299
01:36:39,779 --> 01:36:47,039
top calls top quality and everything

2300
01:36:42,359 --> 01:36:50,219
else but but uh but he fell into he he

2301
01:36:47,039 --> 01:36:53,760
didn't try and change the system he

2302
01:36:50,219 --> 01:36:55,380
tried to improve the system and uh to

2303
01:36:53,760 --> 01:36:59,520
some degree and

2304
01:36:55,380 --> 01:37:01,319
we just we went nowhere 17 17 years

2305
01:36:59,520 --> 01:37:02,699
wandering around to the Wilderness and I

2306
01:37:01,319 --> 01:37:04,920
thought I was

2307
01:37:02,698 --> 01:37:07,678
um I knew we could have something good

2308
01:37:04,920 --> 01:37:12,119
and then the Jeep came in on a Saturday

2309
01:37:07,679 --> 01:37:15,239
and uh uh Mike Goldberg and

2310
01:37:12,119 --> 01:37:18,539
steered him in I think and and uh Mike

2311
01:37:15,238 --> 01:37:22,138
deserves to be enshrined and perpetuity

2312
01:37:18,539 --> 01:37:23,880
for that act and uh I talked with him a

2313
01:37:22,139 --> 01:37:25,859
while I think maybe I was opening the

2314
01:37:23,880 --> 01:37:29,579
mail on Saturday while I talked with him

2315
01:37:25,859 --> 01:37:31,439
and and he had absolutely zero

2316
01:37:29,579 --> 01:37:33,359
experience with

2317
01:37:31,439 --> 01:37:36,119
with insurance

2318
01:37:33,359 --> 01:37:38,819
but it actually seen a good bit of how

2319
01:37:36,119 --> 01:37:40,139
Corporate America operated

2320
01:37:38,819 --> 01:37:43,559
because they

2321
01:37:40,139 --> 01:37:45,659
've been in management consulting and

2322
01:37:43,560 --> 01:37:48,840
after talking with him I

2323
01:37:45,658 --> 01:37:51,839
I knew I'd struck golden and uh

2324
01:37:48,840 --> 01:37:54,239
so I hired him and

2325
01:37:51,840 --> 01:37:58,079
gave him the backing of some money

2326
01:37:54,238 --> 01:38:01,559
uh and we had a very good period in the

2327
01:37:58,079 --> 01:38:05,340
market almost right away for him to act

2328
01:38:01,560 --> 01:38:07,860
and and the Jeep uh

2329
01:38:05,340 --> 01:38:10,860
you know if I had the

2330
01:38:07,859 --> 01:38:14,880
top pick of 10 Insurance managers in the

2331
01:38:10,859 --> 01:38:17,339
world I'm I I could take all ten and

2332
01:38:14,880 --> 01:38:19,859
they wouldn't you can't replace

2333
01:38:17,340 --> 01:38:21,719
Ajit and uh

2334
01:38:19,859 --> 01:38:23,819
we still

2335
01:38:21,719 --> 01:38:25,679
enjoy talking I don't we don't talk as

2336
01:38:23,819 --> 01:38:27,738
frequently as he used to but we should

2337
01:38:25,679 --> 01:38:29,460
talk about every day

2338
01:38:27,738 --> 01:38:31,019
but

2339
01:38:29,460 --> 01:38:33,600
he is

2340
01:38:31,020 --> 01:38:35,520
he's one of a kind and

2341
01:38:33,600 --> 01:38:37,139
you know what if they're going to stick

2342
01:38:35,520 --> 01:38:41,580
around long enough you only need one of

2343
01:38:37,139 --> 01:38:43,500
a kind Paul Andrews stuck around a TTI

2344
01:38:41,579 --> 01:38:45,359
had all the money in the world

2345
01:38:43,500 --> 01:38:47,939
every time I talk to him about getting a

2346
01:38:45,359 --> 01:38:50,279
raise or something of the sort he said

2347
01:38:47,939 --> 01:38:52,919
we'll talk about that next year I just

2348
01:38:50,279 --> 01:38:54,960
he was not what you get when you get the

2349
01:38:52,920 --> 01:38:57,840
top draft picks from the leading

2350
01:38:54,960 --> 01:38:59,399
Business Schools and I will say this I

2351
01:38:57,840 --> 01:39:00,600
have never looked at where anybody went

2352
01:38:59,399 --> 01:39:02,158
to school

2353
01:39:00,600 --> 01:39:04,980
in terms of

2354
01:39:02,158 --> 01:39:06,839
of hiring I mean I I just somebody

2355
01:39:04,979 --> 01:39:09,419
mailed me a resume or something I don't

2356
01:39:06,840 --> 01:39:13,319
care where they went to school uh

2357
01:39:09,420 --> 01:39:15,779
uh and it just so happens that

2358
01:39:13,319 --> 01:39:17,279
that she went to some pretty good

2359
01:39:15,779 --> 01:39:20,219
schools but he isn't the Jeep because he

2360
01:39:17,279 --> 01:39:23,460
went to the schools and uh

2361
01:39:20,219 --> 01:39:26,340
Charlie didn't tell a story or two um

2362
01:39:23,460 --> 01:39:28,460
how'd you find Louis vincenti

2363
01:39:26,340 --> 01:39:32,400
well he was there

2364
01:39:28,460 --> 01:39:35,100
I I but you got to recognize him I asked

2365
01:39:32,399 --> 01:39:37,920
Louie once how he managed to play first

2366
01:39:35,100 --> 01:39:41,159
string football at I think Stanford

2367
01:39:37,920 --> 01:39:42,899
when he only weighed 165 pounds

2368
01:39:41,158 --> 01:39:44,399
and he said well he says I was pretty

2369
01:39:42,899 --> 01:39:45,420
quick

2370
01:39:44,399 --> 01:39:48,420
and

2371
01:39:45,420 --> 01:39:51,060
he was pretty quick but

2372
01:39:48,420 --> 01:39:52,980
we have found a lot of people within our

2373
01:39:51,060 --> 01:39:54,960
companies who were pretty quick

2374
01:39:52,979 --> 01:39:56,879
it's it's a

2375
01:39:54,960 --> 01:39:59,219
yeah we had we had one guy that quit at

2376
01:39:56,880 --> 01:40:02,460
fourth grade didn't in Ben Rosner Am I

2377
01:39:59,219 --> 01:40:05,039
Wrong oh yeah totally self-educated

2378
01:40:02,460 --> 01:40:08,100
Ben Rosner knew more about retailing and

2379
01:40:05,039 --> 01:40:10,439
difficult neighborhoods and anybody

2380
01:40:08,100 --> 01:40:12,179
and

2381
01:40:10,439 --> 01:40:15,419
he watched everything in his business

2382
01:40:12,179 --> 01:40:17,340
like a hawk and he was a he was amazing

2383
01:40:15,420 --> 01:40:19,679
now there was an example

2384
01:40:17,340 --> 01:40:23,880
we never found anybody who could do what

2385
01:40:19,679 --> 01:40:25,560
when band died that billability left us

2386
01:40:23,880 --> 01:40:28,679
yeah and you want a story it's kind of

2387
01:40:25,560 --> 01:40:31,199
interesting because Ben Rosner

2388
01:40:28,679 --> 01:40:34,920
had a partner Leo Simon

2389
01:40:31,198 --> 01:40:36,539
at least Leo Simon was uh Moe

2390
01:40:34,920 --> 01:40:39,719
annenberg's son-in-law

2391
01:40:36,539 --> 01:40:42,179
and Leo therefore

2392
01:40:39,719 --> 01:40:43,739
it was very very very wealthy

2393
01:40:42,179 --> 01:40:46,679
and uh

2394
01:40:43,738 --> 01:40:48,658
and then started with nothing but they

2395
01:40:46,679 --> 01:40:49,800
they liked each other

2396
01:40:48,658 --> 01:40:51,420
and

2397
01:40:49,800 --> 01:40:53,820
one time

2398
01:40:51,420 --> 01:40:56,658
well before they got

2399
01:40:53,819 --> 01:41:00,719
involved in the in the business

2400
01:40:56,658 --> 01:41:03,719
uh the business we bought but they got

2401
01:41:00,719 --> 01:41:07,500
the idea of buying a

2402
01:41:03,719 --> 01:41:09,899
submarine from World War One

2403
01:41:07,500 --> 01:41:12,539
and taking it to the century of progress

2404
01:41:09,899 --> 01:41:14,819
or the World's Fair in effect in Chicago

2405
01:41:12,539 --> 01:41:16,619
I think in 1933

2406
01:41:14,819 --> 01:41:18,539
so they bought the submarine for not

2407
01:41:16,619 --> 01:41:20,039
probably nothing and they figured you

2408
01:41:18,539 --> 01:41:21,719
know the average

2409
01:41:20,039 --> 01:41:24,300
guy from Walmart was going to his first

2410
01:41:21,719 --> 01:41:26,520
World's Fair getting a submarine for a

2411
01:41:24,300 --> 01:41:29,039
quarter or something that they'd pay it

2412
01:41:26,520 --> 01:41:31,260
so they hauled it

2413
01:41:29,039 --> 01:41:33,238
from Florida wherever they got they

2414
01:41:31,260 --> 01:41:34,860
hauled it to Chicago and then they got

2415
01:41:33,238 --> 01:41:37,500
into Chicago

2416
01:41:34,859 --> 01:41:41,279
and they were hauling a submarine down

2417
01:41:37,500 --> 01:41:44,158
the streets of Chicago and it was

2418
01:41:41,279 --> 01:41:47,880
creating traffic problems like nobody

2419
01:41:44,158 --> 01:41:49,618
could imagine so a cop came over

2420
01:41:47,880 --> 01:41:51,000
and he said

2421
01:41:49,618 --> 01:41:53,279
to Ben

2422
01:41:51,000 --> 01:41:58,020
he says what do you think you guys are

2423
01:41:53,279 --> 01:42:00,238
going with a submarine Ben says he says

2424
01:41:58,020 --> 01:42:04,080
well he said you'll have to talk to my

2425
01:42:00,238 --> 01:42:06,178
partner Mr Capone and the cop the cop

2426
01:42:04,079 --> 01:42:09,179
says girl I know just keep going and

2427
01:42:06,179 --> 01:42:10,859
that was that was Ben Roger and then Leo

2428
01:42:09,179 --> 01:42:12,859
Simon died

2429
01:42:10,859 --> 01:42:15,059
and when he died in

2430
01:42:12,859 --> 01:42:19,738
1967 or so

2431
01:42:15,060 --> 01:42:22,139
uh Ben Rosner kept delivering half thee

2432
01:42:19,738 --> 01:42:24,899
prophets to his widow

2433
01:42:22,139 --> 01:42:27,840
who was incredibly Rich of course being

2434
01:42:24,899 --> 01:42:30,118
no Anna birks first born born daughter I

2435
01:42:27,840 --> 01:42:33,480
think I think I think Moe had nine

2436
01:42:30,118 --> 01:42:36,238
nine girls in a row before Waller came

2437
01:42:33,479 --> 01:42:39,178
along the tenth I may be lost by one but

2438
01:42:36,238 --> 01:42:41,759
anyway I went to this fancy

2439
01:42:39,179 --> 01:42:43,739
apartment and anyway

2440
01:42:41,760 --> 01:42:46,860
then

2441
01:42:43,738 --> 01:42:48,779
then kept her in for a half

2442
01:42:46,859 --> 01:42:51,359
the deal and he had her sign the rent

2443
01:42:48,779 --> 01:42:53,399
checks just so she would look like she

2444
01:42:51,359 --> 01:42:55,319
was doing something in this business

2445
01:42:53,399 --> 01:42:57,479
and she didn't need the money obviously

2446
01:42:55,319 --> 01:42:59,340
but he just felt he was obligated once

2447
01:42:57,479 --> 01:43:01,979
his partner Leo died

2448
01:42:59,340 --> 01:43:03,960
and then she started criticizing him

2449
01:43:01,979 --> 01:43:05,218
and at that point

2450
01:43:03,960 --> 01:43:07,980
then

2451
01:43:05,219 --> 01:43:10,980
went to her his lawyer

2452
01:43:07,979 --> 01:43:12,359
was her lawyer actually will felsteiner

2453
01:43:10,979 --> 01:43:14,399
I don't know whatever happened to will

2454
01:43:12,359 --> 01:43:16,019
but he gave me he gave me a call because

2455
01:43:14,399 --> 01:43:18,839
Ben wanted to

2456
01:43:16,020 --> 01:43:22,320
call me because he wanted me to buy it

2457
01:43:18,840 --> 01:43:25,619
and he wanted me if I bought it

2458
01:43:22,319 --> 01:43:26,579
he'd be rid of the partners ex-partner's

2459
01:43:25,618 --> 01:43:31,079
wife

2460
01:43:26,579 --> 01:43:32,519
and uh and he'd gotten he had me and

2461
01:43:31,079 --> 01:43:35,340
Charlie come back

2462
01:43:32,520 --> 01:43:37,199
and we went to will felsteiner's office

2463
01:43:35,340 --> 01:43:39,179
and Ben says I'll work till the end of

2464
01:43:37,198 --> 01:43:40,799
the year and that's all but I'll show

2465
01:43:39,179 --> 01:43:42,420
you this thing for six million bucks and

2466
01:43:40,800 --> 01:43:43,920
I had two million to cash and a couple

2467
01:43:42,420 --> 01:43:45,600
million in real estate and a couple

2468
01:43:43,920 --> 01:43:46,618
million of operating earnings this is

2469
01:43:45,600 --> 01:43:49,320
crazy

2470
01:43:46,618 --> 01:43:50,519
but he fell off he was getting a lousy

2471
01:43:49,319 --> 01:43:53,880
prize

2472
01:43:50,520 --> 01:43:55,679
she was taking a half of the lousy price

2473
01:43:53,880 --> 01:43:57,179
for half the money

2474
01:43:55,679 --> 01:43:59,340
so uh

2475
01:43:57,179 --> 01:44:01,679
uh

2476
01:43:59,340 --> 01:44:03,679
he looked at me at some point

2477
01:44:01,679 --> 01:44:06,840
Charlie you described the rest of it

2478
01:44:03,679 --> 01:44:10,399
again he said I heard here you're the

2479
01:44:06,840 --> 01:44:12,960
fastest draw in the west he says draw

2480
01:44:10,399 --> 01:44:15,960
we're one of the New York lawyer's

2481
01:44:12,960 --> 01:44:18,960
office yeah and this guy is he's selling

2482
01:44:15,960 --> 01:44:20,819
he's selling his baby and and he told us

2483
01:44:18,960 --> 01:44:23,399
he's leaving I got Charlie on this side

2484
01:44:20,819 --> 01:44:24,539
I said if if this guy leaves at the end

2485
01:44:23,399 --> 01:44:26,339
of the year he can throw away every

2486
01:44:24,539 --> 01:44:29,158
psychology book that's ever been written

2487
01:44:26,340 --> 01:44:31,319
I mean it isn't happening and uh so we

2488
01:44:29,158 --> 01:44:32,879
bought it and we lived happily ever

2489
01:44:31,319 --> 01:44:34,439
after with Ben and

2490
01:44:32,880 --> 01:44:36,900
one time

2491
01:44:34,439 --> 01:44:38,339
he was taking me over to see a property

2492
01:44:36,899 --> 01:44:42,658
we had in Brooklyn

2493
01:44:38,340 --> 01:44:44,880
and uh and along the way I said

2494
01:44:42,658 --> 01:44:46,618
uh

2495
01:44:44,880 --> 01:44:47,940
then I

2496
01:44:46,618 --> 01:44:50,279
you know I promised you I wouldn't

2497
01:44:47,939 --> 01:44:52,079
interfere in the business when we

2498
01:44:50,279 --> 01:44:55,139
started and he knew a butt was coming

2499
01:44:52,079 --> 01:44:57,139
and he just said Thank You Warren and

2500
01:44:55,139 --> 01:44:59,940
they're shooting him

2501
01:44:57,139 --> 01:45:01,500
he was a lot of fun we had so many Ben

2502
01:44:59,939 --> 01:45:03,059
Rosner stories but now you've heard one

2503
01:45:01,500 --> 01:45:05,658
that hasn't been published before okay

2504
01:45:03,060 --> 01:45:05,659
Becky

2505
01:45:06,238 --> 01:45:12,959
this question comes from chai gohil

2506
01:45:09,779 --> 01:45:14,519
he writes this is for a G reinsurance

2507
01:45:12,960 --> 01:45:16,800
industry is going through one of the

2508
01:45:14,520 --> 01:45:19,739
hardest pricing environments in the last

2509
01:45:16,800 --> 01:45:21,300
15 years Berkshire historically has

2510
01:45:19,738 --> 01:45:22,979
participated during these stress times

2511
01:45:21,300 --> 01:45:24,960
when economic returns are very

2512
01:45:22,979 --> 01:45:26,579
attractive this year it appears

2513
01:45:24,960 --> 01:45:28,500
Berkshire has not been interested in

2514
01:45:26,579 --> 01:45:30,420
deploying its resources towards property

2515
01:45:28,500 --> 01:45:33,420
cat reinsurance despite such strong

2516
01:45:30,420 --> 01:45:35,880
returns can you elaborate on reasons for

2517
01:45:33,420 --> 01:45:37,739
not participating despite these returns

2518
01:45:35,880 --> 01:45:39,659
and your broader view on how you're

2519
01:45:37,738 --> 01:45:43,879
planning to shape your reinsurance

2520
01:45:39,658 --> 01:45:43,879
business post acquisition of Allegheny

2521
01:45:44,939 --> 01:45:51,539
in terms of Allegheny that's an easy

2522
01:45:47,340 --> 01:45:54,119
response we look we treat our operating

2523
01:45:51,539 --> 01:45:55,859
units independent of each other and as

2524
01:45:54,118 --> 01:45:57,299
far as Allegheny is concerned they have

2525
01:45:55,859 --> 01:45:58,198
a major presence in the reinsurance

2526
01:45:57,300 --> 01:46:00,119
business

2527
01:45:58,198 --> 01:46:03,178
under the brand name of transatlantic

2528
01:46:00,118 --> 01:46:05,158
Ree that company will operate the way

2529
01:46:03,179 --> 01:46:07,020
it's been operating in the past there'll

2530
01:46:05,158 --> 01:46:10,259
be no change in terms of strategy or

2531
01:46:07,020 --> 01:46:12,179
management and they will keep doing what

2532
01:46:10,260 --> 01:46:13,679
they're doing they've been very

2533
01:46:12,179 --> 01:46:15,840
successful and hopefully they'll keep

2534
01:46:13,679 --> 01:46:18,960
being successful

2535
01:46:15,840 --> 01:46:21,420
now in terms of the property cat

2536
01:46:18,960 --> 01:46:23,520
business that I have been active in over

2537
01:46:21,420 --> 01:46:26,399
these last several years you are right

2538
01:46:23,520 --> 01:46:28,139
that the last 15 years has been a

2539
01:46:26,399 --> 01:46:31,379
difficult time prices have not been

2540
01:46:28,139 --> 01:46:33,179
attractive and even though we have had

2541
01:46:31,380 --> 01:46:35,699
some presence in the property cat

2542
01:46:33,179 --> 01:46:38,658
business in the last 15 years it really

2543
01:46:35,698 --> 01:46:41,698
is been minimal

2544
01:46:38,658 --> 01:46:44,519
this December 31st which is a big

2545
01:46:41,698 --> 01:46:46,738
renewal date for Cattery insurance we

2546
01:46:44,520 --> 01:46:49,080
were hoping that we would get a few days

2547
01:46:46,738 --> 01:46:53,099
in the Sun and we'd be able to deploy

2548
01:46:49,079 --> 01:46:55,260
our capital and be able to write some

2549
01:46:53,100 --> 01:46:56,900
fairly attractive business

2550
01:46:55,260 --> 01:46:59,880
as it happened

2551
01:46:56,899 --> 01:47:02,399
towards the end of December till about

2552
01:46:59,880 --> 01:47:04,859
the third week of December I was very

2553
01:47:02,399 --> 01:47:07,738
optimistic that we would get a chance to

2554
01:47:04,859 --> 01:47:09,059
put put several billion dollars on on

2555
01:47:07,738 --> 01:47:12,319
the books

2556
01:47:09,060 --> 01:47:14,760
but in the last 10 days of uh December

2557
01:47:12,319 --> 01:47:17,039
unfortunately a lot of capacity came out

2558
01:47:14,760 --> 01:47:19,739
of the Woodworks pricing that we were

2559
01:47:17,039 --> 01:47:21,960
expecting to realize didn't really come

2560
01:47:19,738 --> 01:47:23,939
and meet our pricing requirements as a

2561
01:47:21,960 --> 01:47:25,980
result of which January 1 was a big

2562
01:47:23,939 --> 01:47:28,439
disappointment we did not write as much

2563
01:47:25,979 --> 01:47:31,559
as we were hoping to write now fast

2564
01:47:28,439 --> 01:47:33,658
forward to April 1 which is another big

2565
01:47:31,560 --> 01:47:36,060
renewal date we

2566
01:47:33,658 --> 01:47:37,559
had a lot of powder dry and we were

2567
01:47:36,060 --> 01:47:40,560
lucky that we kept the powder dry

2568
01:47:37,560 --> 01:47:42,119
because April 1 suddenly prices zoomed

2569
01:47:40,560 --> 01:47:44,280
up again a lot higher than what they

2570
01:47:42,118 --> 01:47:45,839
were on January 1 and started to look

2571
01:47:44,279 --> 01:47:47,279
attractive to us

2572
01:47:45,840 --> 01:47:51,239
so

2573
01:47:47,279 --> 01:47:53,880
now we have a portfolio that is very

2574
01:47:51,238 --> 01:47:56,218
heavily exposed to property catastrophe

2575
01:47:53,880 --> 01:48:00,118
uh to put that in perspective our

2576
01:47:56,219 --> 01:48:03,658
exposure today is almost 50 percent more

2577
01:48:00,118 --> 01:48:07,859
than what it was uh five six months ago

2578
01:48:03,658 --> 01:48:11,399
so you know we I think we have written

2579
01:48:07,859 --> 01:48:13,559
as much as our capacity will allow us to

2580
01:48:11,399 --> 01:48:15,738
write we are very happy with what we've

2581
01:48:13,560 --> 01:48:18,900
written the margins have been healthy

2582
01:48:15,738 --> 01:48:21,379
the only thing that I want to mention to

2583
01:48:18,899 --> 01:48:25,799
you is that while the margins have been

2584
01:48:21,380 --> 01:48:28,800
healthy we have a very unbalanced

2585
01:48:25,800 --> 01:48:30,980
portfolio what that means is if there's

2586
01:48:28,800 --> 01:48:35,100
a big hurricane in Florida

2587
01:48:30,979 --> 01:48:36,839
we will have a very substantial loss as

2588
01:48:35,100 --> 01:48:39,020
opposed to that if we have a very big

2589
01:48:36,840 --> 01:48:41,760
loss anywhere other than Florida

2590
01:48:39,020 --> 01:48:45,600
relative to our competition we will have

2591
01:48:41,760 --> 01:48:47,820
a much smaller loss net net I'm very

2592
01:48:45,600 --> 01:48:49,860
happy with the portfolio it's been a lot

2593
01:48:47,819 --> 01:48:52,079
better it is a lot better than what it's

2594
01:48:49,859 --> 01:48:55,319
been in the past uh I don't know how

2595
01:48:52,079 --> 01:48:57,658
long it'll last and of course

2596
01:48:55,319 --> 01:49:01,579
if the hurricane happens

2597
01:48:57,658 --> 01:49:01,579
in Florida we could lose

2598
01:49:01,618 --> 01:49:05,639
across all the units we could lose as

2599
01:49:03,899 --> 01:49:08,158
much as 15 billion dollars

2600
01:49:05,639 --> 01:49:11,039
and if there isn't a loss we'll make

2601
01:49:08,158 --> 01:49:14,099
several billion dollars as profit

2602
01:49:11,039 --> 01:49:16,260
and LG tell them how long when you

2603
01:49:14,100 --> 01:49:17,400
called me and said you'd like to expose

2604
01:49:16,260 --> 01:49:20,280
us to

2605
01:49:17,399 --> 01:49:23,879
whatever was a couple billion more of of

2606
01:49:20,279 --> 01:49:26,639
exposure how long I took to say yes yeah

2607
01:49:23,880 --> 01:49:29,279
uh so the way we think about our

2608
01:49:26,639 --> 01:49:31,618
exposure is you know in in the property

2609
01:49:29,279 --> 01:49:35,099
in the insurance operations collectively

2610
01:49:31,618 --> 01:49:37,198
across the entire company uh given that

2611
01:49:35,100 --> 01:49:40,560
we have about a little less than 300

2612
01:49:37,198 --> 01:49:41,719
billion of capital we think of that as a

2613
01:49:40,560 --> 01:49:43,860
55

2614
01:49:41,719 --> 01:49:47,158
exposure that we're willing to take on

2615
01:49:43,859 --> 01:49:49,679
so to complete Warren's story

2616
01:49:47,158 --> 01:49:52,500
a few weeks ago we had about 13 billion

2617
01:49:49,679 --> 01:49:55,199
dollars of exposure all across like uh

2618
01:49:52,500 --> 01:49:57,479
the globe and I called up war and I said

2619
01:49:55,198 --> 01:50:00,719
we have to 13 it'll be nice if we can go

2620
01:49:57,479 --> 01:50:02,579
up to 15 that's a good round number and

2621
01:50:00,719 --> 01:50:04,859
that was less than a 30 second phone

2622
01:50:02,579 --> 01:50:06,600
call

2623
01:50:04,859 --> 01:50:09,238
I think Warren said yes without even

2624
01:50:06,600 --> 01:50:13,219
listening to what the numbers

2625
01:50:09,238 --> 01:50:13,218
I hope he calls me again

2626
01:50:13,979 --> 01:50:17,479
okay station eight

2627
01:50:19,139 --> 01:50:23,279
hello

2628
01:50:20,340 --> 01:50:25,800
my name is adal Flores and I've been a

2629
01:50:23,279 --> 01:50:28,920
shareholder for about 16 years and I'm

2630
01:50:25,800 --> 01:50:33,179
coming from Guadalajara Mexico

2631
01:50:28,920 --> 01:50:35,520
my my question is for Warren and Charlie

2632
01:50:33,179 --> 01:50:37,859
companies have the Eternal dilemma

2633
01:50:35,520 --> 01:50:39,719
between bought Building Products that

2634
01:50:37,859 --> 01:50:42,420
can make profits and increase their

2635
01:50:39,719 --> 01:50:44,219
company competitive position in the best

2636
01:50:42,420 --> 01:50:46,020
case you can build products that have

2637
01:50:44,219 --> 01:50:48,600
both characteristics at the same time

2638
01:50:46,020 --> 01:50:50,219
like Google did but most of the time

2639
01:50:48,600 --> 01:50:52,260
companies need to choose between

2640
01:50:50,219 --> 01:50:55,380
short-term profits and long-term

2641
01:50:52,260 --> 01:50:57,179
defensibility for example Amazon was

2642
01:50:55,380 --> 01:51:00,359
focused on building their famous Amazon

2643
01:50:57,179 --> 01:51:03,239
flywheel with limited profits initially

2644
01:51:00,359 --> 01:51:05,399
in order to abstain obtain stronger

2645
01:51:03,238 --> 01:51:07,618
Network effects with the hope of getting

2646
01:51:05,399 --> 01:51:10,319
more defensible profits in the future

2647
01:51:07,618 --> 01:51:11,519
when you invest you constantly speak

2648
01:51:10,319 --> 01:51:14,158
about the importance of building

2649
01:51:11,520 --> 01:51:16,920
competitive modes what advice would you

2650
01:51:14,158 --> 01:51:18,839
give to CEOs about how to balance this

2651
01:51:16,920 --> 01:51:21,000
dilemma which is essentially short-term

2652
01:51:18,840 --> 01:51:22,920
profit versus long-term definitibility

2653
01:51:21,000 --> 01:51:25,020
thank you

2654
01:51:22,920 --> 01:51:27,420
well the answer to control your destiny

2655
01:51:25,020 --> 01:51:29,219
which we've been able to do it uh

2656
01:51:27,420 --> 01:51:32,639
Berkshire so

2657
01:51:29,219 --> 01:51:36,539
we have we feel no pressure

2658
01:51:32,639 --> 01:51:38,880
from Wall Street uh

2659
01:51:36,539 --> 01:51:42,118
you know we don't have investor calls we

2660
01:51:38,880 --> 01:51:43,679
don't have to make promises we we get a

2661
01:51:42,118 --> 01:51:45,839
chance to make our own

2662
01:51:43,679 --> 01:51:48,719
mistakes and and occasionally find

2663
01:51:45,840 --> 01:51:51,300
something that that works well but we

2664
01:51:48,719 --> 01:51:52,859
recognize that the people in this room

2665
01:51:51,300 --> 01:51:56,219
and people like them

2666
01:51:52,859 --> 01:51:58,380
uh are the ones we're working for and

2667
01:51:56,219 --> 01:52:01,859
we're not working for a bunch of people

2668
01:51:58,380 --> 01:52:03,840
that that care about whether we meet the

2669
01:52:01,859 --> 01:52:04,859
quarter estimate or anything so we have

2670
01:52:03,840 --> 01:52:06,239
a freedom

2671
01:52:04,859 --> 01:52:11,158
uh

2672
01:52:06,238 --> 01:52:14,158
that we that we get to use and

2673
01:52:11,158 --> 01:52:16,500
we're interested in men we're interested

2674
01:52:14,158 --> 01:52:17,879
in owning a wonderful business forever

2675
01:52:16,500 --> 01:52:21,359
we'll learn very many wonderful

2676
01:52:17,880 --> 01:52:24,659
businesses but we do learn

2677
01:52:21,359 --> 01:52:26,158
a lot as we go along we we Charlie and I

2678
01:52:24,658 --> 01:52:29,939
have often mentioned how we learn so

2679
01:52:26,158 --> 01:52:32,399
much when we bought C's candy which we

2680
01:52:29,939 --> 01:52:33,779
did but we learned when we bought Ben

2681
01:52:32,399 --> 01:52:36,420
Rogers

2682
01:52:33,779 --> 01:52:37,439
chain of women's dress shops spread all

2683
01:52:36,420 --> 01:52:40,980
over the

2684
01:52:37,439 --> 01:52:43,559
the eastern part of the country we

2685
01:52:40,979 --> 01:52:45,000
learned when we tried them

2686
01:52:43,560 --> 01:52:47,699
getting into the department store

2687
01:52:45,000 --> 01:52:49,618
business back in 1966 and

2688
01:52:47,698 --> 01:52:51,238
as the ink was drawing on our purchase

2689
01:52:49,618 --> 01:52:54,539
price we realized we'd done something

2690
01:52:51,238 --> 01:52:56,939
dumb I mean but we're learning all the

2691
01:52:54,539 --> 01:52:59,698
time how consumers behave

2692
01:52:56,939 --> 01:53:02,759
I'm not going to be able to learn the

2693
01:52:59,698 --> 01:53:06,059
technical aspects of businesses but that

2694
01:53:02,760 --> 01:53:09,840
you know that that be nice if I knew it

2695
01:53:06,060 --> 01:53:13,320
but but it isn't essential and you know

2696
01:53:09,840 --> 01:53:15,779
we are obviously uh

2697
01:53:13,319 --> 01:53:19,979
we've got

2698
01:53:15,779 --> 01:53:22,618
a business at Apple which is larger than

2699
01:53:19,979 --> 01:53:26,339
our energy business and we may only own

2700
01:53:22,618 --> 01:53:29,158
Five Points six or seven percent but our

2701
01:53:26,340 --> 01:53:32,039
ownership goes up every year and I don't

2702
01:53:29,158 --> 01:53:34,319
understand the phone at all but I do

2703
01:53:32,039 --> 01:53:38,039
understand consumer Behavior

2704
01:53:34,319 --> 01:53:40,380
and I know how people think about

2705
01:53:38,039 --> 01:53:43,800
whether to buy a second car I know how

2706
01:53:40,380 --> 01:53:46,199
they go out to different We Own auto

2707
01:53:43,800 --> 01:53:49,380
dealerships we only we're learning all

2708
01:53:46,198 --> 01:53:52,678
the time from all of our businesses how

2709
01:53:49,380 --> 01:53:54,960
people react to Garanimals versus you

2710
01:53:52,679 --> 01:53:58,920
know selling them something else and and

2711
01:53:54,960 --> 01:54:02,819
so seize was a sort of breakthrough but

2712
01:53:58,920 --> 01:54:06,840
but it just we just keep learning uh

2713
01:54:02,819 --> 01:54:09,359
as to more about how people behave and

2714
01:54:06,840 --> 01:54:11,159
how a good business can turn into a bad

2715
01:54:09,359 --> 01:54:15,299
business and how some good businesses

2716
01:54:11,158 --> 01:54:21,238
can maintain uh uh they're competitive

2717
01:54:15,300 --> 01:54:21,900
advantage over time and and so

2718
01:54:21,238 --> 01:54:23,579
um

2719
01:54:21,899 --> 01:54:27,118
we don't

2720
01:54:23,579 --> 01:54:29,880
we don't have some formula that person

2721
01:54:27,118 --> 01:54:31,920
people we just

2722
01:54:29,880 --> 01:54:34,079
but we can also tell them

2723
01:54:31,920 --> 01:54:36,359
in 10 seconds whether it's something of

2724
01:54:34,079 --> 01:54:39,840
Interest I mean with you know when when

2725
01:54:36,359 --> 01:54:41,639
uh I get these calls and we want to send

2726
01:54:39,840 --> 01:54:45,300
decks and all that sort of which is

2727
01:54:41,639 --> 01:54:47,000
nonsense I mean it uh uh it's a bunch of

2728
01:54:45,300 --> 01:54:49,619
guys sitting

2729
01:54:47,000 --> 01:54:51,060
that get paid for drawing up these

2730
01:54:49,618 --> 01:54:52,979
projections of the future and everything

2731
01:54:51,060 --> 01:54:54,539
like that if they knew the future you

2732
01:54:52,979 --> 01:54:56,218
know we don't know the future but we do

2733
01:54:54,539 --> 01:54:58,260
know certain kinds of businesses we know

2734
01:54:56,219 --> 01:55:01,198
what the right price is and we know

2735
01:54:58,260 --> 01:55:05,039
what we think we can project out in

2736
01:55:01,198 --> 01:55:07,259
terms of consumer Behavior Uh and

2737
01:55:05,039 --> 01:55:10,139
consumer and threats

2738
01:55:07,260 --> 01:55:11,340
do a business and then and that's what

2739
01:55:10,139 --> 01:55:14,279
we've been about and that's what we'll

2740
01:55:11,340 --> 01:55:17,279
continue to about we do get

2741
01:55:14,279 --> 01:55:20,219
we don't get smarter over time we get we

2742
01:55:17,279 --> 01:55:22,679
get a little wiser though uh

2743
01:55:20,219 --> 01:55:24,239
following it over time and and you can

2744
01:55:22,679 --> 01:55:26,760
do it while sitting in the office with a

2745
01:55:24,238 --> 01:55:28,379
telephone too which we like Charlie well

2746
01:55:26,760 --> 01:55:31,079
tell them the story of the Japanese

2747
01:55:28,380 --> 01:55:33,300
investment that that should be told

2748
01:55:31,079 --> 01:55:35,100
again that that that's

2749
01:55:33,300 --> 01:55:37,320
that's a nice story

2750
01:55:35,100 --> 01:55:38,340
you know well it was pretty simple I

2751
01:55:37,319 --> 01:55:40,259
mean I

2752
01:55:38,340 --> 01:55:42,179
you know other

2753
01:55:40,260 --> 01:55:44,340
back when I started other people for

2754
01:55:42,179 --> 01:55:46,020
going through Playboy and I was going

2755
01:55:44,340 --> 01:55:49,619
through Moody so that you know basically

2756
01:55:46,020 --> 01:55:52,920
and uh uh there's a movie out called

2757
01:55:49,618 --> 01:55:54,599
Turn every page but which I

2758
01:55:52,920 --> 01:55:56,340
saw again for the second time a couple

2759
01:55:54,600 --> 01:55:58,619
of days ago Lizzie got leaving I

2760
01:55:56,340 --> 01:56:01,139
recommend everybody in this world watch

2761
01:55:58,618 --> 01:56:04,618
that because I turned every page in the

2762
01:56:01,139 --> 01:56:06,659
past and uh I did it for thousands and

2763
01:56:04,618 --> 01:56:08,339
thousands of pages and Moody's and I did

2764
01:56:06,658 --> 01:56:11,399
it at the Department of Public Utilities

2765
01:56:08,340 --> 01:56:13,380
in in Boston I did it in Newton the

2766
01:56:11,399 --> 01:56:18,179
insurance department that it just kept

2767
01:56:13,380 --> 01:56:23,039
turning Pages well that that goes on for

2768
01:56:18,179 --> 01:56:25,980
a while but now we need Big Ideas

2769
01:56:23,039 --> 01:56:27,420
in order to find things and uh and what

2770
01:56:25,979 --> 01:56:29,279
was your question Charlie tell them

2771
01:56:27,420 --> 01:56:32,460
about the Japanese well the Japanese

2772
01:56:29,279 --> 01:56:34,439
thing was was simple I mean it kind of I

2773
01:56:32,460 --> 01:56:35,760
like looking at companies every I mean I

2774
01:56:34,439 --> 01:56:38,519
like looking at

2775
01:56:35,760 --> 01:56:39,780
figures about companies and and here

2776
01:56:38,520 --> 01:56:41,340
were five

2777
01:56:39,779 --> 01:56:43,500
very very

2778
01:56:41,340 --> 01:56:44,579
substantial companies understandable

2779
01:56:43,500 --> 01:56:48,238
companies

2780
01:56:44,579 --> 01:56:50,219
most of them uh maybe all of them we'd

2781
01:56:48,238 --> 01:56:51,658
done business with them in a dozen

2782
01:56:50,219 --> 01:56:55,340
different ways if you go a couple miles

2783
01:56:51,658 --> 01:56:58,859
from where this place is the our last

2784
01:56:55,340 --> 01:57:02,639
coal generating plant was built by one

2785
01:56:58,859 --> 01:57:04,259
of the companies that so

2786
01:57:02,639 --> 01:57:06,179
here they were

2787
01:57:04,260 --> 01:57:08,159
they were sitting

2788
01:57:06,179 --> 01:57:10,139
as a group

2789
01:57:08,158 --> 01:57:11,359
where they were earning we'll say 14

2790
01:57:10,139 --> 01:57:13,980
percent

2791
01:57:11,359 --> 01:57:16,738
uh on what we were going to pay to buy

2792
01:57:13,979 --> 01:57:18,118
them they were paying decent dividends

2793
01:57:16,738 --> 01:57:20,579
they were going to repurchase the shares

2794
01:57:18,118 --> 01:57:22,019
in some cases they owned a whole bunch

2795
01:57:20,579 --> 01:57:24,658
of businesses that we could understand

2796
01:57:22,020 --> 01:57:26,219
as a group although we didn't mean we

2797
01:57:24,658 --> 01:57:27,420
had deep understanding on anything but

2798
01:57:26,219 --> 01:57:29,698
we've seen them operate and everything

2799
01:57:27,420 --> 01:57:31,679
there wasn't anything to it

2800
01:57:29,698 --> 01:57:34,319
and at the same time

2801
01:57:31,679 --> 01:57:37,679
we could take out the currency risk

2802
01:57:34,319 --> 01:57:39,960
by financing in in the

2803
01:57:37,679 --> 01:57:41,880
and that was going to cost us a half of

2804
01:57:39,960 --> 01:57:43,639
one percent well if you get 14 on one

2805
01:57:41,880 --> 01:57:46,980
side a half a percent on the other side

2806
01:57:43,639 --> 01:57:50,639
and you've got money that you know

2807
01:57:46,979 --> 01:57:52,500
forever and they're doing intelligent

2808
01:57:50,639 --> 01:57:53,880
things and they're sizable

2809
01:57:52,500 --> 01:57:55,500
so we just

2810
01:57:53,880 --> 01:57:57,480
started buying them I didn't even

2811
01:57:55,500 --> 01:58:00,359
probably tell Greg until

2812
01:57:57,479 --> 01:58:03,299
maybe six months after we'd gotten going

2813
01:58:00,359 --> 01:58:06,960
and and then we hit five percent

2814
01:58:03,300 --> 01:58:10,739
uh in all of them we announced on my

2815
01:58:06,960 --> 01:58:14,579
birthday and uh at 90th at the we owned

2816
01:58:10,738 --> 01:58:16,919
over five percent and recently went

2817
01:58:14,579 --> 01:58:18,479
over for the first time to visit with

2818
01:58:16,920 --> 01:58:21,000
him and move

2819
01:58:18,479 --> 01:58:23,759
more than pleasantly surprised delighted

2820
01:58:21,000 --> 01:58:27,359
with what we find there and now we own

2821
01:58:23,760 --> 01:58:29,760
7.4 percent of them we won't go over 9.9

2822
01:58:27,359 --> 01:58:31,399
without their agreeing and we sold

2823
01:58:29,760 --> 01:58:36,320
another

2824
01:58:31,399 --> 01:58:36,319
164 or whatever it is uh

2825
01:58:37,139 --> 01:58:42,719
billion of us again would have done for

2826
01:58:40,319 --> 01:58:45,000
us if we only had five billion dollars

2827
01:58:42,719 --> 01:58:46,618
or something and it made 10 billion

2828
01:58:45,000 --> 01:58:49,319
dollars

2829
01:58:46,618 --> 01:58:52,139
simply in that way yeah we would look

2830
01:58:49,319 --> 01:58:53,939
like Heroes now 10 billion just sort of

2831
01:58:52,139 --> 01:58:56,819
disappears as it's

2832
01:58:53,939 --> 01:59:00,118
an Old Dot in person's reports but it's

2833
01:58:56,819 --> 01:59:02,759
fun and it is fun and it is 10 billion

2834
01:59:00,118 --> 01:59:04,460
dollars and Charlie says it keeps and

2835
01:59:02,760 --> 01:59:07,739
Charlie says it keeps me out of bars

2836
01:59:04,460 --> 01:59:09,000
right talk show up about it and I

2837
01:59:07,738 --> 01:59:11,638
probably talked to Charlie about this

2838
01:59:09,000 --> 01:59:13,618
app the year after I started but who

2839
01:59:11,639 --> 01:59:15,239
knows I mean I knew he'd like it I mean

2840
01:59:13,618 --> 01:59:18,839
obviously and and

2841
01:59:15,238 --> 01:59:21,118
uh we try to do every dollar we would do

2842
01:59:18,840 --> 01:59:23,159
we could only do about 10 billion yeah

2843
01:59:21,118 --> 01:59:25,439
yeah well not even that quite that much

2844
01:59:23,158 --> 01:59:27,658
yeah but

2845
01:59:25,439 --> 01:59:29,879
you know we are four or five billion

2846
01:59:27,658 --> 01:59:34,019
ahead plus dividends and we got a carry

2847
01:59:29,880 --> 01:59:35,340
that's terrific and and you know uh and

2848
01:59:34,020 --> 01:59:37,320
they welcome us and they should welcome

2849
01:59:35,340 --> 01:59:38,880
us and but we

2850
01:59:37,319 --> 01:59:40,559
we love it the way they're operating

2851
01:59:38,880 --> 01:59:45,000
we're not there to tell them what to do

2852
01:59:40,560 --> 01:59:47,639
in the least uh uh so

2853
01:59:45,000 --> 01:59:49,800
we didn't and but we did say we never go

2854
01:59:47,639 --> 01:59:52,500
over 9.9 and we mean it and then they

2855
01:59:49,800 --> 01:59:54,840
they know that will be true to our word

2856
01:59:52,500 --> 01:59:57,479
and I went over there partly to

2857
01:59:54,840 --> 01:59:58,860
introduce Greg the those people because

2858
01:59:57,479 --> 02:00:02,098
we're going to be

2859
01:59:58,859 --> 02:00:03,598
Willem 10 20 30 40 years from now and

2860
02:00:02,099 --> 02:00:06,900
they may occasionally find something

2861
02:00:03,599 --> 02:00:09,000
that we can do jointly and they look

2862
02:00:06,899 --> 02:00:12,059
they look forward to doing that we look

2863
02:00:09,000 --> 02:00:14,819
forward to it and in addition we have

2864
02:00:12,060 --> 02:00:15,960
some other operating businesses in Japan

2865
02:00:14,819 --> 02:00:18,238
so

2866
02:00:15,960 --> 02:00:20,579
great gaming

2867
02:00:18,238 --> 02:00:23,098
now the only thing I would add is that

2868
02:00:20,579 --> 02:00:26,340
one has warned you when over there it

2869
02:00:23,099 --> 02:00:27,840
was to build the build the trust with

2870
02:00:26,340 --> 02:00:29,940
these Japanese companies because we do

2871
02:00:27,840 --> 02:00:32,520
hope there's long-term opportunities but

2872
02:00:29,939 --> 02:00:34,500
fundamentally as you highlighted uh

2873
02:00:32,520 --> 02:00:36,719
they're an incredible uh they've been a

2874
02:00:34,500 --> 02:00:39,359
very good investment I'd also highlight

2875
02:00:36,719 --> 02:00:41,279
the five meetings we had were really

2876
02:00:39,359 --> 02:00:43,019
quite remarkable I mean these companies

2877
02:00:41,279 --> 02:00:45,118
the culture and the history around it

2878
02:00:43,020 --> 02:00:46,920
and how proud they are you know there's

2879
02:00:45,118 --> 02:00:49,198
just moments of learning from them so it

2880
02:00:46,920 --> 02:00:50,880
was it was just a great experience to to

2881
02:00:49,198 --> 02:00:52,259
spend really two days with the five

2882
02:00:50,880 --> 02:00:55,079
companies

2883
02:00:52,260 --> 02:00:56,219
and an issue that we intended to be 56

2884
02:00:55,079 --> 02:00:58,198
billion of

2885
02:00:56,219 --> 02:00:59,779
Yen that we were issuing and selling

2886
02:00:58,198 --> 02:01:02,178
turned out to be

2887
02:00:59,779 --> 02:01:04,979
164.4 or something like that

2888
02:01:02,179 --> 02:01:07,380
everything everything's worked so well

2889
02:01:04,979 --> 02:01:10,138
and as Charlie says it

2890
02:01:07,380 --> 02:01:12,480
you know it doesn't move 500 billion of

2891
02:01:10,139 --> 02:01:15,420
net worth that much

2892
02:01:12,479 --> 02:01:16,500
but this one is you know it will keep

2893
02:01:15,420 --> 02:01:19,319
adding

2894
02:01:16,500 --> 02:01:20,520
over the years to the berkshire's value

2895
02:01:19,319 --> 02:01:22,559
with us

2896
02:01:20,520 --> 02:01:27,540
very widespread probably four or five

2897
02:01:22,560 --> 02:01:29,340
hundred million dollars a year and uh

2898
02:01:27,539 --> 02:01:32,579
you know we'll just keep looking for

2899
02:01:29,340 --> 02:01:37,500
more opportunities and

2900
02:01:32,579 --> 02:01:39,420
Japan we have Berkshire is the largest

2901
02:01:37,500 --> 02:01:42,420
borrower

2902
02:01:39,420 --> 02:01:46,560
outside of corporate borrower outside of

2903
02:01:42,420 --> 02:01:49,319
Japan that exists and yeah we didn't set

2904
02:01:46,560 --> 02:01:51,719
out to be that but it's it's turned out

2905
02:01:49,319 --> 02:01:54,599
that way and and we're not done I mean

2906
02:01:51,719 --> 02:01:58,800
it uh you know in terms of

2907
02:01:54,599 --> 02:02:00,900
what may come along there and uh

2908
02:01:58,800 --> 02:02:03,239
and we have some direct operations there

2909
02:02:00,899 --> 02:02:04,379
as I mentioned the

2910
02:02:03,238 --> 02:02:06,500
uh

2911
02:02:04,380 --> 02:02:09,060
and we've got some

2912
02:02:06,500 --> 02:02:10,949
really wonderful Partners working for us

2913
02:02:09,060 --> 02:02:14,159
and I don't have to do anything

2914
02:02:10,949 --> 02:02:16,139
[Laughter]

2915
02:02:14,158 --> 02:02:18,960
okay Becky

2916
02:02:16,139 --> 02:02:20,159
the next question comes from Ellie Amin

2917
02:02:18,960 --> 02:02:23,340
Tibet

2918
02:02:20,158 --> 02:02:26,000
who asks during an episode of investing

2919
02:02:23,340 --> 02:02:28,920
the Templeton way podcast Professor

2920
02:02:26,000 --> 02:02:31,260
damodaran who he respects almost as much

2921
02:02:28,920 --> 02:02:32,819
as Warren and Charlie mentioned that he

2922
02:02:31,260 --> 02:02:34,980
is not comfortable with positions

2923
02:02:32,819 --> 02:02:37,380
becoming a large part of his portfolio

2924
02:02:34,979 --> 02:02:40,259
for example when they reach 25 to 35

2925
02:02:37,380 --> 02:02:42,900
percent he mentioned that apple is now

2926
02:02:40,260 --> 02:02:44,699
35 percent of berkshire's portfolio and

2927
02:02:42,899 --> 02:02:46,920
thinks that that is near a danger zone

2928
02:02:44,698 --> 02:02:49,198
wonders if Warren and Charlie can

2929
02:02:46,920 --> 02:02:51,440
comment I like to make one comment first

2930
02:02:49,198 --> 02:02:55,439
but Charlie will come up with

2931
02:02:51,439 --> 02:02:55,439
yeah but

2932
02:02:57,198 --> 02:03:02,698
apple is not 35 percent of of Berkshire

2933
02:03:00,539 --> 02:03:05,399
portfolio bursar's portfolio includes

2934
02:03:02,698 --> 02:03:08,339
the railroad the energy business or

2935
02:03:05,399 --> 02:03:10,500
animals you name it See's Candy they're

2936
02:03:08,340 --> 02:03:13,199
all businesses and

2937
02:03:10,500 --> 02:03:14,520
uh you know the the good thing about

2938
02:03:13,198 --> 02:03:17,519
Apple

2939
02:03:14,520 --> 02:03:19,320
is that we we can go up they buy in

2940
02:03:17,520 --> 02:03:20,280
their stock and instead of owning 5.6

2941
02:03:19,319 --> 02:03:22,439
percent

2942
02:03:20,279 --> 02:03:23,639
you know they got down to

2943
02:03:22,439 --> 02:03:27,839
I got about

2944
02:03:23,639 --> 02:03:29,579
15 billion 700 and some million shares

2945
02:03:27,840 --> 02:03:30,719
outstanding they get down to 15 and a

2946
02:03:29,579 --> 02:03:33,420
quarter billion without us doing

2947
02:03:30,719 --> 02:03:36,840
anything we've got six percent so we

2948
02:03:33,420 --> 02:03:40,380
can't own more than 100 of the NSF we

2949
02:03:36,840 --> 02:03:43,079
can't own more than 100 of Garanimals or

2950
02:03:40,380 --> 02:03:45,840
See's candy and

2951
02:03:43,079 --> 02:03:47,760
it'd be nice we'd live alone 200 but it

2952
02:03:45,840 --> 02:03:50,699
just isn't doable but they're all the

2953
02:03:47,760 --> 02:03:51,719
same they're good businesses and to

2954
02:03:50,698 --> 02:03:53,879
think that

2955
02:03:51,719 --> 02:03:56,219
are Criterion

2956
02:03:53,880 --> 02:03:58,679
a criteria for

2957
02:03:56,219 --> 02:04:00,779
apple is different than the other

2958
02:03:58,679 --> 02:04:05,158
businesses we own it just happens to be

2959
02:04:00,779 --> 02:04:07,198
A Better Business than any we own and we

2960
02:04:05,158 --> 02:04:08,399
put a fair amount of money in it but we

2961
02:04:07,198 --> 02:04:10,738
haven't got more money in it than we've

2962
02:04:08,399 --> 02:04:13,379
got in the railroad and apple is a

2963
02:04:10,738 --> 02:04:15,598
Better Business our railroad is a very

2964
02:04:13,380 --> 02:04:20,460
good business it's not remotely as good

2965
02:04:15,599 --> 02:04:23,340
as Apple's business but uh Apple

2966
02:04:20,460 --> 02:04:25,679
you know has a position with consumers

2967
02:04:23,340 --> 02:04:27,060
where they're paying

2968
02:04:25,679 --> 02:04:29,279
you know

2969
02:04:27,060 --> 02:04:32,039
maybe they'll pay 1500 bucks or whatever

2970
02:04:29,279 --> 02:04:34,079
it may be for a phone

2971
02:04:32,039 --> 02:04:36,300
and these same people pay 35

2972
02:04:34,079 --> 02:04:38,039
000 for having a second car

2973
02:04:36,300 --> 02:04:40,619
and if they had to give up a second car

2974
02:04:38,039 --> 02:04:42,719
or give up their iPhone they'd give up

2975
02:04:40,618 --> 02:04:44,759
their second car I mean it's an

2976
02:04:42,719 --> 02:04:47,279
extraordinary probably we don't have

2977
02:04:44,760 --> 02:04:50,239
anything like that that we own 100 of

2978
02:04:47,279 --> 02:04:53,399
but we're very very very happy to have

2979
02:04:50,238 --> 02:04:55,259
5.6 or whatever it may be percent and

2980
02:04:53,399 --> 02:04:57,420
we're delighted every tenth of a percent

2981
02:04:55,260 --> 02:04:59,099
that goes up it's like adding a hundred

2982
02:04:57,420 --> 02:05:01,139
million dollars to our earnings I mean

2983
02:04:59,099 --> 02:05:02,819
our share of the earnings and they use

2984
02:05:01,139 --> 02:05:04,560
their earnings to buy out

2985
02:05:02,819 --> 02:05:06,899
our partners which

2986
02:05:04,560 --> 02:05:08,940
we're glad to see them sell out too the

2987
02:05:06,899 --> 02:05:12,479
index funds have to sell they bring the

2988
02:05:08,939 --> 02:05:16,019
number of shares down and uh you know

2989
02:05:12,479 --> 02:05:17,819
I'm good we went up slightly

2990
02:05:16,020 --> 02:05:19,560
last year and

2991
02:05:17,819 --> 02:05:21,658
I made a mistake a couple of years ago

2992
02:05:19,560 --> 02:05:24,500
and I sold some shares when I had

2993
02:05:21,658 --> 02:05:29,158
certain

2994
02:05:24,500 --> 02:05:32,099
reasons why ah games were useful to take

2995
02:05:29,158 --> 02:05:34,799
that year from a tax standpoint but

2996
02:05:32,099 --> 02:05:38,699
having heard having heard me say that it

2997
02:05:34,800 --> 02:05:38,699
was a dumb decision and

2998
02:05:39,179 --> 02:05:42,480
uh

2999
02:05:41,219 --> 02:05:44,340
Charlie you've already given your

3000
02:05:42,479 --> 02:05:45,839
comment about it but but we do not have

3001
02:05:44,340 --> 02:05:47,579
35 percent

3002
02:05:45,840 --> 02:05:50,639
of berkshire's portfolio berkshire's

3003
02:05:47,579 --> 02:05:51,359
portfolio is the funds we have to work

3004
02:05:50,639 --> 02:05:53,340
with

3005
02:05:51,359 --> 02:05:55,618
and we want to own good businesses and

3006
02:05:53,340 --> 02:05:57,420
we also want to have plenty of liquidity

3007
02:05:55,618 --> 02:05:58,920
and beyond that

3008
02:05:57,420 --> 02:06:01,039
you know

3009
02:05:58,920 --> 02:06:03,539
the sky's the limiter or

3010
02:06:01,039 --> 02:06:05,340
are mistakes who knows what the bottom

3011
02:06:03,539 --> 02:06:06,899
is

3012
02:06:05,340 --> 02:06:10,159
Charlie do you want to add anything to

3013
02:06:06,899 --> 02:06:12,539
your earlier comment well

3014
02:06:10,158 --> 02:06:15,658
I think

3015
02:06:12,539 --> 02:06:18,300
one of the inane things is taught in

3016
02:06:15,658 --> 02:06:20,638
modern University education

3017
02:06:18,300 --> 02:06:23,579
is it a vast diversification is

3018
02:06:20,639 --> 02:06:25,079
absolutely mandatory and investing in

3019
02:06:23,579 --> 02:06:27,899
Common Stocks

3020
02:06:25,079 --> 02:06:30,359
that is an insane idea

3021
02:06:27,899 --> 02:06:31,738
it's not that easy to have a vast

3022
02:06:30,359 --> 02:06:33,719
plethora of

3023
02:06:31,738 --> 02:06:36,479
good opportunities that are easily

3024
02:06:33,719 --> 02:06:38,939
identified and if you've only got three

3025
02:06:36,479 --> 02:06:40,259
I'd rather read my best ideas instead of

3026
02:06:38,939 --> 02:06:42,598
my worst

3027
02:06:40,260 --> 02:06:45,060
and

3028
02:06:42,599 --> 02:06:46,260
now some people can't tell their best

3029
02:06:45,060 --> 02:06:48,539
ideas

3030
02:06:46,260 --> 02:06:51,659
from their worst in in the act of

3031
02:06:48,539 --> 02:06:53,639
deciding the investment already is good

3032
02:06:51,658 --> 02:06:54,960
they they get the thing gets better than

3033
02:06:53,639 --> 02:06:57,239
it is

3034
02:06:54,960 --> 02:07:00,118
I think we make fewer mistakes like that

3035
02:06:57,238 --> 02:07:01,799
than other people and that is a blessing

3036
02:07:00,118 --> 02:07:04,859
to us

3037
02:07:01,800 --> 02:07:08,820
it we're not so smart but we kind of

3038
02:07:04,859 --> 02:07:11,158
know where the edge of our smartness is

3039
02:07:08,819 --> 02:07:14,158
that is a very important part of

3040
02:07:11,158 --> 02:07:16,439
practical intelligence and a lot of

3041
02:07:14,158 --> 02:07:18,299
people who are geniuses on IQ tests

3042
02:07:16,439 --> 02:07:21,238
think they're a lot smarter than they

3043
02:07:18,300 --> 02:07:22,500
are and what they are is dangerous

3044
02:07:21,238 --> 02:07:25,919
and

3045
02:07:22,500 --> 02:07:27,840
and but but if you know the edge of your

3046
02:07:25,920 --> 02:07:30,599
own ability pretty well

3047
02:07:27,840 --> 02:07:32,880
you should ignore most of the Notions of

3048
02:07:30,599 --> 02:07:35,340
our experts about

3049
02:07:32,880 --> 02:07:38,239
what I call diversification of

3050
02:07:35,340 --> 02:07:38,239
portfolios

3051
02:07:39,000 --> 02:07:42,479
okay yeah

3052
02:07:46,560 --> 02:07:49,580
station nine

3053
02:07:51,599 --> 02:07:56,460
hi Charlotte hi Charlie and Warren thank

3054
02:07:53,819 --> 02:07:57,779
you for this superb shareholder meeting

3055
02:07:56,460 --> 02:07:59,698
celebration

3056
02:07:57,779 --> 02:08:03,300
my name is David Chung from Hong Kong

3057
02:07:59,698 --> 02:08:06,299
and a proud graduate of Chicago Booth

3058
02:08:03,300 --> 02:08:07,860
I'm also here with my two sons Aiden and

3059
02:08:06,300 --> 02:08:10,920
Ashen who's currently studying

3060
02:08:07,859 --> 02:08:12,420
University of Chicago as a freshman and

3061
02:08:10,920 --> 02:08:15,179
sophomore

3062
02:08:12,420 --> 02:08:18,899
this is my second time attending the

3063
02:08:15,179 --> 02:08:22,139
conference last being 2019 four years

3064
02:08:18,899 --> 02:08:24,479
ago which I was only a guest shareholder

3065
02:08:22,139 --> 02:08:26,579
of my friend Andrew so after the

3066
02:08:24,479 --> 02:08:29,399
shareholder meeting I have decided to

3067
02:08:26,579 --> 02:08:33,420
buy into Berkshire Hathaway which has

3068
02:08:29,399 --> 02:08:37,559
given me a great return of 62 since

3069
02:08:33,420 --> 02:08:39,679
2019. so I want to thank you for that

3070
02:08:37,560 --> 02:08:39,679
thank you

3071
02:08:40,738 --> 02:08:45,899
I have also taken one of your advice to

3072
02:08:43,439 --> 02:08:47,339
give my children a share for each of

3073
02:08:45,899 --> 02:08:49,738
their birthdays

3074
02:08:47,340 --> 02:08:52,400
although they won a Berkshire Hathaway

3075
02:08:49,738 --> 02:08:52,399
eight years

3076
02:08:52,639 --> 02:08:57,380
they will do just fine with pre-shares

3077
02:08:58,859 --> 02:09:03,658
my question is

3078
02:09:00,779 --> 02:09:06,899
how do you see the current U.S China

3079
02:09:03,658 --> 02:09:08,399
internet companies valuation and the

3080
02:09:06,899 --> 02:09:10,679
price disparity

3081
02:09:08,399 --> 02:09:13,460
given there has been many uncertainties

3082
02:09:10,679 --> 02:09:16,560
such as geopolitical tensions

3083
02:09:13,460 --> 02:09:19,618
significant course optimizations with

3084
02:09:16,560 --> 02:09:21,599
lean at U.S tech firms while China

3085
02:09:19,618 --> 02:09:24,559
attack has been through all that already

3086
02:09:21,599 --> 02:09:24,560
thank you

3087
02:09:24,658 --> 02:09:29,039
Charlie I wanna

3088
02:09:26,579 --> 02:09:31,219
well

3089
02:09:29,039 --> 02:09:33,779
there's been some tension in the

3090
02:09:31,219 --> 02:09:38,520
economic relationship of

3091
02:09:33,779 --> 02:09:42,420
the United States and China I think that

3092
02:09:38,520 --> 02:09:45,179
that tension has been wrongly created on

3093
02:09:42,420 --> 02:09:46,980
both sides I think we're equally guilty

3094
02:09:45,179 --> 02:09:48,960
of being stupid

3095
02:09:46,979 --> 02:09:50,339
there's one thing we should do let's get

3096
02:09:48,960 --> 02:09:52,560
along with China

3097
02:09:50,340 --> 02:09:53,940
and we should have a lot of free trade

3098
02:09:52,560 --> 02:09:57,619
with China

3099
02:09:53,939 --> 02:09:57,618
in our mutual interest

3100
02:09:58,139 --> 02:10:03,079
and

3101
02:09:59,819 --> 02:10:03,079
I just can't imagine

3102
02:10:04,319 --> 02:10:09,658
it's just so obvious there's so much

3103
02:10:07,380 --> 02:10:10,800
safety and so much creativity that's

3104
02:10:09,658 --> 02:10:13,019
possible

3105
02:10:10,800 --> 02:10:16,679
think what Apple has

3106
02:10:13,020 --> 02:10:20,099
done by engaging in a

3107
02:10:16,679 --> 02:10:21,599
partnership with China as a big supplier

3108
02:10:20,099 --> 02:10:23,880
yeah

3109
02:10:21,599 --> 02:10:26,460
it's been good for apple and good for

3110
02:10:23,880 --> 02:10:29,099
China that's the kind of business we'll

3111
02:10:26,460 --> 02:10:31,560
be doing with China and more of it and

3112
02:10:29,099 --> 02:10:33,599
with everything that increases the

3113
02:10:31,560 --> 02:10:35,119
tension between the two companies is

3114
02:10:33,599 --> 02:10:38,159
stupid stupid

3115
02:10:35,118 --> 02:10:40,920
you know at least stopped on each side

3116
02:10:38,158 --> 02:10:43,738
and each side ought to respond to the

3117
02:10:40,920 --> 02:10:45,840
other side stupidity with reciprocal

3118
02:10:43,738 --> 02:10:48,000
kindness that's my view

3119
02:10:45,840 --> 02:10:49,860
and it creates one enormous problem of

3120
02:10:48,000 --> 02:10:51,840
course which is that you have the two

3121
02:10:49,859 --> 02:10:53,939
superpowers of the world

3122
02:10:51,840 --> 02:10:56,340
and they know they have to

3123
02:10:53,939 --> 02:10:57,839
get along with each other either one can

3124
02:10:56,340 --> 02:11:00,060
destroy the other

3125
02:10:57,840 --> 02:11:01,560
and they're going to be competitive with

3126
02:11:00,060 --> 02:11:04,199
each other

3127
02:11:01,560 --> 02:11:07,080
uh but part of it

3128
02:11:04,198 --> 02:11:09,539
is trying always in the game like that

3129
02:11:07,079 --> 02:11:12,059
is trying to judge

3130
02:11:09,539 --> 02:11:16,560
how far you can push the other guy

3131
02:11:12,060 --> 02:11:19,679
without them reacting wrong and uh

3132
02:11:16,560 --> 02:11:21,539
you know if either side is a bullying

3133
02:11:19,679 --> 02:11:23,639
some ways they can get away with it to

3134
02:11:21,539 --> 02:11:26,158
an extent because the alternative

3135
02:11:23,639 --> 02:11:27,659
is would drive them both into

3136
02:11:26,158 --> 02:11:29,698
destruction

3137
02:11:27,658 --> 02:11:31,979
but if they push it too far

3138
02:11:29,698 --> 02:11:34,439
they increase the probability that

3139
02:11:31,979 --> 02:11:36,779
something really does go wrong so it's a

3140
02:11:34,439 --> 02:11:37,979
you know it's one of those Game Theory

3141
02:11:36,779 --> 02:11:41,340
dilemmas

3142
02:11:37,979 --> 02:11:43,439
but you really need

3143
02:11:41,340 --> 02:11:44,880
the leader

3144
02:11:43,439 --> 02:11:48,598
of

3145
02:11:44,880 --> 02:11:50,940
both countries uh and you need the

3146
02:11:48,599 --> 02:11:52,560
populace to understand at least the

3147
02:11:50,939 --> 02:11:55,500
general

3148
02:11:52,560 --> 02:11:57,380
situation in which these countries are

3149
02:11:55,500 --> 02:11:59,819
going to operate over the next century

3150
02:11:57,380 --> 02:12:02,460
and know that

3151
02:11:59,819 --> 02:12:04,019
that some leader of the promises too

3152
02:12:02,460 --> 02:12:05,639
much

3153
02:12:04,020 --> 02:12:08,340
couldn't get you on a hell of a lot of

3154
02:12:05,639 --> 02:12:10,079
trouble and that like you know that

3155
02:12:08,340 --> 02:12:11,639
you've got one kind of a system that

3156
02:12:10,079 --> 02:12:13,019
gets this leader one way they've got

3157
02:12:11,639 --> 02:12:14,099
another system that gets his leader

3158
02:12:13,020 --> 02:12:16,020
another way

3159
02:12:14,099 --> 02:12:17,639
and

3160
02:12:16,020 --> 02:12:20,099
keeping

3161
02:12:17,639 --> 02:12:22,319
keeping either side from trying to play

3162
02:12:20,099 --> 02:12:25,440
the game too hard

3163
02:12:22,319 --> 02:12:27,899
uh and thinking the other side will

3164
02:12:25,439 --> 02:12:30,839
will go along

3165
02:12:27,899 --> 02:12:33,059
you know it's like playing chicken you

3166
02:12:30,840 --> 02:12:34,800
know and driving toward a cliff so

3167
02:12:33,060 --> 02:12:37,080
it is

3168
02:12:34,800 --> 02:12:39,779
if you've got any diplomacy skills

3169
02:12:37,079 --> 02:12:41,698
persuasive skills or anything like that

3170
02:12:39,779 --> 02:12:43,738
you really want

3171
02:12:41,698 --> 02:12:45,419
people that will

3172
02:12:43,738 --> 02:12:48,238
convince

3173
02:12:45,420 --> 02:12:49,440
the other country as well as his own or

3174
02:12:48,238 --> 02:12:51,718
her own country

3175
02:12:49,439 --> 02:12:53,939
that that

3176
02:12:51,719 --> 02:12:56,158
this is what we're engaged in we've got

3177
02:12:53,939 --> 02:12:58,319
to do it right we won't give away the

3178
02:12:56,158 --> 02:13:02,219
story but we won't try and take the

3179
02:12:58,319 --> 02:13:04,920
whole story either and it it we we're

3180
02:13:02,219 --> 02:13:07,078
just at the beginning of this uh

3181
02:13:04,920 --> 02:13:08,639
unfortunately and I mean we've we've

3182
02:13:07,078 --> 02:13:11,420
learned what the situation was it used

3183
02:13:08,639 --> 02:13:11,420
to be the Soviet

3184
02:13:11,840 --> 02:13:16,679
mutually assured destruction

3185
02:13:14,520 --> 02:13:18,300
was our policy

3186
02:13:16,679 --> 02:13:20,819
then and

3187
02:13:18,300 --> 02:13:22,199
that kept a lot of things from happening

3188
02:13:20,819 --> 02:13:25,019
but it also came

3189
02:13:22,198 --> 02:13:28,039
with a very very very close call

3190
02:13:25,020 --> 02:13:30,000
uh with Cuba and

3191
02:13:28,039 --> 02:13:32,460
these are not

3192
02:13:30,000 --> 02:13:35,039
you know these are different games than

3193
02:13:32,460 --> 02:13:37,319
existed hundreds of years ago you could

3194
02:13:35,039 --> 02:13:39,479
you know Britain might rule the Caesar

3195
02:13:37,319 --> 02:13:41,578
France or Spain but

3196
02:13:39,479 --> 02:13:43,859
but now you're playing with a game that

3197
02:13:41,578 --> 02:13:46,799
you can't really make

3198
02:13:43,859 --> 02:13:48,059
a huge mistake in and I think that

3199
02:13:46,800 --> 02:13:50,279
that

3200
02:13:48,060 --> 02:13:52,500
should be the better that's understood

3201
02:13:50,279 --> 02:13:54,899
in both countries

3202
02:13:52,500 --> 02:13:56,639
the more the leaders feel that their

3203
02:13:54,899 --> 02:13:58,379
citizenry does

3204
02:13:56,639 --> 02:14:01,139
understand that

3205
02:13:58,380 --> 02:14:02,819
the better off we'll be and that

3206
02:14:01,139 --> 02:14:07,199
a lot of

3207
02:14:02,819 --> 02:14:08,340
democr the the

3208
02:14:07,198 --> 02:14:13,019
uh

3209
02:14:08,340 --> 02:14:16,500
demography or the a lot of

3210
02:14:13,020 --> 02:14:19,380
a lot of inflammatory speaking but a lot

3211
02:14:16,500 --> 02:14:21,779
of authoritarian action I mean that it

3212
02:14:19,380 --> 02:14:23,760
all carries its dangers and

3213
02:14:21,779 --> 02:14:25,380
the world was

3214
02:14:23,760 --> 02:14:28,320
stumbled through

3215
02:14:25,380 --> 02:14:29,760
the years post 1945 with a lot of close

3216
02:14:28,319 --> 02:14:31,439
calls

3217
02:14:29,760 --> 02:14:33,420
from the

3218
02:14:31,439 --> 02:14:35,279
in the nuclear Arena

3219
02:14:33,420 --> 02:14:37,500
and now we've gotten

3220
02:14:35,279 --> 02:14:39,599
pandemics and we've gotten

3221
02:14:37,500 --> 02:14:42,060
we've got cyber and a whole bunch of

3222
02:14:39,599 --> 02:14:43,560
other things so we've got more tools of

3223
02:14:42,060 --> 02:14:45,840
Destruction

3224
02:14:43,560 --> 02:14:47,460
the world's ever had

3225
02:14:45,840 --> 02:14:50,520
and

3226
02:14:47,460 --> 02:14:53,399
it it's imperative that

3227
02:14:50,520 --> 02:14:55,920
China and the United States

3228
02:14:53,399 --> 02:14:58,319
both understand what the game is and

3229
02:14:55,920 --> 02:15:00,960
understand that you can't push too hard

3230
02:14:58,319 --> 02:15:03,118
but working but both places are going to

3231
02:15:00,960 --> 02:15:05,460
be competitive and both can prosper

3232
02:15:03,118 --> 02:15:08,098
that's that's what really is

3233
02:15:05,460 --> 02:15:11,520
that's that's the vision

3234
02:15:08,099 --> 02:15:13,860
that is out there that

3235
02:15:11,520 --> 02:15:15,540
China will have a more wonderful country

3236
02:15:13,859 --> 02:15:17,779
the United States will have a more

3237
02:15:15,539 --> 02:15:20,340
wonderful country and and and

3238
02:15:17,779 --> 02:15:22,198
the two are not

3239
02:15:20,340 --> 02:15:23,460
just compatible they're almost

3240
02:15:22,198 --> 02:15:25,618
imperative

3241
02:15:23,460 --> 02:15:27,840
uh in terms of

3242
02:15:25,618 --> 02:15:31,139
uh what's going to happen in the next

3243
02:15:27,840 --> 02:15:32,699
100 years or so and uh

3244
02:15:31,139 --> 02:15:34,980
uh

3245
02:15:32,698 --> 02:15:36,839
I think that

3246
02:15:34,979 --> 02:15:39,118
the leaders of both countries have got

3247
02:15:36,840 --> 02:15:40,860
an important job and

3248
02:15:39,118 --> 02:15:42,839
and having that

3249
02:15:40,859 --> 02:15:46,799
understood

3250
02:15:42,840 --> 02:15:49,199
and not to do inflammatory things

3251
02:15:46,800 --> 02:15:52,440
and we'll see whether

3252
02:15:49,198 --> 02:15:55,738
the lock that has taken us from 1945 to

3253
02:15:52,439 --> 02:15:59,339
present holds out and and I think we can

3254
02:15:55,738 --> 02:16:01,198
affect to some extent that luck

3255
02:15:59,340 --> 02:16:03,060
and without sure a message we will move

3256
02:16:01,198 --> 02:16:06,178
to Becky

3257
02:16:03,060 --> 02:16:08,099
this question comes from Rohit bellany

3258
02:16:06,179 --> 02:16:10,739
Berkshire bought a substantial position

3259
02:16:08,099 --> 02:16:12,719
in Taiwan semiconductor and contrary to

3260
02:16:10,738 --> 02:16:14,759
its normal holding timeline sold almost

3261
02:16:12,719 --> 02:16:17,279
the entire position within a few short

3262
02:16:14,760 --> 02:16:19,199
months while you cited in a CNBC

3263
02:16:17,279 --> 02:16:21,840
interview that geopolitical issues were

3264
02:16:19,198 --> 02:16:23,819
the Catalyst these issues were seemingly

3265
02:16:21,840 --> 02:16:26,279
no different when you acquired that

3266
02:16:23,819 --> 02:16:28,019
stock so what else if anything changed

3267
02:16:26,279 --> 02:16:30,000
in those few months and prompted The

3268
02:16:28,020 --> 02:16:31,800
Firm to offload close to five billion

3269
02:16:30,000 --> 02:16:32,879
dollars worth of Taiwan semiconductor

3270
02:16:31,800 --> 02:16:34,859
shares

3271
02:16:32,879 --> 02:16:36,358
at Taiwan semiconductor is one of the

3272
02:16:34,859 --> 02:16:38,700
best

3273
02:16:36,359 --> 02:16:41,700
managed companies

3274
02:16:38,700 --> 02:16:44,599
and important companies in the world

3275
02:16:41,700 --> 02:16:46,679
and uh

3276
02:16:44,599 --> 02:16:49,139
there is not

3277
02:16:46,679 --> 02:16:52,620
and I think you'll be able to say the

3278
02:16:49,138 --> 02:16:55,938
same thing 5 or 10 or 20 years from now

3279
02:16:52,620 --> 02:16:58,800
I don't like its location and and uh

3280
02:16:55,939 --> 02:17:00,599
reevaluated that I mean I don't think it

3281
02:16:58,799 --> 02:17:03,539
should be any place but Taiwan although

3282
02:17:00,599 --> 02:17:05,819
they will be obviously opening up

3283
02:17:03,540 --> 02:17:07,500
chip capacity in this country and

3284
02:17:05,819 --> 02:17:10,679
actually one of our subsidiaries that we

3285
02:17:07,500 --> 02:17:14,638
got in Allegheny is is uh is

3286
02:17:10,679 --> 02:17:17,638
participating in in in their Arizona

3287
02:17:14,638 --> 02:17:21,000
uh construction activities but

3288
02:17:17,638 --> 02:17:22,819
uh it's

3289
02:17:21,000 --> 02:17:26,819
uh

3290
02:17:22,819 --> 02:17:26,819
it uh

3291
02:17:27,179 --> 02:17:31,620
it's a question of we would rather have

3292
02:17:30,058 --> 02:17:34,799
the same

3293
02:17:31,620 --> 02:17:37,320
yeah kind of company and they're there's

3294
02:17:34,799 --> 02:17:39,659
nobody in the chip company there's no in

3295
02:17:37,319 --> 02:17:43,920
the chip industry that's in their league

3296
02:17:39,659 --> 02:17:46,859
in our bit at least in my view uh

3297
02:17:43,920 --> 02:17:47,819
and the man that was a 91 year old or so

3298
02:17:46,859 --> 02:17:51,059
that

3299
02:17:47,819 --> 02:17:54,179
connected with us and that I think I

3300
02:17:51,058 --> 02:17:57,619
played Bridge with and and uh in

3301
02:17:54,179 --> 02:18:00,540
Albuquerque and The Marvelous people

3302
02:17:57,620 --> 02:18:02,399
marvelous company but

3303
02:18:00,540 --> 02:18:04,320
I'd rather find a

3304
02:18:02,398 --> 02:18:06,478
marvelous people I won't find it in the

3305
02:18:04,319 --> 02:18:07,439
chip industry but marvelous people and

3306
02:18:06,478 --> 02:18:09,539
marvelous

3307
02:18:07,439 --> 02:18:11,819
uh competitive position and everything

3308
02:18:09,540 --> 02:18:13,740
I'd rather find it in the United States

3309
02:18:11,819 --> 02:18:16,019
I feel

3310
02:18:13,739 --> 02:18:18,058
better about the capital that we've got

3311
02:18:16,019 --> 02:18:22,500
deployed

3312
02:18:18,058 --> 02:18:24,420
in Japan than in Taiwan it uh

3313
02:18:22,500 --> 02:18:27,780
I wish it weren't so but I think that's

3314
02:18:24,420 --> 02:18:29,340
the reality and I've reevaluated that uh

3315
02:18:27,780 --> 02:18:32,340
in the light of certain things that were

3316
02:18:29,340 --> 02:18:34,319
going on try well my view is that we're

3317
02:18:32,340 --> 02:18:36,380
in ought to feel comfortable if he wants

3318
02:18:34,319 --> 02:18:36,379
to

3319
02:18:37,138 --> 02:18:41,420
yeah put that in the minutes

3320
02:18:41,638 --> 02:18:45,500
okay station 10.

3321
02:18:47,459 --> 02:18:51,598
first of all thank you for making our

3322
02:18:50,340 --> 02:18:54,478
lives better

3323
02:18:51,599 --> 02:18:56,239
my name is bogumil Baranowski I'm a

3324
02:18:54,478 --> 02:18:57,840
founding partner of

3325
02:18:56,239 --> 02:19:00,539
New York

3326
02:18:57,840 --> 02:19:02,880
we manage multi-generational family

3327
02:19:00,540 --> 02:19:07,080
fortunes hence my question

3328
02:19:02,879 --> 02:19:10,438
Mr Buffett in 1976 in your tribute to

3329
02:19:07,079 --> 02:19:13,500
Benjamin Graham you wrote Walter lippman

3330
02:19:10,439 --> 02:19:15,599
spoke of men who plant trees that other

3331
02:19:13,500 --> 02:19:18,179
men will sit under

3332
02:19:15,599 --> 02:19:20,159
Ben Graham was such a man

3333
02:19:18,179 --> 02:19:22,920
you're both such people

3334
02:19:20,159 --> 02:19:25,739
could you share with us your 100 Year

3335
02:19:22,920 --> 02:19:27,719
vision for Berkshire it's a question to

3336
02:19:25,739 --> 02:19:29,579
you both

3337
02:19:27,718 --> 02:19:32,938
yeah I would like to add one thing about

3338
02:19:29,579 --> 02:19:35,398
Ben Graham uh

3339
02:19:32,939 --> 02:19:37,559
Ben Graham didn't

3340
02:19:35,398 --> 02:19:40,379
all kinds of things

3341
02:19:37,558 --> 02:19:43,679
for me and I never expected one thing in

3342
02:19:40,379 --> 02:19:47,879
return I may just you name it and he did

3343
02:19:43,679 --> 02:19:50,639
it and and there wasn't any hidden you

3344
02:19:47,879 --> 02:19:55,099
know there's a hint I should say of of

3345
02:19:50,639 --> 02:19:55,099
anything he expected in return and uh

3346
02:19:55,379 --> 02:20:02,579
I I checked

3347
02:19:57,659 --> 02:20:05,819
uh well he wrote a book in 1949

3348
02:20:02,579 --> 02:20:07,739
that in a sense said to me in very

3349
02:20:05,819 --> 02:20:09,779
persuasive terms

3350
02:20:07,739 --> 02:20:11,639
that what I'd been

3351
02:20:09,780 --> 02:20:13,920
spending

3352
02:20:11,639 --> 02:20:16,199
on the previous

3353
02:20:13,920 --> 02:20:19,799
eight or nine years

3354
02:20:16,200 --> 02:20:21,479
working at and loving was all wrong

3355
02:20:19,799 --> 02:20:23,699
and

3356
02:20:21,478 --> 02:20:26,760
that book

3357
02:20:23,700 --> 02:20:29,579
has been I check it every now and then

3358
02:20:26,760 --> 02:20:31,620
on Amazon to where it ranks and you know

3359
02:20:29,579 --> 02:20:33,359
Amazon ranks

3360
02:20:31,620 --> 02:20:35,939
hundreds and hundreds and hundreds of

3361
02:20:33,359 --> 02:20:37,380
thousands of books uh

3362
02:20:35,939 --> 02:20:39,180
by sales

3363
02:20:37,379 --> 02:20:40,858
and

3364
02:20:39,180 --> 02:20:43,920
Ben Graham's book

3365
02:20:40,859 --> 02:20:46,680
has been up there like number 300 or 350

3366
02:20:43,920 --> 02:20:47,520
or something like that forever and there

3367
02:20:46,680 --> 02:20:49,520
isn't

3368
02:20:47,520 --> 02:20:51,659
there isn't any book I got I wrote

3369
02:20:49,520 --> 02:20:53,100
harpercollins and note the other day

3370
02:20:51,659 --> 02:20:54,359
because they're bringing out another

3371
02:20:53,100 --> 02:20:56,520
Edition

3372
02:20:54,359 --> 02:20:57,960
and I asked them how many copies have

3373
02:20:56,520 --> 02:20:59,520
been sold and they said the records

3374
02:20:57,959 --> 02:21:05,099
didn't go back

3375
02:20:59,520 --> 02:21:07,319
far enough but they they had 7.3 million

3376
02:21:05,100 --> 02:21:09,120
copies of this little book

3377
02:21:07,318 --> 02:21:12,139
that changed my life

3378
02:21:09,120 --> 02:21:13,800
and uh uh

3379
02:21:12,139 --> 02:21:15,478
continues

3380
02:21:13,799 --> 02:21:18,599
to outsell every investment book

3381
02:21:15,478 --> 02:21:19,978
investment will come along and you know

3382
02:21:18,600 --> 02:21:22,500
their number

3383
02:21:19,978 --> 02:21:23,459
400 or a thousand or something for a

3384
02:21:22,500 --> 02:21:24,898
while and then all of a sudden they're

3385
02:21:23,459 --> 02:21:29,699
numbered 25

3386
02:21:24,898 --> 02:21:30,959
000 or 200 000 and and this this book

3387
02:21:29,700 --> 02:21:33,840
you know

3388
02:21:30,959 --> 02:21:36,119
in how many areas

3389
02:21:33,840 --> 02:21:38,398
can you find any book

3390
02:21:36,120 --> 02:21:40,140
that has had that sustained position you

3391
02:21:38,398 --> 02:21:42,239
can't you go back and look at number one

3392
02:21:40,139 --> 02:21:45,299
in 1950 or number two or number three

3393
02:21:42,239 --> 02:21:47,219
and you're looking in 51 and 52 they

3394
02:21:45,299 --> 02:21:49,279
don't continue I mean they just don't

3395
02:21:47,219 --> 02:21:51,779
continue uh

3396
02:21:49,280 --> 02:21:55,380
cookbooks maybe one or two of them last

3397
02:21:51,780 --> 02:21:57,960
for a while but there is nothing and

3398
02:21:55,379 --> 02:22:00,179
this book lives on and everybody keeps

3399
02:21:57,959 --> 02:22:02,398
bringing out new books and saying a lot

3400
02:22:00,180 --> 02:22:04,079
of other things but they aren't saying

3401
02:22:02,398 --> 02:22:07,139
anything it's as important as what he

3402
02:22:04,079 --> 02:22:10,978
said in 1949 in this relatively thin

3403
02:22:07,139 --> 02:22:10,978
little book so uh

3404
02:22:11,280 --> 02:22:14,579
our vision

3405
02:22:12,959 --> 02:22:16,739
for Berkshire

3406
02:22:14,579 --> 02:22:18,600
is exactly what we said today we we

3407
02:22:16,739 --> 02:22:20,579
wanted to be a company

3408
02:22:18,600 --> 02:22:23,520
that

3409
02:22:20,579 --> 02:22:24,539
is owned by shareholders and behaves in

3410
02:22:23,520 --> 02:22:27,600
a way

3411
02:22:24,540 --> 02:22:28,740
Society is happy that it exists and not

3412
02:22:27,600 --> 02:22:31,200
unhappy

3413
02:22:28,739 --> 02:22:33,659
and we

3414
02:22:31,200 --> 02:22:35,640
will have unlimited capital

3415
02:22:33,659 --> 02:22:38,398
we'll get lots of talent

3416
02:22:35,639 --> 02:22:42,599
and we've got a base

3417
02:22:38,398 --> 02:22:44,879
that can't be beat and there's no reason

3418
02:22:42,600 --> 02:22:47,939
why it can't be perpetuated just like

3419
02:22:44,879 --> 02:22:51,299
Ben's book and maybe be an example to

3420
02:22:47,939 --> 02:22:54,200
other people and and if so we'll be very

3421
02:22:51,299 --> 02:22:54,199
happy Charlie

3422
02:22:54,359 --> 02:22:58,500
yeah one of the really interesting

3423
02:22:56,040 --> 02:23:00,240
things about vinegar he was a really

3424
02:22:58,500 --> 02:23:03,780
gifted teacher

3425
02:23:00,239 --> 02:23:05,219
a very honorable profession

3426
02:23:03,780 --> 02:23:09,239
and

3427
02:23:05,219 --> 02:23:11,699
that is what has lasted however

3428
02:23:09,239 --> 02:23:13,859
an interesting fact that he was sheepish

3429
02:23:11,700 --> 02:23:16,020
about in his old age was

3430
02:23:13,859 --> 02:23:17,818
that more than half of all the

3431
02:23:16,020 --> 02:23:20,100
investment returned that Benny Graham

3432
02:23:17,818 --> 02:23:24,359
made in his whole life came from one

3433
02:23:20,100 --> 02:23:26,880
stock one growth stock Geico

3434
02:23:24,359 --> 02:23:28,920
Birches subsidiary

3435
02:23:26,879 --> 02:23:32,398
and

3436
02:23:28,920 --> 02:23:34,799
he at the time he operated there were a

3437
02:23:32,398 --> 02:23:36,719
lot of sort of lousy companies that were

3438
02:23:34,799 --> 02:23:39,059
too cheap and you can make a little

3439
02:23:36,719 --> 02:23:42,478
money floating from one to another

3440
02:23:39,059 --> 02:23:45,119
but the big money he made was one growth

3441
02:23:42,478 --> 02:23:46,260
stock buying one undervalued great

3442
02:23:45,120 --> 02:23:49,560
company

3443
02:23:46,260 --> 02:23:52,500
uh is a very good thing as Berkshire is

3444
02:23:49,559 --> 02:23:56,879
found out again and again and again

3445
02:23:52,500 --> 02:24:00,600
and and Ben wrote a post trip to the 49

3446
02:23:56,879 --> 02:24:03,000
Edition pointing out exactly

3447
02:24:00,600 --> 02:24:05,760
that fact and acknowledging it but said

3448
02:24:03,000 --> 02:24:07,859
but also took the some good lessons from

3449
02:24:05,760 --> 02:24:11,760
it you know he said that's the way life

3450
02:24:07,859 --> 02:24:14,340
is that that you prepare and you

3451
02:24:11,760 --> 02:24:16,340
you know you don't lose everything along

3452
02:24:14,340 --> 02:24:19,920
the way and then something comes along

3453
02:24:16,340 --> 02:24:22,559
and Geico came along because

3454
02:24:19,920 --> 02:24:25,559
a banker in Fort Worth at a financial

3455
02:24:22,559 --> 02:24:27,000
Leo Davidson uh

3456
02:24:25,559 --> 02:24:29,159
and I think the banker got three

3457
02:24:27,000 --> 02:24:31,739
quarters of it and I don't mean Leo

3458
02:24:29,159 --> 02:24:34,379
Davis and Leo Goodwin uh who founded

3459
02:24:31,739 --> 02:24:36,420
Geico then called government employees

3460
02:24:34,379 --> 02:24:40,438
insurance company and you can figure out

3461
02:24:36,420 --> 02:24:43,680
the acronym and uh

3462
02:24:40,439 --> 02:24:45,898
the deal almost fell apart the deal was

3463
02:24:43,680 --> 02:24:47,398
as I remember from maybe a million and a

3464
02:24:45,898 --> 02:24:49,978
half or something like a million and a

3465
02:24:47,398 --> 02:24:52,920
quarter and it almost fell apart because

3466
02:24:49,978 --> 02:24:54,059
of a difference of twenty five thousand

3467
02:24:52,920 --> 02:24:55,978
dollars

3468
02:24:54,059 --> 02:24:57,239
in the net worth delivered this is a

3469
02:24:55,978 --> 02:24:59,959
business's

3470
02:24:57,239 --> 02:25:02,879
you know we're tens of billions I mean

3471
02:24:59,959 --> 02:25:05,938
but he pointed out the irony in that too

3472
02:25:02,879 --> 02:25:07,739
I mean he was honest about it was

3473
02:25:05,939 --> 02:25:10,079
totally intellectually honest on about

3474
02:25:07,739 --> 02:25:13,318
us about his

3475
02:25:10,079 --> 02:25:17,340
the failings and but also the strengths

3476
02:25:13,318 --> 02:25:19,920
of his approach and he and that to some

3477
02:25:17,340 --> 02:25:22,318
extent you know Charlie and I have seen

3478
02:25:19,920 --> 02:25:24,960
that in our lives I mean the sort of the

3479
02:25:22,318 --> 02:25:28,199
prepared mind the willingness to

3480
02:25:24,959 --> 02:25:29,879
to act when you need to act and the

3481
02:25:28,200 --> 02:25:32,960
willingness to ignore it every salesman

3482
02:25:29,879 --> 02:25:36,059
in the world and and the imperative norm

3483
02:25:32,959 --> 02:25:37,919
and uh

3484
02:25:36,059 --> 02:25:39,719
is one or two things that make the right

3485
02:25:37,920 --> 02:25:43,260
decision if you make the right decision

3486
02:25:39,719 --> 02:25:46,500
on a spouse I mean you've won the game

3487
02:25:43,260 --> 02:25:49,318
they you know and there's enormous

3488
02:25:46,500 --> 02:25:51,600
important decision and you got all the

3489
02:25:49,318 --> 02:25:53,760
time I mean in the world we got more

3490
02:25:51,600 --> 02:25:57,840
time now than used to have when I was a

3491
02:25:53,760 --> 02:26:00,059
kid to make that decision and and uh

3492
02:25:57,840 --> 02:26:02,579
you know

3493
02:26:00,059 --> 02:26:05,459
I don't know whether a third or

3494
02:26:02,579 --> 02:26:07,920
whatever percentage blow that one you

3495
02:26:05,459 --> 02:26:10,619
know it it is it is really interesting

3496
02:26:07,920 --> 02:26:12,299
the thing to do is just

3497
02:26:10,620 --> 02:26:15,120
keep trying to

3498
02:26:12,299 --> 02:26:16,799
trying to think things through not do

3499
02:26:15,120 --> 02:26:18,960
too many stupid things and

3500
02:26:16,799 --> 02:26:22,099
and sooner or later you have a lot of

3501
02:26:18,959 --> 02:26:22,099
Polo so Charlotte would say

3502
02:26:22,200 --> 02:26:26,220
okay Becky

3503
02:26:24,659 --> 02:26:29,219
all right this question comes from

3504
02:26:26,219 --> 02:26:32,719
terrafter a shareholder in Sierra Vista

3505
02:26:29,219 --> 02:26:35,279
Arizona who is asking a question of Ajit

3506
02:26:32,719 --> 02:26:37,799
wants to know about electric vehicles

3507
02:26:35,280 --> 02:26:40,140
getting insurance from the manufacturer

3508
02:26:37,799 --> 02:26:41,159
instead of car insurance companies a

3509
02:26:40,139 --> 02:26:43,500
recent article in the Wall Street

3510
02:26:41,159 --> 02:26:45,000
Journal shows that though EVS are a

3511
02:26:43,500 --> 02:26:47,280
small but growing percentage of sales

3512
02:26:45,000 --> 02:26:49,799
Tesla and GM are offering their own

3513
02:26:47,280 --> 02:26:53,239
Electric Vehicle Insurance what will

3514
02:26:49,799 --> 02:26:53,239
Geico do to combat this

3515
02:26:53,459 --> 02:26:58,799
yeah so Geico is talking to a number of

3516
02:26:56,520 --> 02:27:01,800
original equipment manufacturers as well

3517
02:26:58,799 --> 02:27:04,019
to try and see how best they can work

3518
02:27:01,799 --> 02:27:05,840
with the auto manufacturer and offer

3519
02:27:04,020 --> 02:27:08,520
insurance at the point of sale

3520
02:27:05,840 --> 02:27:10,398
they haven't been very many success

3521
02:27:08,520 --> 02:27:14,340
stories as yet

3522
02:27:10,398 --> 02:27:17,340
so we'll wait and see you know clearly

3523
02:27:14,340 --> 02:27:19,739
it is a very convenient way to sell auto

3524
02:27:17,340 --> 02:27:22,079
insurance at the point of sale

3525
02:27:19,739 --> 02:27:23,879
but there's a there's a fair amount of

3526
02:27:22,079 --> 02:27:26,100
data that needs to be collected on the

3527
02:27:23,879 --> 02:27:29,398
driver not just the car and that makes

3528
02:27:26,100 --> 02:27:31,979
it a little more complicated so we are

3529
02:27:29,398 --> 02:27:34,739
talking to some auto manufacturers

3530
02:27:31,978 --> 02:27:36,599
ourselves we are hopeful to that we will

3531
02:27:34,739 --> 02:27:38,119
strike a deal with some of them before

3532
02:27:36,600 --> 02:27:42,780
not too long

3533
02:27:38,120 --> 02:27:44,700
Tesla has made NGM they both have talked

3534
02:27:42,780 --> 02:27:46,620
a lot in the press in terms of getting

3535
02:27:44,700 --> 02:27:49,380
into their insurance business and in

3536
02:27:46,620 --> 02:27:50,819
fact GM I think has projected they'll

3537
02:27:49,379 --> 02:27:52,799
write three billion dollars a premium

3538
02:27:50,818 --> 02:27:55,619
which you know it's hard to imagine

3539
02:27:52,799 --> 02:27:58,500
where it'll come from but they're all

3540
02:27:55,620 --> 02:28:01,319
hot to trot I think somebody will find

3541
02:27:58,500 --> 02:28:03,898
the secret sauce before not too long and

3542
02:28:01,318 --> 02:28:06,719
we ourselves are in that race

3543
02:28:03,898 --> 02:28:09,599
yeah I would I would point out that

3544
02:28:06,719 --> 02:28:12,478
General Motors Motors insurance

3545
02:28:09,600 --> 02:28:17,100
for decades and I mean this is not a new

3546
02:28:12,478 --> 02:28:17,099
idea and uh

3547
02:28:18,600 --> 02:28:21,260
Uber

3548
02:28:21,299 --> 02:28:24,059
or a lot of insurance for a while they

3549
02:28:22,799 --> 02:28:26,099
laid it off with somebody and that

3550
02:28:24,059 --> 02:28:28,139
company got killed by it but I and I

3551
02:28:26,100 --> 02:28:29,700
don't know the deal between Uber and

3552
02:28:28,139 --> 02:28:31,379
forget the name of the company that took

3553
02:28:29,700 --> 02:28:34,439
it on the Jeep would probably know but

3554
02:28:31,379 --> 02:28:37,398
yeah James River yeah and

3555
02:28:34,439 --> 02:28:37,398
you know it

3556
02:28:37,920 --> 02:28:42,600
there's there's nothing it is not it's

3557
02:28:40,260 --> 02:28:45,300
not a new idea it's not magic in the

3558
02:28:42,600 --> 02:28:48,600
lease I mean it is hard

3559
02:28:45,299 --> 02:28:52,799
to come up with something that is better

3560
02:28:48,600 --> 02:28:54,979
at missing Max in matching risk to

3561
02:28:52,799 --> 02:29:00,239
reward

3562
02:28:54,978 --> 02:29:01,679
I'm sorry risk to price then then uh a

3563
02:29:00,239 --> 02:29:03,299
bunch of very smart people are doing at

3564
02:29:01,680 --> 02:29:05,579
a progressive and a bunch of very smart

3565
02:29:03,299 --> 02:29:09,840
people are doing it uh to a greater

3566
02:29:05,579 --> 02:29:12,600
extent at Geico and I mean it it is

3567
02:29:09,840 --> 02:29:15,478
it's just it was fascinating to me when

3568
02:29:12,600 --> 02:29:16,739
Uber wanted to do it you know and they

3569
02:29:15,478 --> 02:29:19,500
were going to get their head handed to

3570
02:29:16,739 --> 02:29:22,020
them but they laid off a good bit of it

3571
02:29:19,500 --> 02:29:23,340
and very very substantial percentage of

3572
02:29:22,020 --> 02:29:26,939
it was somebody else who got their head

3573
02:29:23,340 --> 02:29:29,219
out in this way and uh you know and but

3574
02:29:26,939 --> 02:29:33,960
it was a story you know Wall Street

3575
02:29:29,219 --> 02:29:37,858
loves it and uh uh I with

3576
02:29:33,959 --> 02:29:40,858
we've got 80 car dealerships that do a

3577
02:29:37,859 --> 02:29:43,020
lot of business uh and

3578
02:29:40,859 --> 02:29:45,659
you know we've got the people buying the

3579
02:29:43,020 --> 02:29:48,239
car and the place and and

3580
02:29:45,659 --> 02:29:50,939
we form an insurance company around the

3581
02:29:48,239 --> 02:29:54,000
group for some reason that rights

3582
02:29:50,939 --> 02:29:56,340
Insurance you know it it's hard to

3583
02:29:54,000 --> 02:29:59,879
improve on the president's system and

3584
02:29:56,340 --> 02:30:02,639
yeah I I have no it wouldn't I wouldn't

3585
02:29:59,879 --> 02:30:06,119
pay a penny I'd pay to avoid it actually

3586
02:30:02,639 --> 02:30:08,879
I mean uh and go ahead yeah the only

3587
02:30:06,120 --> 02:30:10,920
point I'd like to add is the virgins on

3588
02:30:08,879 --> 02:30:13,500
writing auto insurance are four percent

3589
02:30:10,920 --> 02:30:15,180
which is a very small number and once

3590
02:30:13,500 --> 02:30:17,639
there are more people that are trying to

3591
02:30:15,180 --> 02:30:19,920
take a bite of the Apple it just becomes

3592
02:30:17,639 --> 02:30:24,500
very very difficult to keep all the

3593
02:30:19,920 --> 02:30:24,500
mouths fed in a profitable manner

3594
02:30:25,079 --> 02:30:31,079
yeah you can say the there was one big

3595
02:30:27,840 --> 02:30:33,898
new idea in insurance and property and

3596
02:30:31,079 --> 02:30:36,840
car insurance back in 1920 or so when

3597
02:30:33,898 --> 02:30:38,340
State Farm started and State Farm

3598
02:30:36,840 --> 02:30:41,280
uh

3599
02:30:38,340 --> 02:30:44,280
and still has it next to Berkshire it's

3600
02:30:41,280 --> 02:30:46,859
it's our it's the leader in having net

3601
02:30:44,280 --> 02:30:48,359
worth it's a mutual company but some guy

3602
02:30:46,859 --> 02:30:49,380
just figured that there was a cartel

3603
02:30:48,359 --> 02:30:51,960
running

3604
02:30:49,379 --> 02:30:55,079
car insurance and

3605
02:30:51,959 --> 02:30:58,739
P Farmer for murder is the name of the

3606
02:30:55,079 --> 02:31:00,478
book I think in over in Illinois and he

3607
02:30:58,739 --> 02:31:01,978
created a system where he really took 20

3608
02:31:00,478 --> 02:31:05,459
points or so

3609
02:31:01,978 --> 02:31:07,739
out of the cost and surprise surprise

3610
02:31:05,459 --> 02:31:10,079
areas you know

3611
02:31:07,739 --> 02:31:12,299
and nobody's own stock in State Farm

3612
02:31:10,079 --> 02:31:14,100
it's it's it's an insult to capitalism

3613
02:31:12,299 --> 02:31:16,619
actually everything you learn at the

3614
02:31:14,100 --> 02:31:18,960
business school says it shouldn't work

3615
02:31:16,620 --> 02:31:21,180
because nobody owns it nobody's going

3616
02:31:18,959 --> 02:31:23,279
public with it no nothing but it's got

3617
02:31:21,180 --> 02:31:25,559
more net worth it's almost probably

3618
02:31:23,280 --> 02:31:26,880
double leaving Berkshire out of the

3619
02:31:25,559 --> 02:31:29,939
picture it's probably double the next

3620
02:31:26,879 --> 02:31:33,358
guy and and nobody's really improved on

3621
02:31:29,939 --> 02:31:35,460
their system that much uh so it's

3622
02:31:33,359 --> 02:31:38,460
fascinating how

3623
02:31:35,459 --> 02:31:40,079
people don't really look at the essence

3624
02:31:38,459 --> 02:31:43,919
you know you

3625
02:31:40,079 --> 02:31:45,079
these are cases that that should carry a

3626
02:31:43,920 --> 02:31:47,460
message

3627
02:31:45,079 --> 02:31:49,318
but the truth is in Wall Street anything

3628
02:31:47,459 --> 02:31:51,839
can get the test is whether you can sell

3629
02:31:49,318 --> 02:31:54,840
it or not but if if you can sell it

3630
02:31:51,840 --> 02:31:56,760
it'll get sold and a bunch of insurance

3631
02:31:54,840 --> 02:31:58,978
companies came along got a sold and this

3632
02:31:56,760 --> 02:32:01,318
is this can be a story about this stock

3633
02:31:58,978 --> 02:32:02,879
or that stock and it sounds a good one

3634
02:32:01,318 --> 02:32:06,359
they talked about it at Uber for a while

3635
02:32:02,879 --> 02:32:09,858
and it is it is really interesting the

3636
02:32:06,359 --> 02:32:09,859
investing public does not learn much

3637
02:32:10,620 --> 02:32:14,479
okay station 11.

3638
02:32:15,600 --> 02:32:21,479
hi my name is Jeff Miriam I'm from Edina

3639
02:32:18,299 --> 02:32:23,639
Minnesota we've been coming for years

3640
02:32:21,478 --> 02:32:25,619
to make that Professor from the earlier

3641
02:32:23,639 --> 02:32:29,099
question really nervous half our

3642
02:32:25,620 --> 02:32:32,479
family's wealth is in Berkshire Hathaway

3643
02:32:29,100 --> 02:32:32,479
well let's make Charlie nervous

3644
02:32:32,700 --> 02:32:36,479
that question has to do

3645
02:32:34,379 --> 02:32:38,459
control in the miniature there was a

3646
02:32:36,478 --> 02:32:40,438
question earlier about corporate Raider

3647
02:32:38,459 --> 02:32:42,719
I was more wondering about

3648
02:32:40,439 --> 02:32:46,220
who is actually going to own the voting

3649
02:32:42,719 --> 02:32:49,559
control is it going to be institutions

3650
02:32:46,219 --> 02:32:54,000
Calpers BlackRock are they eventually

3651
02:32:49,559 --> 02:32:55,680
going to get their way with the ESG

3652
02:32:54,000 --> 02:32:57,780
check boxes that we're gonna have to

3653
02:32:55,680 --> 02:32:59,700
check and what should we be thinking

3654
02:32:57,780 --> 02:33:02,399
about that well you're thinking very

3655
02:32:59,700 --> 02:33:05,640
well and uh

3656
02:33:02,398 --> 02:33:08,099
the interesting thing is uh the big

3657
02:33:05,639 --> 02:33:11,099
aggregations look like of course they'd

3658
02:33:08,100 --> 02:33:13,500
be in index funds but

3659
02:33:11,100 --> 02:33:15,359
what indirect funds want is they want a

3660
02:33:13,500 --> 02:33:16,859
world in which

3661
02:33:15,359 --> 02:33:19,020
Society

3662
02:33:16,859 --> 02:33:20,399
doesn't get upset with them about the

3663
02:33:19,020 --> 02:33:24,000
fact they've got all the voting power

3664
02:33:20,398 --> 02:33:25,379
and and I was in the last year or two

3665
02:33:24,000 --> 02:33:27,978
uh

3666
02:33:25,379 --> 02:33:33,719
it's looked like a better idea

3667
02:33:27,978 --> 02:33:35,760
for them not quite togethers uh uh

3668
02:33:33,719 --> 02:33:37,879
What was a

3669
02:33:35,760 --> 02:33:40,739
phrase that Charlie use

3670
02:33:37,879 --> 02:33:43,199
but he backed off a lot yeah they backed

3671
02:33:40,739 --> 02:33:45,318
off a lot and and it's it's in their

3672
02:33:43,200 --> 02:33:48,300
interest to back out off an interesting

3673
02:33:45,318 --> 02:33:51,719
interestingly enough

3674
02:33:48,299 --> 02:33:53,639
and looking at money management

3675
02:33:51,719 --> 02:33:56,039
you know the game

3676
02:33:53,639 --> 02:33:59,939
is not performance it's assets under

3677
02:33:56,040 --> 02:34:01,740
management and index funds produce a

3678
02:33:59,939 --> 02:34:04,020
tiny tiny tiny

3679
02:34:01,739 --> 02:34:07,020
uh fee on assets under management

3680
02:34:04,020 --> 02:34:10,140
because it was pioneered by Vanguard and

3681
02:34:07,020 --> 02:34:12,540
uh and it's

3682
02:34:10,139 --> 02:34:14,639
when it became successful it was very

3683
02:34:12,540 --> 02:34:16,620
easy to replicate not so easy but I mean

3684
02:34:14,639 --> 02:34:18,959
it was inevitable to be

3685
02:34:16,620 --> 02:34:21,600
uh copied

3686
02:34:18,959 --> 02:34:25,379
but it came with a management fee of two

3687
02:34:21,600 --> 02:34:28,739
basis points so what people that have

3688
02:34:25,379 --> 02:34:30,839
offered index funds would really like is

3689
02:34:28,739 --> 02:34:33,600
you to buy their other funds

3690
02:34:30,840 --> 02:34:34,439
or level management money in some other

3691
02:34:33,600 --> 02:34:36,479
way

3692
02:34:34,439 --> 02:34:38,639
so that they get a higher

3693
02:34:36,478 --> 02:34:42,000
higher fee on assets under management

3694
02:34:38,639 --> 02:34:43,858
which of course is exactly why the index

3695
02:34:42,000 --> 02:34:48,120
fund was embedded in the first place but

3696
02:34:43,859 --> 02:34:51,359
so it's gotten it's not a loss leader

3697
02:34:48,120 --> 02:34:53,939
but it is a way to pull money in and

3698
02:34:51,359 --> 02:34:55,200
then you hope that people ignore what

3699
02:34:53,939 --> 02:34:56,579
was said by

3700
02:34:55,200 --> 02:34:58,500
by

3701
02:34:56,579 --> 02:35:02,639
what's the name of you know the John

3702
02:34:58,500 --> 02:35:05,159
Bogle Jack Vogel ignore him and

3703
02:35:02,639 --> 02:35:06,840
essentially they give up the I say idea

3704
02:35:05,159 --> 02:35:08,280
that will offer you a fund that does

3705
02:35:06,840 --> 02:35:09,478
this in the Indian will offer you

3706
02:35:08,280 --> 02:35:11,460
another fund that does that and of

3707
02:35:09,478 --> 02:35:13,920
course those management fees are higher

3708
02:35:11,459 --> 02:35:16,799
so they're really counter selling the

3709
02:35:13,920 --> 02:35:19,739
idea that John Bogle came along with but

3710
02:35:16,799 --> 02:35:22,019
in the process they have achieved a lot

3711
02:35:19,739 --> 02:35:24,959
of bolts add

3712
02:35:22,020 --> 02:35:27,239
that was fun for a while but the last

3713
02:35:24,959 --> 02:35:29,759
thing in the world I wanted to do is at

3714
02:35:27,239 --> 02:35:31,199
Washington or the American public decide

3715
02:35:29,760 --> 02:35:33,898
that they're throwing around their

3716
02:35:31,200 --> 02:35:35,700
weight too much so they're tending to

3717
02:35:33,898 --> 02:35:37,978
back off now if you figure out where

3718
02:35:35,700 --> 02:35:41,300
their self-interest is you can judge

3719
02:35:37,978 --> 02:35:41,299
where their behavior is going to go

3720
02:35:41,879 --> 02:35:45,779
Charlie yeah

3721
02:35:43,318 --> 02:35:47,898
you're one of the defend them no you can

3722
02:35:45,780 --> 02:35:51,780
square me what you just said

3723
02:35:47,898 --> 02:35:53,579
you're totally right on everything

3724
02:35:51,780 --> 02:35:57,439
well in that case I won't ask anybody

3725
02:35:53,579 --> 02:35:57,439
else okay Becky

3726
02:35:58,020 --> 02:36:02,460
all right this question comes from almu

3727
02:36:00,420 --> 02:36:05,398
Grinnell

3728
02:36:02,459 --> 02:36:08,099
and it's about

3729
02:36:05,398 --> 02:36:10,260
this is for Warren and Greg since 2019

3730
02:36:08,100 --> 02:36:12,540
Berkshire repurchased huge amounts of

3731
02:36:10,260 --> 02:36:13,800
stock about approximately reducing 10

3732
02:36:12,540 --> 02:36:15,660
percent of the share count and

3733
02:36:13,799 --> 02:36:18,358
increasing the intrinsic value per share

3734
02:36:15,659 --> 02:36:20,579
for the continuing shareholders Greg is

3735
02:36:18,359 --> 02:36:23,100
expected to be the successor of Warren

3736
02:36:20,579 --> 02:36:24,780
as CEO so will he be in charge of the

3737
02:36:23,100 --> 02:36:27,600
main capital allocation decisions

3738
02:36:24,780 --> 02:36:29,100
including future share BuyBacks Greg has

3739
02:36:27,600 --> 02:36:30,600
been key in the development of Berkshire

3740
02:36:29,100 --> 02:36:33,359
Hathaway energy and I think a good

3741
02:36:30,600 --> 02:36:35,280
Capital allocator does he has he been

3742
02:36:33,359 --> 02:36:37,280
involved in the share repurchases that

3743
02:36:35,280 --> 02:36:40,140
have been executed over the past years

3744
02:36:37,280 --> 02:36:41,460
and do you both Warren and Greg work

3745
02:36:40,139 --> 02:36:43,260
together in the estimation of

3746
02:36:41,459 --> 02:36:45,000
berkshire's intrinsic value and the

3747
02:36:43,260 --> 02:36:48,420
share buyback decisions

3748
02:36:45,000 --> 02:36:49,920
well then the answer is that Greg I'm

3749
02:36:48,420 --> 02:36:51,659
going to turn it over to him but the

3750
02:36:49,920 --> 02:36:54,719
answer is Greg understands Capital

3751
02:36:51,659 --> 02:36:56,879
allocation as well as I do and that's

3752
02:36:54,719 --> 02:36:59,159
lucky for us and

3753
02:36:56,879 --> 02:37:01,679
he will make those decisions I think

3754
02:36:59,159 --> 02:37:03,898
very much in the same framework as I

3755
02:37:01,680 --> 02:37:06,120
would make them and we've laid out that

3756
02:37:03,898 --> 02:37:08,099
framework now for 30 years probably or

3757
02:37:06,120 --> 02:37:10,560
something like that people make it way

3758
02:37:08,100 --> 02:37:11,818
more complicated I mean particularly if

3759
02:37:10,559 --> 02:37:13,139
you're working on a doctorate or

3760
02:37:11,818 --> 02:37:15,600
something it's just a great subject to

3761
02:37:13,139 --> 02:37:18,959
have lots of footnotes and you know 50

3762
02:37:15,600 --> 02:37:20,880
pages or 100 pages but it is it's no

3763
02:37:18,959 --> 02:37:22,919
more some it's no more complicated than

3764
02:37:20,879 --> 02:37:25,139
if you and I and Charlie had a business

3765
02:37:22,920 --> 02:37:27,780
and you want to sell

3766
02:37:25,139 --> 02:37:29,579
yours your interest in we could buy it

3767
02:37:27,780 --> 02:37:32,640
for less than we thought it was worth

3768
02:37:29,579 --> 02:37:35,159
and and without misleading you in any

3769
02:37:32,639 --> 02:37:37,739
way about what was going on and we'd buy

3770
02:37:35,159 --> 02:37:38,939
it then but Greg you're on because

3771
02:37:37,739 --> 02:37:41,159
you're going to be doing in the future

3772
02:37:38,939 --> 02:37:43,020
right uh

3773
02:37:41,159 --> 02:37:44,700
yeah well I think Warren you said it

3774
02:37:43,020 --> 02:37:47,760
really well I mean the framework's been

3775
02:37:44,700 --> 02:37:50,040
laid out we know how you approach it and

3776
02:37:47,760 --> 02:37:51,960
with the and and how you and Charlie

3777
02:37:50,040 --> 02:37:54,060
have approached it and and really don't

3778
02:37:51,959 --> 02:37:56,398
see that framework changing when the

3779
02:37:54,059 --> 02:37:58,859
opportunity presents itself we'll want

3780
02:37:56,398 --> 02:38:01,079
to be a an active repurchaser of

3781
02:37:58,859 --> 02:38:03,000
Berkshire shares we think it's a it's a

3782
02:38:01,079 --> 02:38:05,398
great outcome for Berkshire shareholders

3783
02:38:03,000 --> 02:38:08,459
to own a a larger piece of each of our

3784
02:38:05,398 --> 02:38:10,500
operating businesses and our and the uh

3785
02:38:08,459 --> 02:38:12,539
portfolio of the equity companies when

3786
02:38:10,500 --> 02:38:14,760
the when the opportunity presents itself

3787
02:38:12,540 --> 02:38:16,319
it can be the dumbest thing you can do

3788
02:38:14,760 --> 02:38:19,398
it or can be the smartest thing you can

3789
02:38:16,318 --> 02:38:19,398
do and

3790
02:38:19,439 --> 02:38:24,600
to make it more complicated than that

3791
02:38:21,600 --> 02:38:26,460
and start getting into all this but you

3792
02:38:24,600 --> 02:38:29,040
obviously do what the business needs to

3793
02:38:26,459 --> 02:38:31,318
do first then the opportunities are

3794
02:38:29,040 --> 02:38:32,760
there grow your present business buy

3795
02:38:31,318 --> 02:38:36,119
additional business whatever it may be

3796
02:38:32,760 --> 02:38:37,680
and then then you make a decision on

3797
02:38:36,120 --> 02:38:39,600
dividends but that decision becomes

3798
02:38:37,680 --> 02:38:41,460
pretty irrevocable because you don't cut

3799
02:38:39,600 --> 02:38:44,340
dividends and without

3800
02:38:41,459 --> 02:38:46,919
having them major effects

3801
02:38:44,340 --> 02:38:51,000
and your shareholder base and a lot of

3802
02:38:46,920 --> 02:38:52,680
things and uh and then if you've got

3803
02:38:51,000 --> 02:38:54,478
ample capital and you don't see that

3804
02:38:52,680 --> 02:38:55,260
you're going to use it all and your

3805
02:38:54,478 --> 02:38:58,079
stock

3806
02:38:55,260 --> 02:39:00,000
is attractive and it enhances the

3807
02:38:58,079 --> 02:39:02,159
intrinsic value for the remaining

3808
02:39:00,000 --> 02:39:04,079
shareholders it's an old-brainer and if

3809
02:39:02,159 --> 02:39:05,818
it's if it's above the price of

3810
02:39:04,079 --> 02:39:07,260
intrinsic value it's a no-brainer that

3811
02:39:05,818 --> 02:39:09,299
you don't even listen to anybody no

3812
02:39:07,260 --> 02:39:10,620
matter what investment banker comes in

3813
02:39:09,299 --> 02:39:12,299
and tells you here's how to do a

3814
02:39:10,620 --> 02:39:14,220
repurchase program

3815
02:39:12,299 --> 02:39:17,119
okay

3816
02:39:14,219 --> 02:39:17,119
station one

3817
02:39:19,859 --> 02:39:24,720
I'm Tom Nelson a podcast here from North

3818
02:39:22,978 --> 02:39:29,340
Oaks Minnesota

3819
02:39:24,719 --> 02:39:33,659
Charlie in 2022 you used phrases like

3820
02:39:29,340 --> 02:39:37,139
really massively stupid massive kind of

3821
02:39:33,659 --> 02:39:41,100
ignorance and crazy to describe what you

3822
02:39:37,139 --> 02:39:45,299
said was the 30 of Americans hesitant to

3823
02:39:41,100 --> 02:39:48,300
submit themselves to untested mRNA covid

3824
02:39:45,299 --> 02:39:49,739
gene therapy do you stand behind those

3825
02:39:48,299 --> 02:39:52,759
quotes today

3826
02:39:49,739 --> 02:39:52,760
yeah sure

3827
02:40:00,239 --> 02:40:04,520
well we got time for one more than

3828
02:40:01,859 --> 02:40:04,520
before lunch

3829
02:40:05,219 --> 02:40:09,559
Becky

3830
02:40:06,719 --> 02:40:14,599
okay that

3831
02:40:09,559 --> 02:40:14,600
I thought I was out but let's see uh

3832
02:40:15,000 --> 02:40:20,840
how about

3833
02:40:16,559 --> 02:40:20,840
oh uh

3834
02:40:21,079 --> 02:40:25,260
could be how about lunch pretty soon but

3835
02:40:23,520 --> 02:40:28,260
no no okay let's just got one for you

3836
02:40:25,260 --> 02:40:29,340
this one comes from Drew Estes

3837
02:40:28,260 --> 02:40:31,139
um

3838
02:40:29,340 --> 02:40:33,840
this is a question for Warren in your

3839
02:40:31,139 --> 02:40:35,760
1969 letter to Partners you said in any

3840
02:40:33,840 --> 02:40:37,620
company where the founder and chief

3841
02:40:35,760 --> 02:40:39,359
driving force behind the Enterprise is

3842
02:40:37,620 --> 02:40:42,240
still active it's still very difficult

3843
02:40:39,359 --> 02:40:43,859
to evaluate second men the only real way

3844
02:40:42,239 --> 02:40:46,020
to see how someone is going to do when

3845
02:40:43,859 --> 02:40:48,540
when running a company is to let them

3846
02:40:46,020 --> 02:40:50,399
run it this wise statement now applies

3847
02:40:48,540 --> 02:40:52,200
to Berkshire once the second men are

3848
02:40:50,398 --> 02:40:54,000
running Berkshire what would you advise

3849
02:40:52,200 --> 02:40:56,280
owners of Berkshire to watch for

3850
02:40:54,000 --> 02:40:58,200
specifically what actions if taken

3851
02:40:56,280 --> 02:41:00,479
should give us concern well I think I

3852
02:40:58,200 --> 02:41:03,359
would just I would have some comfort in

3853
02:41:00,478 --> 02:41:05,579
the fact that 99 of my net worth is in

3854
02:41:03,359 --> 02:41:08,399
that company so I I probably got a

3855
02:41:05,579 --> 02:41:10,978
stronger interest in it and and perhaps

3856
02:41:08,398 --> 02:41:15,358
100 billion or more of philanthropy will

3857
02:41:10,978 --> 02:41:18,840
be affected by and and uh but

3858
02:41:15,359 --> 02:41:22,559
I would say that I don't have a

3859
02:41:18,840 --> 02:41:23,398
second choice I mean it is it is that

3860
02:41:22,559 --> 02:41:25,799
tough

3861
02:41:23,398 --> 02:41:29,099
Divine but I've also seen

3862
02:41:25,799 --> 02:41:33,978
Greg in action that I feel 100 percent

3863
02:41:29,100 --> 02:41:33,979
comfortable and uh uh

3864
02:41:34,318 --> 02:41:38,818
and like I say I don't know something

3865
02:41:36,959 --> 02:41:40,379
happened to Greg I would tell the

3866
02:41:38,818 --> 02:41:42,659
directors you know they have a problem

3867
02:41:40,379 --> 02:41:44,818
and they won't

3868
02:41:42,659 --> 02:41:46,579
I don't have anybody to name and if they

3869
02:41:44,818 --> 02:41:49,199
put somebody in

3870
02:41:46,579 --> 02:41:51,780
Bergeron automatic pilot

3871
02:41:49,200 --> 02:41:53,640
couldn't work extremely well

3872
02:41:51,780 --> 02:41:55,200
for a long time I mean it doesn't it

3873
02:41:53,639 --> 02:41:58,799
doesn't like the businesses go away or

3874
02:41:55,200 --> 02:42:00,899
any other thing sort uh

3875
02:41:58,799 --> 02:42:03,420
and you can't

3876
02:42:00,898 --> 02:42:05,699
it's hard to judge

3877
02:42:03,420 --> 02:42:08,340
successor management

3878
02:42:05,700 --> 02:42:09,659
in a really good business because if

3879
02:42:08,340 --> 02:42:12,180
they if they don't show up at the office

3880
02:42:09,659 --> 02:42:13,379
it'll keep working for a long time and

3881
02:42:12,180 --> 02:42:15,600
maybe

3882
02:42:13,379 --> 02:42:18,619
maybe that

3883
02:42:15,600 --> 02:42:22,079
like event useful input

3884
02:42:18,620 --> 02:42:24,060
may show itself in five years it may go

3885
02:42:22,079 --> 02:42:27,859
a long long long

3886
02:42:24,059 --> 02:42:27,859
time and uh

3887
02:42:29,159 --> 02:42:34,318
how how are the shareholders

3888
02:42:31,559 --> 02:42:36,779
you know advised by a bunch of

3889
02:42:34,318 --> 02:42:38,818
people that are concerned about whether

3890
02:42:36,780 --> 02:42:40,200
you're meeting earnings projections or

3891
02:42:38,818 --> 02:42:43,079
something telling them whether the

3892
02:42:40,200 --> 02:42:45,479
Management's any good thing you know it

3893
02:42:43,079 --> 02:42:46,799
is very very hard it's very hard I've

3894
02:42:45,478 --> 02:42:49,079
been on the board of

3895
02:42:46,799 --> 02:42:51,000
20 companies is very hard to

3896
02:42:49,079 --> 02:42:55,260
ask me to rank the management of each

3897
02:42:51,000 --> 02:42:57,180
one it's uh it's it's very difficult to

3898
02:42:55,260 --> 02:42:58,739
do because some are just better

3899
02:42:57,180 --> 02:43:00,540
businesses than others some would be

3900
02:42:58,739 --> 02:43:03,119
better off not managed hardly at all

3901
02:43:00,540 --> 02:43:04,439
others really need help but they got a

3902
02:43:03,120 --> 02:43:06,060
lousy business

3903
02:43:04,439 --> 02:43:09,359
and uh

3904
02:43:06,059 --> 02:43:11,219
Tom Murphy told me a long long time ago

3905
02:43:09,359 --> 02:43:13,859
is it the secret of business is to buy a

3906
02:43:11,219 --> 02:43:17,579
good business and it's okay to inherit

3907
02:43:13,859 --> 02:43:19,260
one too and Greg is inheriting a good

3908
02:43:17,579 --> 02:43:22,379
business and I think he'll make it

3909
02:43:19,260 --> 02:43:24,600
better but I don't think it's easy

3910
02:43:22,379 --> 02:43:26,579
to put any one of the next 10 nominees

3911
02:43:24,600 --> 02:43:28,020
in and try and judge three years later

3912
02:43:26,579 --> 02:43:31,139
whether they've done a good job or not

3913
02:43:28,020 --> 02:43:33,120
so it's going to be the that'll be a

3914
02:43:31,139 --> 02:43:34,739
very interesting job for the board

3915
02:43:33,120 --> 02:43:38,579
but it shouldn't listen to Wall Street

3916
02:43:34,739 --> 02:43:41,039
on it it they've got the job if they put

3917
02:43:38,579 --> 02:43:43,079
somebody in there's a surprise we both

3918
02:43:41,040 --> 02:43:45,240
go down on a plane that put somebody in

3919
02:43:43,079 --> 02:43:48,359
they've got a real job in assessing that

3920
02:43:45,239 --> 02:43:50,639
person because it'll depend on how good

3921
02:43:48,359 --> 02:43:53,760
he or she is as a talker it'll depend on

3922
02:43:50,639 --> 02:43:55,619
you know them courting Wall Street to be

3923
02:43:53,760 --> 02:43:59,700
supportive of all kinds of things and

3924
02:43:55,620 --> 02:44:01,380
and uh uh we've got some very good

3925
02:43:59,700 --> 02:44:05,159
people on the board but they would be

3926
02:44:01,379 --> 02:44:07,019
challenged in that position as would I

3927
02:44:05,159 --> 02:44:09,119
where I've been in that position and

3928
02:44:07,020 --> 02:44:11,040
other companies were

3929
02:44:09,120 --> 02:44:13,200
a very great leader

3930
02:44:11,040 --> 02:44:15,359
has left and uh

3931
02:44:13,200 --> 02:44:17,760
on the way back from the funeral you

3932
02:44:15,359 --> 02:44:19,739
know nobody knows what to do exactly

3933
02:44:17,760 --> 02:44:20,700
so with that cheery message we will go

3934
02:44:19,739 --> 02:44:24,680
to lunch

3935
02:44:20,700 --> 02:44:24,680
and we will come back

3936
02:44:24,940 --> 02:44:28,280
[Applause]

3937
02:44:29,818 --> 02:44:34,799
we'll see you at one o'clock thank you

3938
02:44:31,920 --> 02:44:37,739
and and we're still going to try and get

3939
02:44:34,799 --> 02:44:40,199
60 Questions in we've done 25 so far

3940
02:44:37,739 --> 02:44:41,879
20 yeah 25.

3941
02:44:40,200 --> 02:44:43,240
so keep the question short and I'll try

3942
02:44:41,879 --> 02:44:46,369
and keep the answer short thanks

3943
02:44:43,239 --> 02:44:46,369
[Music]