[00:00] excuse me
[00:02] good morning good morning and thanks for
[00:06] coming
[00:07] I love it Charlie loves it we're glad to
[00:10] have you here
[00:11] we're going to make this
[00:13] this uh
[00:15] preliminary before the question is very
[00:17] short
[00:18] because we want to get in at least
[00:21] 60 Questions half divided by the
[00:25] the audience outside this
[00:27] Arena and a half from you so I would
[00:32] just like to get
[00:34] right to the
[00:36] to the directors and the earnings that
[00:41] have been put up
[00:43] on the uh
[00:45] on our web page this morning but we'll
[00:47] cover those very fast and we'll get to
[00:49] the questions now
[00:51] I
[00:53] when I woke up this morning
[00:55] I realized
[00:57] that we had a competitive
[01:01] broadcast going out
[01:05] somewhere in the UK and and
[01:10] they were they were celebrating
[01:14] a King Charles and we've got our own
[01:18] King Charles here today
[01:19] [Applause]
[01:32] and next to him we have
[01:36] Greg Abel the who's in charge of all the
[01:39] operations except for
[01:42] insurance
[01:43] next
[01:45] [Applause]
[01:51] and actually great we have
[01:53] uh
[01:55] a man I ran into a 1986 and
[01:59] has made us look good ever since we have
[02:01] the man in charge of insurance Ajit Jane
[02:04] Jaden
[02:05] [Applause]
[02:12] and now we have our our directors here
[02:15] in front and if they would
[02:17] just stand briefly and then I'll go on
[02:20] to the next one and and uh
[02:22] they're all here today first of all
[02:25] doing alphabetically there's Howard
[02:27] Buffett
[02:34] there's Suzy Buffett
[02:41] there's Steve Burke
[02:43] [Applause]
[02:47] Ken Chanel
[02:49] [Applause]
[02:53] Chris Davis
[02:54] [Applause]
[02:58] Sue Decker
[02:59] [Applause]
[03:03] Charlotte Guymon
[03:04] [Applause]
[03:07] Tom Murphy Jr
[03:09] [Applause]
[03:12] Ron Olson
[03:13] [Music]
[03:16] Wally Weiss
[03:18] [Applause]
[03:20] and Merrill Whitmer
[03:22] [Applause]
[03:24] [Music]
[03:26] that's as good as you can get and
[03:28] there's one other person I would like to
[03:31] mention before we get on to the earnings
[03:33] that were put on the uh
[03:35] uh in the press release this morning and
[03:39] uh
[03:41] that's uh
[03:45] well let's see who we have there we've
[03:48] got
[03:49] this is hard to believe
[03:52] can you imagine a name
[03:55] Melissa Shapiro Shapiro
[03:58] and she was uh Melissa Shapiro until she
[04:01] married another Shapiro and she put this
[04:04] whole thing together with no help from
[04:06] me no help from Charlie and a lot of
[04:09] help from the people of the other room
[04:11] Melissa
[04:12] [Applause]
[04:17] yeah it's very easy if you can remember
[04:20] her second name you can remember her
[04:21] third name so Melissa shabiro Shapiro
[04:23] and with that I would like to
[04:26] next move on to the
[04:29] earnings in a couple
[04:32] small slides that that explain what
[04:35] we're all about and then we're going to
[04:36] get to the Q a and uh
[04:39] the slide is up behind me yeah there it
[04:42] is we reported in the first
[04:45] quarter
[04:47] operating earnings a little over 8
[04:50] billion and when we talk about operating
[04:53] earnings we're basically referring
[04:56] to the earnings
[05:00] a Berkshire Hathaway as generally well
[05:04] as required under gaap excluding however
[05:08] capital gains both realized and
[05:11] unrealized there's a few other very
[05:13] minor items but basically
[05:15] we expect to make capital gains over
[05:17] time why would we own the stocks
[05:20] otherwise uh doesn't always work out but
[05:23] overall it works out pretty well over
[05:24] time but in any day any quarter any year
[05:29] even occasionally over a five-year
[05:31] period uh
[05:33] the stock prices move around
[05:35] capriciously now we own a lot of other
[05:37] businesses we consider those stocks
[05:39] businesses we own a lot of other
[05:41] businesses where they get them
[05:42] Consolidated and they don't move around
[05:44] in value now if we had a little bit of
[05:47] Burlington
[05:48] stock outstanding if we had a little bit
[05:50] of the energy stock trading those stocks
[05:54] would move around a lot but the
[05:56] businesses are what count so the
[05:59] operating earnings as you'll see in the
[06:02] first quarter came in at about 8 billion
[06:05] and
[06:07] uh I would say that
[06:09] in the general economy
[06:12] the feedback we get is that uh
[06:16] I would say perhaps the majority of our
[06:18] businesses will actually report
[06:22] lower earnings this year than last year
[06:25] the
[06:26] in various degrees in the last six
[06:29] months or so at various times uh
[06:33] the the businesses have left
[06:36] the incredible
[06:39] period which is about as extraordinary
[06:41] as I've seen in business since World War
[06:43] II uh where the government would pour
[06:47] out a lot of money to people
[06:49] who couldn't get Goods it was more
[06:50] extreme in World War II but this was
[06:52] extreme this time
[06:54] and it was just a question
[06:57] of getting Goods to deliver
[07:00] and people bought and they didn't wait
[07:02] for sales and if you couldn't sell them
[07:05] one thing they would put another thing
[07:06] in their backlog it was an extraordinary
[07:08] period and that period uh
[07:12] has ended it hasn't ended with as you
[07:15] know it isn't that employment's fall
[07:17] born off a cliff or anything in the
[07:19] least but but
[07:21] it is a different climate
[07:24] than it was six months ago and and a
[07:27] number of our managers
[07:29] uh were surprised some of them had too
[07:32] much inventory on order and then all of
[07:34] a sudden it got delivered and people
[07:36] weren't in the same frame of mind as
[07:38] earlier
[07:39] and now we'll start having sales at
[07:41] places where we didn't need to have
[07:42] sales before
[07:44] but
[07:45] uh despite the fact
[07:48] that this year I think in general will
[07:51] be slower
[07:52] than last year
[07:54] we actually are
[07:56] situated so that I would expect and
[07:59] believe me when I say accept expect
[08:03] it's
[08:04] nothing is sure nothing sure tomorrow
[08:07] nothing sure next year and nothing is
[08:10] ever sure
[08:11] either in markets or in business
[08:13] forecasts or anything else and we don't
[08:15] pay much attention to markets or
[08:17] forecasts unless the Marcus Epping off
[08:19] or something interesting to do but
[08:23] nevertheless we are positioned in two
[08:25] respects as you'll see from
[08:27] from this uh first report our investment
[08:32] income is going to be a lot larger
[08:35] uh this year than last year and that's
[08:37] that's built in I mean we have as you'll
[08:41] see in a minute we've had 125
[08:45] billion or so in
[08:48] very short term
[08:49] investments and
[08:51] and believe it or not
[08:53] uh not that long ago
[08:57] we were getting
[08:58] four basis points which is next to
[09:01] nothing
[09:02] on that 125 billion which means we were
[09:05] getting 50 million a year and now the
[09:08] same money the other just day or day
[09:11] before yesterday we actually bought
[09:14] because of someone funny twist in the
[09:16] market because of doubts about the
[09:18] deficit ceiling or the debt ceiling uh
[09:22] we bought three billion of bills at the
[09:25] 590
[09:26] [Music]
[09:28] that's 5.9 is it 5.92 Bond equivalent
[09:33] yield so
[09:36] we will have what produced us not that
[09:39] long ago on a 12-month basis was
[09:41] producing 50 million here producing
[09:44] something in the area of 5 billion here
[09:46] so we're in a position where the
[09:49] investment income is essentially well it
[09:52] is certain to increase quite a bit
[09:54] and insurance underwriting
[09:58] is not
[09:59] it uh
[10:01] it does not correlate
[10:03] with business activity it depends on
[10:07] things like hurricanes and earthquakes
[10:09] and and other events
[10:12] so
[10:13] on a prospective basis on a probability
[10:16] basis we're likely to have a
[10:20] a better year
[10:22] uh this year in Insurance underwriting
[10:25] than we had last year uh it just isn't
[10:28] affected
[10:29] by what you might call the business
[10:31] cycle or uh what applies to generally an
[10:36] industry detailing you name it uh so I
[10:40] would expect
[10:42] and one
[10:43] massive EarthQuaker
[10:45] one one hurricane that came into just
[10:48] the wrong place
[10:50] I would
[10:52] can affect that prediction but on a
[10:55] probable listing basis our insurance
[10:57] looks better this year so if you get two
[10:59] of those
[11:00] two of the elements there of our main
[11:03] elements of earnings that look like they
[11:06] will swing in our Direction I would
[11:07] expect but I can't promise that our
[11:10] operating earnings will be uh greater
[11:13] than last year
[11:15] and if we'll move to
[11:17] the second slide
[11:20] uh I give you those operating earnings
[11:22] figures
[11:24] just to give you
[11:25] a overview of what has happened
[11:29] uh
[11:30] since the pandemic started and off of
[11:33] the year
[11:34] the yearbook before as a base
[11:37] and
[11:39] we retain all our earnings as you know
[11:42] so if we're retaining 30 or 35 billion
[11:45] or whatever but maybe a year you should
[11:47] expect more operating earnings over time
[11:50] I mean this I mean this this number
[11:51] should be
[11:53] significantly higher five or 10 or 15
[11:56] years from now because we have the
[11:58] advantage of retaining earnings and
[12:01] that's what got us to these figures
[12:02] because they were essentially nothing
[12:04] when we started and they got there by
[12:06] retaining earnings and we'll keep
[12:08] retaining earnings so it's no great
[12:10] Triumph if these numbers move up and
[12:13] what we hope is that they
[12:16] move up at a reasonable rate
[12:17] historically
[12:19] they moved up at an unreasonable rate
[12:21] sometimes but we were working with a
[12:23] much smaller Sons then and that can't be
[12:25] repeated with our present Capital base
[12:27] because I note there
[12:30] I believe it's on this slide let's take
[12:32] a look
[12:33] uh
[12:35] now that'll be
[12:38] see it's on the
[12:41] well on the on the next on the next
[12:44] place paid and much smoother the next
[12:46] slide
[12:48] we showed that we had on March 31st
[12:52] now 500 and
[12:54] was it
[12:55] 504 billion
[12:59] of Gap net worth
[13:01] now what might surprise you
[13:04] is that there's no other company in the
[13:06] United States no other company
[13:08] that has a number
[13:10] that is that large now that isn't
[13:13] because we've got the most valuable
[13:16] company in the United States
[13:18] other companies
[13:20] have used their money to repurchase
[13:22] shares that they could have accumulated
[13:24] 504 billion in gap
[13:26] but basically we have more
[13:30] under Gap accounting now
[13:32] than any other company in the US and of
[13:36] course if you measure return on
[13:38] on Equity that becomes a very big number
[13:40] to increase
[13:42] at a rapid rate but we hope to do so
[13:45] uh not a rapid rate additional rate
[13:49] um and right below that you see
[13:52] something called float
[13:54] and float
[13:56] is money
[13:58] that
[13:59] uh is left in our hands
[14:03] uh somewhat Akin
[14:06] but very importantly different
[14:09] a little bank deposit but it
[14:12] you have to pay interest to get a bank
[14:14] deposit you have to pay more interests
[14:16] these days and you have to run a bank
[14:17] and do a lot of things and
[14:20] basically this is money that represents
[14:24] unpaid losses at this time you get paid
[14:28] in advance in insurance
[14:30] so what shows up as a net liability
[14:33] on our balance sheet
[14:35] is gives us funds uh
[14:39] do exercise with an amount of discretion
[14:42] that no other
[14:43] insurance company that I know of in the
[14:45] world enjoys just because we have so
[14:48] much net worth
[14:49] and our float now
[14:51] comes to 165 billion
[14:54] and the man sitting on the far left is
[14:56] responsible for moving that number up
[14:59] from a pittance
[15:00] in 1986
[15:03] to this incredible figure which in most
[15:07] years practically all years
[15:10] hasn't cost us anything so it's like
[15:12] having a bank with no employees no
[15:15] interest
[15:16] and no ability to withdraw
[15:20] the money in a hurry
[15:23] that we have working for us and it's a
[15:27] very valuable asset that uh
[15:31] that shows up as a liability and uh
[15:37] Ajit is responsible for building up this
[15:42] treasure
[15:44] uh which has done been done by
[15:47] out competing insurance companies all
[15:50] over the world and then now a number of
[15:52] our insurance companies in turn are run
[15:54] by talented managers
[15:57] who contributed
[15:58] one way or another
[16:00] uh start with Geico
[16:03] the beginning of my career and the uh
[16:06] that float
[16:09] if you think about it just think of a
[16:10] balance sheet you've got liabilities
[16:13] here and you got assets over here and
[16:14] and the liability side finances the
[16:17] asset side is very simple and
[16:21] stockholders Equity finances it
[16:22] long-term debt finances and so on but
[16:25] stockholders Equity is very expensive in
[16:28] a real sense
[16:29] long-term debt has been cheap for a
[16:32] while but it can get expensive and it
[16:34] can also become
[16:35] do eventually and if and it may not be
[16:38] available
[16:39] uh but float
[16:42] is another item that shows a it's a
[16:44] liability but hasn't cost us anything
[16:47] and it it can't disappear in a hurry and
[16:52] it finances the asset side in the same
[16:55] way as stockholders equity
[16:57] and nobody else thinks of it much that
[16:59] way but but we've always thought of it
[17:02] that way and it's built up over time so
[17:04] uh I show at the bottom what's happened
[17:06] with cash and treasury bills
[17:09] through March 31st and I will tell you
[17:12] that the
[17:13] in the month of April
[17:15] we probably
[17:17] added
[17:19] about seven billion dollars to that
[17:21] factor now part of that is because we
[17:23] didn't buy as much stock because that
[17:25] reduces reduces cash and treasury bills
[17:28] we bought about 400 million dollars
[17:30] worth of stock in the month of April
[17:32] that's that's a minus uh in terms of
[17:35] cash available and uh
[17:39] we we
[17:41] however sold net some stock which
[17:45] produced maybe 4 billion and of course
[17:47] we had operating earnings probably two
[17:48] and a half
[17:50] billion or something in that area and my
[17:52] guess is we probably increased our cash
[17:54] and treasury bills uh six and seven
[17:57] billion in the month and uh I just want
[18:01] to give you a feel for other cash flows
[18:03] at Berkshire
[18:04] and then if we move to the final I think
[18:07] it's the final one next to the last one
[18:08] uh
[18:14] no I I think it is the last let's see
[18:16] it's the fourth
[18:18] yeah is this we should have the one of
[18:21] their class a equivalent shares
[18:22] outstanding and and uh
[18:25] you'll notice that every year
[18:28] the number of our shares go down so if
[18:30] we own more businesses and the
[18:32] businesses make more money
[18:34] your chair as shareholders as owners
[18:37] a Berkshire increases every year without
[18:41] you laying out any money now you're
[18:43] laying out the
[18:45] the
[18:47] alternative which you could receive in
[18:49] dividends but the reason we've gotten to
[18:52] where we are is because we
[18:54] we kept the money we did pay a dividend
[18:57] in nineteen
[18:59] sixty seven ten cents to share
[19:01] it was a terrible mistake and I
[19:06] I always tell people that I I'd love for
[19:08] the men's room and the directors voted
[19:10] it while I was gone but that isn't true
[19:12] I was there I confessed they uh but we
[19:15] were invested and has produced the
[19:18] 500 billion possible shareholders equity
[19:20] in the 30 billion plus of operating
[19:23] earnings and and we'll continue to
[19:26] follow that policy because it makes a
[19:27] great deal of sense and uh
[19:30] with that
[19:32] I think we've taken care of the
[19:34] preliminaries you can study that the 10q
[19:37] is is on the uh
[19:40] on the
[19:41] web page and if you have a
[19:46] week or two vacation you could spend it
[19:49] reading the 10-q and but that is the
[19:51] essence of Berkshire and with that I
[19:52] will
[19:53] start with Becky quick and and uh we
[19:57] will alternate between Becky and and the
[20:01] audience and her questions have come in
[20:04] from all over the country and I believe
[20:06] you identified the center and go to it
[20:09] Becky thanks Warren the first question
[20:12] comes in from Randy Jeffs in Irvine
[20:14] California and his question is if
[20:16] Silicon Valley Bank's deposit had not
[20:19] been fully covered what do you think the
[20:20] economic consequences would have been to
[20:22] the nation
[20:24] well I've just simply say it would have
[20:28] been catastrophic and that's why they
[20:31] were covered uh and even though the FDIC
[20:34] limit is 250 000 that that's the way the
[20:39] statute reads but that is not the way
[20:41] the us is going to behave
[20:43] uh any more than they're going to let
[20:45] the debt ceiling uh uh cause the world
[20:49] to go into turmoil and they
[20:55] ah
[20:56] well they're just I I can't imagine
[20:59] anybody
[21:01] in the administration and the Congress
[21:03] and the Federal Reserve whatever it may
[21:06] have been FDIC I can't imagine anybody's
[21:09] saying uh I'd like to be the one on
[21:12] television tomorrow and explain the
[21:13] American public why we're keeping uh
[21:17] uh only two hundred and fifty thousand
[21:19] dollars insured and we're gonna start
[21:21] around every Bank in the country and
[21:23] disrupt the world financial system uh so
[21:27] uh I think it was inevitable Charlie do
[21:30] you have any
[21:33] no I have nothing to add okay well
[21:37] uh incidentally I should mention this
[21:40] now ajeed and Greg will be here in the
[21:44] morning session which ends at noon and
[21:46] so uh if you've got questions to direct
[21:49] to them the time to do it is in the
[21:51] first half of the show and and then
[21:53] after lunch
[21:55] it'll uh just Charlie and I will be back
[21:58] okay
[22:00] area one
[22:02] hi nirav Patel Haverhill Massachusetts
[22:06] Mr Buffett Mr Monger it seems like you
[22:10] found the Sweet Spot between being being
[22:13] too conservative and too aggressive as
[22:15] investors
[22:17] do you ever make bad investment
[22:19] decisions because of your emotions and
[22:21] what do you do to try to keep that from
[22:24] happening
[22:28] well we make
[22:30] bad investment decisions uh
[22:33] plenty of times I make more than Charlie
[22:35] because I'm I like to think it's because
[22:37] I make more decisions but the public
[22:39] normatic average is worse but
[22:44] I can't recall
[22:48] anytime
[22:49] in the history of Berkshire
[22:52] that we made an emotional decision that
[22:55] I know the movie had Jamie Lee in there
[22:57] but that that was for Laughs
[23:00] I mean Jamie
[23:03] Jamie Lee she's good but she's not good
[23:06] enough to get me or Charlie to make an
[23:09] emotional decision
[23:12] [Applause]
[23:16] Charlie
[23:18] I'm sure you have something to add on
[23:19] that
[23:24] well it's a different movie than it is
[23:27] shown in the most corporate meetings
[23:29] [Laughter]
[23:31] but have we ever made an emotional
[23:33] decision no no
[23:37] that's in business we're talking about
[23:38] yeah
[23:40] yeah no you don't want to be a no
[23:42] emotion person in all of your life but
[23:44] you you definitely want to be a no more
[23:46] no emotion person of making an
[23:49] investment or business decision that uh
[23:52] you can argue that that uh uh
[23:57] with it
[23:59] we probably I would say that we
[24:03] 've made an emotional decision perhaps
[24:07] and when a manager has been with us for
[24:10] some period
[24:11] and we haven't
[24:13] we've
[24:15] we we've ignored the fact
[24:18] that perhaps they weren't quite what
[24:20] they were
[24:21] earlier but our businesses are so good
[24:25] that they they've run better sometimes
[24:28] when uh you know I've talked about
[24:32] West Coast for example the wonderful
[24:34] Louisville
[24:36] it ran on
[24:37] it ran on automatic pilot
[24:40] for a while but I don't think we
[24:41] suffered by it but you're going to argue
[24:44] that if Charlie and I hadn't liked Louie
[24:47] as much as we did we might have spotted
[24:49] a little bit early but I don't think it
[24:50] made any difference in the results would
[24:52] you would you agree with that Charlie
[24:55] yeah yeah you'd be totally with it
[24:57] and
[25:01] I'm glad I'm glad we behaved the way we
[25:03] did at Wesco
[25:04] by the way we bought the thing for a few
[25:08] tens of millions and it became worth two
[25:10] or three billion
[25:13] yeah that wasn't common in the Savings
[25:15] and Loan businesses you may have noticed
[25:17] and they don't want they really want
[25:20] crazy in that industry and and we had a
[25:23] wonderful guy in Louis and we didn't go
[25:25] crazy yeah we didn't go crazy
[25:28] um
[25:30] okay Becky
[25:33] this question comes from Ben Knoll in
[25:35] Minneapolis he says he's a Berkshire
[25:37] shareholder of three decades and he's
[25:39] attended many Berkshire meetings he's
[25:41] here again this year
[25:42] and this is addressed to Ajit and Greg
[25:45] he says last year I asked you about how
[25:47] Geico and BNSF appeared to lose ground
[25:50] to their leading competitors Geico on
[25:52] telematics and BNSF on Precision
[25:54] scheduled railroading Ajit you responded
[25:57] by saying how you expected Geico to make
[25:59] progress in a year or two Greg you spoke
[26:01] about your pride in BNSF but you didn't
[26:03] directly address the threat of
[26:05] precision's scheduled railroading will
[26:07] each of you please provide perspective
[26:09] on these competitive challenges and our
[26:11] company's strategies to address them
[26:16] let me
[26:19] in terms of Geico and telematics let me
[26:23] make the observation that Geico has
[26:25] certainly taken the ball by the horns
[26:27] and has made rapid strides in terms of
[26:29] trying to bridge the gap
[26:31] in terms of telematics and its
[26:33] competitors
[26:35] they have now reached a point where on
[26:37] all new business
[26:39] close to 90 percent is has a telematics
[26:44] input to to the pricing decision
[26:47] unfortunately less than half of that is
[26:49] being taken up by the policyholders the
[26:53] other point I want to make is even
[26:54] though we have made improvements in in
[26:57] terms of Bridging the Gap on telematics
[26:59] we still haven't started to realize the
[27:02] true benefit and the real culprit or the
[27:05] bottleneck is technology
[27:08] Geico's technology needs a lot more work
[27:10] than I thought it did it has more than
[27:13] 500 actually more than 600 Legacy
[27:15] systems that don't really talk to each
[27:17] other and we are trying to compress them
[27:20] to no more than 15 16
[27:22] systems that all talk to each other
[27:24] that's a Monumental Challenge and
[27:26] because of that even though we have made
[27:28] improvements in telematics we still have
[27:30] a long way to go
[27:32] because of Technology
[27:34] uh
[27:35] because of that and because of the whole
[27:38] issue more broadly in terms of matching
[27:40] rate to risk Geico is still work in
[27:43] progress
[27:44] I don't know if you any of you had a
[27:45] chance to look at the first quarter
[27:46] results but Geico has had a very good
[27:49] first quarter coming in at a combined
[27:51] ratio of 93 and change which means a
[27:54] margin of six and change
[27:56] even though that's very good it's not
[27:58] something we can take to the bank
[28:00] because they're two unusual items that
[28:03] contributed to it firstly we've had what
[28:06] is called prior year Reserve releases
[28:08] we've reduced results for the previous
[28:10] years and that contributed to it and
[28:13] secondly every year the first quarter
[28:14] tends to be a seasonally good quota for
[28:17] auto insurance writers
[28:19] so if you just for those two factors my
[28:22] guess is the end of the year Geico will
[28:24] end up with a combined ratio just south
[28:27] of 100 as opposed to the Target they're
[28:30] shooting for 96.
[28:32] I hope they reach the target of 96 by
[28:35] the end of next year
[28:37] uh and but instead of getting too
[28:40] excited about it I think it's important
[28:41] to realize that even if we reach 96 it
[28:44] will come at the expense of
[28:46] having lost policy holders there is a
[28:49] trade-off between profitability and
[28:52] growth and clearly we have we're going
[28:54] to emphasize
[28:56] profitability and not growth and that
[28:58] will come at the expense of policyholder
[29:00] so it will not be until two years from
[29:02] now that we'll be back on track fighting
[29:04] the battles on both the profitability
[29:07] and the growth front
[29:09] okay yep
[29:11] moving to BNSF
[29:15] I'll start again by expressing great
[29:17] pride in the BNSF team we have an
[29:19] exceptional group of led by Katie and
[29:22] and her managers that uh show up every
[29:25] day to do great work on on the railroad
[29:27] at the same time they would be the first
[29:29] to acknowledge there's more to be done
[29:31] there uh the specific reference to
[29:34] Precision scheduled railroading uh the
[29:38] other large railroad Class A uh on the
[29:42] railroads in the in the U.S follow that
[29:44] and including the two in Canada we're
[29:47] well aware of what they're doing and and
[29:49] obviously pay close attention to their
[29:52] operating Matrix and our team strives
[29:54] every day to be more efficient obviously
[29:56] I would say we balance it with the needs
[29:59] of our customers
[30:00] if I look back to
[30:03] pre-2022 so we look at the three-year
[30:06] period of 2019 2020 2021 the BNSF team
[30:12] made significant progress on their
[30:14] efficiencies and and and delivering
[30:17] overall value back to the shareholders
[30:19] and and to their customers and at the
[30:22] same time maintaining a very safe
[30:23] railroad for our employees so we're
[30:25] making excellent progress that didn't
[30:28] stop last year they made great progress
[30:30] again the reality in 2022 as we did go
[30:34] through a period of time where we had to
[30:36] call it reset the railroad we came out
[30:39] of the pandemic there were the supply
[30:41] challenges we had certain other issue
[30:43] labor issues and other things going on
[30:45] at the port and the reality is our team
[30:48] prioritized getting the railroad back in
[30:51] place for the long term not a short-term
[30:53] focus on hitting certain operating
[30:55] metrics in in
[30:57] 2022 we're well aware of where we were
[31:00] relative to those metrics but the real
[31:01] Focus was to get the railroad reset in a
[31:05] in a safe manner such that we could
[31:06] deliver long-term value and long-term
[31:09] service to our customers and and that's
[31:12] really what we'll continue to see with
[31:13] that team they'll be continual progress
[31:15] there'll be years where it's not as
[31:18] quickly or even we go backwards but over
[31:21] the long term we'll be very we'll see
[31:24] exceptional results from from that team
[31:26] and and couldn't be more proud that we
[31:28] have that asset thank you
[31:30] I wouldn't I would just
[31:34] well he deserves but both of them
[31:36] deserve Applause uh the I would like to
[31:38] add one thing
[31:48] the
[31:50] and Geico
[31:52] dot Combs
[31:55] was Jake's Choice my choice
[31:58] go back to guy at Geico
[32:01] to work on the problem of matching
[32:04] rate to risk which is what
[32:07] insurance is all about
[32:09] and uh
[32:12] he arrived
[32:13] with exquisite timing right before the
[32:16] pandemic broke out and all kinds of
[32:18] things changed but Todd is doing
[32:21] a wonderful job at Geico and and he
[32:25] works closely
[32:26] uh with the Jeep because he saw his home
[32:31] and all Mulligan comes back here and we
[32:33] we get together on the weekend
[32:35] sometimes too so uh
[32:38] that's been a
[32:40] a remarkable com accomplishment under
[32:42] difficult circumstances and he's not all
[32:45] the way home but he said he just made a
[32:47] very very big change
[32:50] uh in multiple ways at Geico and then
[32:54] one other thing I would like to mention
[32:56] there have been a lot of public
[32:57] companies created in the last decade
[33:02] thereabouts in insurance
[33:05] and uh there's none of them
[33:09] that we would
[33:10] like to own and and they always started
[33:14] out
[33:14] in their perspective saying this is a
[33:16] tech company not an insurance company of
[33:18] course we're of course they're in a tech
[33:20] company with it everybody's
[33:22] whether they're in insurance or a lot of
[33:25] other places are using the facility but
[33:28] you still have to properly match rate to
[33:30] risk and uh uh that they invariably have
[33:36] reported a huge losses they've eaten up
[33:38] capital
[33:39] but there's been one company that nobody
[33:42] has generally heard of there's only been
[33:43] one that I know of
[33:45] company started in the last 10 years
[33:48] that has been a overwhelming success and
[33:53] that's a company that Ajit
[33:55] and four people who join with them set
[33:58] to develop a new business
[34:00] it's called Berkshire Hathaway specialty
[34:03] it now has
[34:05] yeah
[34:06] what's the float a Jeep coming up to 12
[34:10] billion yeah yeah we've we've built more
[34:13] slope than probably all these companies
[34:15] combined
[34:17] we've now
[34:19] it it's cost us essentially nothing in
[34:22] terms of an underwriting loss
[34:24] the four people have turned in I don't
[34:26] know 1500 around the world we we took on
[34:29] the whole industry and we brought
[34:32] some unique
[34:35] talent and the four people that came and
[34:38] now have like you said 1500 or so
[34:40] worldwide and we brought capital and we
[34:43] brought
[34:45] okay
[34:46] capabilities that really only Berkshire
[34:50] could Supply so it was the it was the
[34:53] combination
[34:55] of of
[34:56] brains and talent and energy and money
[35:00] and no one has really successfully
[35:03] entered this
[35:04] this space
[35:06] plenty of people in the space who didn't
[35:08] like us coming
[35:10] and we did it without it
[35:13] costing us a dime of Entry
[35:15] and it's been unmatched by any of the
[35:19] public companies that went public
[35:21] and people who've seen us do it but they
[35:25] can't duplicate it and that's
[35:27] what Vegeta's created and Peter Eastwood
[35:31] has led this group Berkshire Hathaway
[35:33] specially and uh it's just remarkable so
[35:37] anyway with that let's go on yeah we'll
[35:40] give him a hand for that
[35:42] [Applause]
[35:42] [Music]
[35:46] okay let's go to section two
[35:55] hi Charlie
[35:57] I'm
[35:58] Lorenz I'm Karen here
[36:05] your priorities are right
[36:08] yes I have questions on AI and Robotics
[36:12] here's my questions as Ai and Robotics
[36:16] continue to advance what do you believe
[36:19] will be the positive and an active
[36:21] impact of this technology
[36:24] on both the stocks markets and society
[36:27] as a whole and are there any specific
[36:30] Industrials and companies that you
[36:32] believe will be most impacted
[36:39] Karen I thank you for asking Charlie
[36:41] that question
[36:51] well
[36:54] if you went into byd's factories in
[36:58] China you would see robotics going in
[37:01] the unbelievable rate
[37:04] so we're gonna see a lot more robotics
[37:07] in the world
[37:08] I am personally
[37:10] skeptical of some of the hype that has
[37:13] gone into artificial intelligence
[37:15] I think old-fashioned intelligence works
[37:18] pretty well
[37:21] [Applause]
[37:27] there won't be a
[37:28] there won't be anything in AI
[37:31] that replaces the gene
[37:33] the
[37:34] state that unqualifiedly they can do
[37:37] amazing things uh
[37:41] you know Bill Gates brought me out of
[37:43] them out
[37:45] the latest maybe not the latest version
[37:48] but one he thought maybe I could handle
[37:50] which
[37:52] has to be careful with me in terms of
[37:54] leading me too fast uh and it did it did
[37:58] these remarkable things uh it didn't but
[38:01] it it it couldn't tell jokes Bill told
[38:04] me that ahead of time and it prepared me
[38:06] and it it just isn't there but you know
[38:10] things like
[38:11] checking all the legal opinions on you
[38:14] know
[38:14] since the beginning of time and
[38:16] everything and eliminating all the
[38:19] sided I mean it can do all kinds of
[38:21] things and
[38:24] when something can do all kinds of
[38:25] things
[38:26] I get a little bit worried and because I
[38:30] know we won't be able to uninvent it and
[38:33] uh
[38:34] you know we did invent
[38:37] uh for very very good reason
[38:40] the atom bomb and in World War II and it
[38:45] was you know it was enormously important
[38:48] that we did so
[38:50] but
[38:52] is it good for the next 200 years of the
[38:54] world that that the ability to do so has
[38:57] been Unleashed we didn't have a choice
[39:00] but uh uh
[39:03] when you start something well Einstein
[39:05] said after
[39:07] this has changed everything in the world
[39:09] except how men think
[39:11] and uh
[39:13] I would say the same thing May
[39:16] not not the same thing I don't mean that
[39:19] but I mean they with with AI
[39:22] uh it it can change everything in the
[39:25] world
[39:27] except
[39:28] how men think and behave and
[39:31] that's that's a big step to take
[39:34] it's a good question and it's the best
[39:37] answer we can give Becky
[39:40] this question comes from Tom Seymour he
[39:43] says the first sentence of a recent
[39:45] Financial Times article read Charlie
[39:48] Munger has warned of a brewing storm in
[39:51] the U.S commercial property Market with
[39:53] American Banks full of what he said were
[39:55] bad loans as property prices fall please
[39:58] elaborate on what's going on in
[40:00] commercial real estate how bad will the
[40:03] losses be and what sectors or
[40:05] geographies look particularly bad I'll
[40:07] just add an addendum from another viewer
[40:09] who wrote in and wanted to know if
[40:10] Berkshire would be more active in
[40:12] commercial real estate as a result
[40:15] okay
[40:19] well berkshire's never been very
[40:21] important very active in commercial real
[40:24] estate
[40:25] it it works better for taxable investors
[40:28] than it does for corporations tax the
[40:30] way Berkshire is
[40:32] so
[40:33] I I don't anticipate huge
[40:36] effects on Berkshire but I do think that
[40:39] the hollowing out of the downtowns
[40:42] in the United States and elsewhere in
[40:44] the world is going to be quite
[40:46] significant and quite unpleasant
[40:48] I think the country will get through it
[40:50] all right
[40:51] but as they say it will awfully it will
[40:54] often involve a different set of owners
[40:58] yeah in the buildings the buildings
[41:00] don't go away but the owners do well but
[41:04] but most people like to buy with
[41:06] non-recourse in in real estate and and
[41:10] one time I asked Charlie there was some
[41:13] real estate guy we were talking to him
[41:15] and you know how do they decide how much
[41:17] they can a building like this is worth
[41:19] and it's the answer is it's whatever
[41:21] they can borrow without signing their
[41:23] name and if you look at
[41:27] real estate generally you'll understand
[41:29] what the phenomena that's happening if
[41:31] you do if you remind yourself that
[41:33] that's the attitude of most people that
[41:36] have
[41:37] uh
[41:39] become big in in the real estate
[41:41] business and and uh
[41:43] and it does mean that the lenders are
[41:46] the ones that
[41:48] got the property and of course they
[41:49] don't want the property usually so then
[41:51] the real estate operator comes on
[41:54] negotiating with them and and the banks
[41:57] tend to
[41:58] you know
[41:59] extend and pretend and there's all kinds
[42:02] of activities that arrive out of out of
[42:06] commercial real estate development which
[42:08] occurs on a big big scale but it all has
[42:12] consequences and and I think we're
[42:15] we're about
[42:16] well we are starting to see the
[42:18] consequences of people who could borrow
[42:21] it
[42:22] two and a half percent
[42:24] find out it doesn't work at current
[42:26] rates and they hand it back to somebody
[42:28] that gave them all the money they needed
[42:30] to build it
[42:31] done
[42:33] Charlie's had more experience than
[42:34] really Charlie got it started in real
[42:36] estate though I mean Charlie Charlie
[42:38] yes it
[42:41] it's difficult
[42:44] I like what we do better
[42:48] well as Charlie once said to me when I
[42:51] was leaving his house a few months ago I
[42:54] was visiting him we talked for a couple
[42:56] of hours and I said to Charlie as I left
[42:58] I just it wasn't anybody else in the
[43:00] house and I said except
[43:02] one daughter and I said uh Charlie hello
[43:05] I'll just keep
[43:07] doing what we've been doing and
[43:10] Charlie said without looking up or
[43:12] pausing a second he said that's all you
[43:14] know how to do Warren yeah
[43:19] he was right too ah station
[43:22] three is it
[43:26] hi uh my name is salazi I'm from Santa
[43:30] Santa Clara California and my question
[43:33] is to Charlie and Warren given the rise
[43:36] of disruptive technologies that can
[43:39] improve productivity significantly and
[43:42] AI being one of them how do you envision
[43:46] the future of value investing in this
[43:48] new era and what adaptations or new
[43:52] principles do you think investors should
[43:54] adopt and any recommendations for
[43:56] investors to remain successful in this
[43:59] rapid changing landscape thank you
[44:04] take that one I think value investors
[44:08] are going to have a harder time now that
[44:10] there's so many of them competing first
[44:14] a diminished bunch of opportunities
[44:17] so my advice to Value investors is to
[44:20] get used to making less
[44:24] and
[44:25] Charlie was been telling me the same
[44:27] thing the whole time we've known each
[44:29] other we we get along wonderfully
[44:31] because we are making less
[44:33] yeah well but that's because that mostly
[44:36] I think is because it's larger we were
[44:38] younger we never thought we could manage
[44:40] 508 billion no one or five yeah but
[44:45] I I would argue that uh that uh
[44:50] there's gonna be plenty of opportunities
[44:53] and part of the reason they're going to
[44:55] be plenty of opportunities
[44:57] the tech doesn't make any difference or
[44:59] any of that I mean if you look at how
[45:00] the world changed in them
[45:02] in the years since 1942 when I started
[45:05] to say well
[45:07] how do the kid that doesn't know
[45:08] anything about airplanes it doesn't know
[45:09] anything about androgens and cars and
[45:11] doesn't know anything about them
[45:13] electricity and all that but that really
[45:16] isn't the that's not there the world
[45:18] changing doesn't or new things coming
[45:21] along don't take away the opportunities
[45:22] what gives you opportunities is other
[45:25] people doing dumb things and uh is that
[45:31] [Applause]
[45:33] and
[45:35] I would say
[45:37] that
[45:38] well the 58 years we've been running
[45:40] Berkshire I would say there's been a
[45:42] great increase
[45:44] uh and the number of people doing dumb
[45:47] things and they do big dumb things and
[45:49] the reason they do it to some extent is
[45:51] because they they can get money from
[45:53] other people so much easier
[45:56] than when we started so you could start
[45:59] 10 or 15 dumb insurance companies in the
[46:02] last 10 years and you could become rich
[46:05] uh if you were a Droid at it whether the
[46:09] business succeeded it or not and the
[46:11] underwriters got paid and the lawyers
[46:13] got paid and that creates
[46:17] if that's not on a large scale which it
[46:20] couldn't be done what 58 years ago you
[46:23] couldn't get the money
[46:24] to do some of the dumb things that we
[46:27] wanted to do fortunately uh and uh so
[46:32] I know I think that
[46:34] investing has disappeared so much from
[46:38] this huge
[46:40] capitalistic Market
[46:42] that anybody can play in
[46:44] but the big money is in selling other
[46:47] people ideas that isn't outperforming in
[46:50] outperforming and
[46:52] I think that
[46:54] I think if you don't run too much money
[46:57] which we do but if you're running small
[47:00] amounts of money
[47:01] I think I think the opportunities
[47:04] will be greater but then Charlie and I
[47:07] have always differed on this subject he
[47:09] he likes to tell me how gloomy the world
[47:11] is and I I like to tell them we'll find
[47:14] something and and so far we've both been
[47:16] kind of right
[47:20] on that or not
[47:26] there
[47:28] there is so much money now in the hands
[47:30] of so many smart people
[47:33] all trying to outsmart one another
[47:36] and not promote one another getting more
[47:38] money out of other people
[47:39] and
[47:41] it's a radically different world from
[47:44] the world we started in
[47:48] I suppose it will have its opportunities
[47:50] but
[47:51] it's also going to have some unpleasant
[47:53] episodes but they're trying to outsmart
[47:55] each other
[47:57] in arenas
[47:59] you don't have to play I mean if you
[48:02] look at that Government Bond Market I
[48:04] feel the treasury ball Market I mean
[48:06] you've got this one bill that's out of
[48:08] line with the others when we were over
[48:09] three billion of us the other day and
[48:11] and but
[48:13] those are people the world is
[48:16] overwhelmingly
[48:19] short-term focused and if you go to an
[48:23] investor relations call they're all
[48:25] trying to figure out how to fill those
[48:27] out of sheet to show the earnings for
[48:29] the year and the management is
[48:30] interested in feeding them expectations
[48:32] that will slightly be beaten I mean that
[48:35] that is the world was made to order for
[48:38] anybody that's trying to think about
[48:39] what you do that should work over five
[48:42] or ten or Twenty Years and uh
[48:46] I I just think that
[48:48] I would love to be born today and go out
[48:52] with not too much money and hopefully
[48:54] turn it into a lot of money
[48:56] but
[48:57] and Charlie would too actually just like
[49:00] he he would find something to do I will
[49:03] just guarantee you uh and it wouldn't be
[49:05] exactly the same as before but he would
[49:08] have a big big big
[49:10] pile I would not like the thrill of
[49:13] losing my big pile into a small pie
[49:19] but we like my big piles is the Way It
[49:21] Is Well I like
[49:23] we agree on that incidentally okay we do
[49:26] you're one of the most extreme lovers of
[49:29] the big pile
[49:32] Becky
[49:34] this question is for both Warren and a g
[49:37] it comes from Jason ploner in Livingston
[49:40] New Jersey he says in 2016 you entered
[49:43] into a very unique transaction with AIG
[49:46] where you assumed up to 20 billion
[49:48] dollars of liabilities in exchange for
[49:50] about 10 billion dollars up front can
[49:53] you please provide us with an update on
[49:54] this transaction in light of the
[49:56] increase in interest rates and then in
[49:58] Tokyo just a few weeks ago you talked
[50:00] about the risks of banks with assets
[50:02] that were susceptible to Rising interest
[50:04] rates any insight as to how Berkshire
[50:07] liabilities are susceptible to duration
[50:09] would be appreciated is that direction
[50:11] to Vegeta or me or what both okay let me
[50:14] introduce my one thing and well but
[50:17] Egypt is the key to this he's the one
[50:19] that put the deal together but we got
[50:21] handed 10 billion we'll say uh uh
[50:26] and but we weren't restricted to putting
[50:29] that into into bonds uh so
[50:33] what the exact interest rate interest
[50:36] rates affect us to some degree maybe in
[50:38] terms of the terms uh of the deal we did
[50:42] with AIG or anybody we would do a
[50:44] similar deal with like that
[50:46] but we don't have we don't have to put
[50:48] it in matching bonds or anything of the
[50:50] sort it goes into a general pool of
[50:52] assets which we manage and the assets
[50:56] you know then well the liquid assets now
[50:58] are 130 billion plus and that but it
[51:01] goes in so it you know it it it is not
[51:05] set aside in some little compartment
[51:07] like people like to think uh now any any
[51:10] other insurance no other insurance
[51:11] company could do it but they can't think
[51:14] that way uh they aren't even used to
[51:17] thinking that way but they can't think
[51:18] that way because they don't have our our
[51:20] balance sheet we account for 26 or
[51:22] something like that of the net worth of
[51:25] all property casualty companies in the
[51:26] United States uh so
[51:29] uh so far
[51:32] uh the payments that we have had to make
[51:36] have run modestly and Ajit will correct
[51:40] me on this if I'm wrong because he paid
[51:42] a lot of attention over the the amount
[51:45] we have had to pay has runs slightly
[51:48] below
[51:49] the amount we anticipated having to pay
[51:52] in terms of our share of the losses uh
[51:55] but
[51:56] it served aig's purposes
[51:59] it came to us with
[52:02] where we are in a unique position
[52:04] there's nobody else that was able to
[52:07] write that just like when when we took
[52:09] on the Lloyds I mean Lloyd's said there
[52:13] was no choice other than Berkshire
[52:14] Hathaway when they they essentially
[52:18] resuscitated uh their Market
[52:21] by laying off a lot of liabilities on on
[52:26] Berkshire Hathaway so
[52:29] um we won't see those deals very often
[52:31] if if they're for 500 million or
[52:33] something like that somebody else will
[52:34] go in there and offer more money and
[52:37] everybody's looking for money in Wall
[52:39] Street but if they start talking with
[52:42] the deal like the AIG deal there isn't
[52:44] any other stop now
[52:46] uh correct me on all my numbers there a
[52:49] jade
[52:50] no um
[52:52] one way to look at how the deal is
[52:54] performing since we did the deal is at
[52:57] the point we in time when we did the
[52:58] deal we had made certain projections of
[53:01] how much we will pay out each year
[53:05] and what we do is Monitor what the
[53:08] actual payments are since the Inception
[53:10] of the deal and how does that compare
[53:12] with what we expect it to pay out
[53:14] as Warren mentioned these two numbers
[53:17] are very close to each other more
[53:19] specifically the actual payouts are 96
[53:22] percent of what we had projected to pay
[53:25] out at this point in time
[53:27] which is good but not great we are still
[53:30] ahead of the curve if we do end up
[53:32] paying out less than what we projected
[53:35] Not only would we have borrowed money at
[53:38] a very attractive rate meaning less than
[53:40] four percent significantly less than
[53:41] four percent in addition to that we
[53:43] would have made a fee which in 1990
[53:46] which in 2015 dollars would be a million
[53:49] dollars so if you would have borrowed
[53:50] money at less than four percent and we
[53:53] would have made a million dollar fee
[53:54] which is slightly more than what we were
[53:57] expecting to do so net net we're very
[54:00] happy with the deal we're happy we did
[54:01] it uh but the game is not over the
[54:05] taught liabilities are coming down the
[54:07] pike every second day so I'm cautiously
[54:10] optimistic that the deal will work out
[54:12] better than what we expected it to work
[54:14] out well the really interesting thing is
[54:16] that
[54:18] in within Bircher the Casualty Insurance
[54:21] companies have four times as much
[54:24] stockholder Capital between behind each
[54:28] dollar of Premium volume
[54:30] four times
[54:32] normal
[54:33] and of course we see the big deals who
[54:36] would you trust if you had a big
[54:38] liability you wanted to dump on somebody
[54:41] and we have 25 or
[54:45] billion or more
[54:47] coming in from things other than
[54:49] insurance
[54:52] uncorrelated to Insurance every year
[54:54] with no obligations we don't pay
[54:56] dividends if you paid evidence and
[54:58] you know and you cut your dividend try
[55:01] going around trying to write insurance
[55:02] the next day I mean it's a business
[55:04] where the people are counting on you to
[55:06] pay
[55:07] and
[55:08] when we take that 10 billion we don't
[55:11] agree to put it in five-year bonds and
[55:14] 10-year bonds we don't even think that
[55:16] way and the people who do business with
[55:19] us know that they have somebody like
[55:22] nobody else on those and it's going to
[55:24] be able to pay 10 billion you know if no
[55:27] matter what happens to the economy so
[55:30] it's not only the presence of enormous
[55:32] strength in the insurance companies this
[55:34] is the fact we got all these earnings
[55:36] that essentially come in every month and
[55:39] we don't have we don't have a lot of
[55:41] debt I mean we we have debt at the
[55:42] railroad and the energy level but but in
[55:46] terms of the rest of the operation uh
[55:50] and and we don't guarantee that that but
[55:52] but it's probably good uh
[55:55] and it's there just isn't another
[55:57] Berkshire and uh and the Jeep recognizes
[56:01] that when he's negotiating so does the
[56:04] other party if sums are big enough
[56:06] there's all kinds of people that love to
[56:08] get 500 million or 300 million and
[56:10] they'll and they can
[56:12] they may think in terms of lending it
[56:14] out because that's what their insurance
[56:16] companies can do at a somewhat higher
[56:17] rate but that is not a game we play in
[56:19] and we don't have any interest in
[56:22] playing in them
[56:23] okay
[56:24] station four
[56:27] hello I'm Marvin Blum an estate planning
[56:31] lawyer from Fort Worth Texas home to
[56:33] many of your companies in fact Warren I
[56:37] met you at the memorial for our beloved
[56:40] Paul Andrews who was manager of TTI
[56:46] I'd like to get your thoughts on a
[56:48] widespread problem in the world of
[56:51] Estate Planning and that's the failure
[56:53] of most parents to prepare the Next
[56:56] Generation for the inheritance coming
[56:59] their way
[57:01] in particular if the estate includes a
[57:04] family business most parents fail to do
[57:08] business succession planning to plan for
[57:10] who will run the business on the day
[57:13] when not if the founder is no longer
[57:17] there to run it the kids aren't prepared
[57:20] unlike uh King Charles the the other
[57:24] King Charles not King Charlie Munger who
[57:28] has been preparing for his job as king
[57:30] of England now for more than 70 years
[57:34] I sometimes describe the situation like
[57:36] this picture a football game at one end
[57:40] of the field is a quarterback
[57:42] he has great skills he throws a
[57:44] beautiful pass to the other end of the
[57:46] field
[57:47] and at the other end of the field are
[57:49] the receivers
[57:51] they've never been to a practice they
[57:53] don't know the rules of the game
[57:55] they don't know how to work together as
[57:57] a team they're Clueless
[57:59] so the quarterback is the patriarch and
[58:02] The Matriarch the football is the
[58:04] inheritance or the family business
[58:07] and the receivers are the kids
[58:10] that they're going to catch the football
[58:12] and go score a touchdown probably only
[58:15] around 10 percent I've got the picture
[58:17] on on the question
[58:22] no
[58:23] they uh
[58:26] I probably observed as many just because
[58:28] of my age and to some extent because of
[58:30] things like the giving Pleasures I
[58:32] probably observed
[58:33] as many
[58:35] particularly wealthy families the
[58:37] problems and they all are
[58:39] they get very particular
[58:41] uh to the family and uh uh
[58:45] and
[58:46] uh in my family
[58:49] I do not sign a will
[58:52] until my three children
[58:54] have read it
[58:56] understand it and made suggestions now
[59:00] my children are in their 60s
[59:02] and that would not have been a great one
[59:04] success if I'd done the same thing as
[59:07] their 20s it depends on the Family
[59:09] it depends on how the kids feel about
[59:11] each other there's all kinds of things
[59:13] depends on the kind of business you have
[59:15] so there's a there's a thousand
[59:17] variables but I do think
[59:20] that it's
[59:21] if the children are grown and when the
[59:25] will is read to them it's the first
[59:26] they've heard about what the deceased
[59:29] thought about things
[59:32] the burns have made a terrible mistake
[59:34] and uh
[59:36] people
[59:38] people who well I've run into all kinds
[59:42] of situations and some people don't tell
[59:44] their children anything and some of them
[59:46] try and get them to bend to their will
[59:48] by using their their own personal World
[59:51] they make a million mistakes
[59:53] and that's when you don't get to correct
[59:56] uh
[59:59] and certainly in my well Charlie's had a
[01:00:01] lot of experience too well at Berkshire
[01:00:03] we have a simple
[01:00:05] problem of
[01:00:06] uh
[01:00:08] estate planning just hold the goddamn
[01:00:11] stock
[01:00:12] well
[01:00:15] but that doesn't fit everybody Charlie I
[01:00:18] mean uh you know if it's 95 percent
[01:00:24] I don't think it necessarily
[01:00:26] I don't know necessarily whether we have
[01:00:28] billions of dollars you want to leave it
[01:00:30] to your all your children I mean that's
[01:00:31] something that's another question but if
[01:00:33] you're going to play places somewhere I
[01:00:35] just as soon as Berkshire stock is down
[01:00:37] oh you're solving the investment problem
[01:00:40] yeah but you've got the personal problem
[01:00:41] of the fact that when there were four
[01:00:43] one of the kids pulled the other kids
[01:00:46] uh cat's tail or something like that I
[01:00:49] mean you're dealing with human beings
[01:00:52] and the biggest thing you want
[01:00:54] is you want
[01:00:56] you want your children to get along and
[01:00:58] you'll want that all through your life
[01:01:00] and the estate isn't the only place
[01:01:03] where you can mess that up but the it's
[01:01:06] a place where you it's a very easy I
[01:01:09] mean I know a number of cases where the
[01:01:11] people did not know what was in the will
[01:01:13] whether we're using something's involved
[01:01:15] and you know within about 15 minutes
[01:01:17] each one of them had a lawyer and you
[01:01:19] know they don't get a long sense of it
[01:01:21] it's it's a it's important to handle it
[01:01:24] right and uh uh it's important if you
[01:01:29] want your kids
[01:01:31] do have a certain value certain values
[01:01:35] it's important that you live those
[01:01:37] values it's important that you talk
[01:01:39] about it to them or
[01:01:42] they're going they're learning from you
[01:01:45] from the day they're born what you're
[01:01:48] really like and uh don't think that a
[01:01:52] cleverly drawn will will substitute for
[01:01:56] your own behavior in teaching your kids
[01:01:58] the values you hope that they will have
[01:02:01] and then your will should be in
[01:02:04] conjunction with that it should start
[01:02:06] expressing and they grow older and then
[01:02:08] they they they learn to
[01:02:11] they them they learn to
[01:02:14] pass along their values in connection
[01:02:17] with the size of the state if there's
[01:02:19] Family Farms it's one thing if it's a
[01:02:21] bunch of marketable Securities is
[01:02:22] something else but I know in one
[01:02:24] instance
[01:02:25] by particularly Rich fellow that once a
[01:02:30] year
[01:02:30] he'd get those kids together and have a
[01:02:33] dinner and do all kinds of things to get
[01:02:36] them to sign their income tax returns in
[01:02:39] blank because he didn't want them to
[01:02:40] know how much money they had and
[01:02:42] everything well
[01:02:44] if that that isn't going to work I mean
[01:02:47] I don't know why necessarily real words
[01:02:48] with him but uh
[01:02:50] if you want
[01:02:52] you know about Charlie and I've said it
[01:02:54] you know if you want to figure out how
[01:02:56] you want to live your life who you write
[01:02:58] your obituary and reverse engineer it I
[01:03:00] mean you know and uh and Paul Andrews
[01:03:04] incidentally who you mentioned that TTI
[01:03:06] lived as great a life as anybody I've
[01:03:08] known and uh he he thought about these
[01:03:12] problems
[01:03:13] he came to me
[01:03:16] he was 61 I think had all the money Way
[01:03:20] Beyond what he needed didn't care about
[01:03:22] he'd like to give it to give it to
[01:03:24] people he had all kinds of good things
[01:03:25] he wanted to do and he said for a year
[01:03:27] I've been worried about my business TTI
[01:03:30] and he said I've got all the money I
[01:03:33] need the families all the money that I
[01:03:34] need but what do I do with the business
[01:03:36] these people have have helped me
[01:03:39] throughout my life and he says I could
[01:03:41] sell it to a competitor and if I sold it
[01:03:43] to a competitor they'd fire my people
[01:03:46] and keep their people when they put it
[01:03:48] together and if I if I sell it to a
[01:03:51] private Equity Firm or somebody they'll
[01:03:53] they'll be figuring their exit strategy
[01:03:55] as they sign the sign the papers and he
[01:03:58] said
[01:03:59] so I've been thinking about a year and
[01:04:02] uh he said it isn't that you're such a
[01:04:04] great guy he says it's just you're the
[01:04:06] only one left
[01:04:09] and we bought it and we lived happily
[01:04:11] ever after and uh that was a man that
[01:04:15] knew what life was about so with that
[01:04:18] let's go on to Becky
[01:04:20] [Applause]
[01:04:25] uh this question comes from Don
[01:04:27] glickstein in Seattle he says Warren has
[01:04:30] criticized Norfolk Southern's handling
[01:04:32] of its train derailment yet has been
[01:04:34] silent about BNSF bnsf's conduct a
[01:04:38] federal judge ruled in March that BNSF
[01:04:40] intentionally and illegally violated an
[01:04:43] easement agreement on tribal land in
[01:04:45] Washington state by transporting long
[01:04:48] trains of crude oil the same month the
[01:04:51] judge made his ruling a BNSF Train
[01:04:53] derailed on tribal lands spilling oil in
[01:04:55] an environmentally sensitive area what
[01:04:58] is Warren doing to ensure that BNSF and
[01:05:00] other Berkshire subsidiaries fulfilled
[01:05:03] their ethical responsibilities he says
[01:05:05] he's been a Berkshire owner for more
[01:05:06] than two decades and he's concerned that
[01:05:08] Berkshire has no systems to identify and
[01:05:11] dress what he calls reprehensible
[01:05:13] Behavior at BNSF and other subsidiaries
[01:05:15] Greg sure
[01:05:18] so the uh it it is a valid issue that
[01:05:23] our team obviously has been dealing with
[01:05:25] at BNSF we did move uh crude across that
[01:05:29] tribal land we had an agreement that
[01:05:33] allowed us to move X number of of uh
[01:05:37] units per day
[01:05:40] and we did breach it we went over it
[01:05:42] there's uh there was some fundamental
[01:05:44] breakdowns there in that our team didn't
[01:05:46] understand the number of of trains that
[01:05:49] they could move we have had significant
[01:05:52] discussions with the tribe looking to
[01:05:55] resolve the issue recognizing uh we
[01:05:58] obviously been benefited from moving
[01:06:00] those trains and those type of
[01:06:02] discussions will continue
[01:06:05] um I would say there's Lessons Learned
[01:06:08] there that we have to when we make a
[01:06:09] commitment understand what that
[01:06:11] commitment is and and live by it or
[01:06:13] don't assume we can just
[01:06:17] move our trains as we wish or the the
[01:06:19] cargo as we wish we have to respect
[01:06:21] those agreements so there's a there's
[01:06:23] been a moment learned there but at the
[01:06:24] same time we've taken it very seriously
[01:06:26] and attempted to reach a resolution
[01:06:29] there and at some point I I hope we do
[01:06:32] come to a true resolution that's fair
[01:06:34] both to the tri-band to BNSF on the
[01:06:39] derailment side we did have a an issue
[01:06:42] around the track derailed we worked very
[01:06:45] closely with the tribe to mitigate that
[01:06:49] issue instantly where at least over a
[01:06:52] very reasonable period of time they were
[01:06:55] very responsive our team was very
[01:06:57] responsive and there were really no
[01:07:00] long-term environmental impacts to to
[01:07:03] that to that's Bill and as our teams
[01:07:06] highlighted in other comments obviously
[01:07:08] derailments do occur in the industry we
[01:07:11] take them incredibly serious they're not
[01:07:13] all hazardous but irrespective of that
[01:07:15] we're constantly looking at how do we
[01:07:17] prevent them
[01:07:18] how do we detect them when we
[01:07:21] potentially have one that's going to
[01:07:23] occur and what do we do with our trains
[01:07:25] and then ultimately it comes down to
[01:07:27] responding properly because they will
[01:07:30] occur and I think we have an incredibly
[01:07:32] dedicated team that's always ready to
[01:07:34] respond to the communities they're
[01:07:36] impacting
[01:07:39] there are derailments how many how many
[01:07:42] a year yeah well there's uh a thousand
[01:07:45] plus in the industry the the yeah yeah
[01:07:48] it's you start hauling
[01:07:51] right and we're a common carrier we and
[01:07:54] we take heavy very heavy Freight and we
[01:07:56] take them at 100 degrees when it's the
[01:07:58] weather and it's we take it at zero and
[01:08:01] and we go around curves and we have
[01:08:04] grades and uh even a one percent rate if
[01:08:08] you're going down
[01:08:09] down a hill with I don't know how much
[01:08:13] weight behind you I mean there's a lot
[01:08:15] of railroading is not an easy business
[01:08:17] and of course the systems
[01:08:20] were designed you know in the and
[01:08:23] basically in the in the late
[01:08:26] 1800s amid the late 1800s and we have 22
[01:08:31] 000 I think it is miles of track and
[01:08:33] that doesn't count sightings and some
[01:08:34] other things it is not an easy business
[01:08:37] we'll make mistakes our job
[01:08:40] we're not making a mistake because we
[01:08:42] have a derailment you're gonna we will
[01:08:43] have the derailments 10 and 20 years or
[01:08:45] 30 years from now I mean that but we and
[01:08:49] we have to carry certain products we
[01:08:52] wish we didn't have to carry we're a
[01:08:53] common carrier
[01:08:55] do we like carrying chlorine and ammonia
[01:08:57] and all no but they're going to move
[01:09:00] from one place to another in this
[01:09:02] society and we are a common carrier and
[01:09:05] uh we load them and uh if they select
[01:09:10] our railroad but
[01:09:12] we are better than we used to be but we
[01:09:14] got a long way to go I didn't was that a
[01:09:16] fair enough statement absolutely yeah
[01:09:18] okay station five
[01:09:23] hi Mr Warren and Miss Manga my name is
[01:09:28] from China
[01:09:30] company and first of all I'm so excited
[01:09:34] and very honored to be here today and my
[01:09:37] question is with more and more people
[01:09:39] focusing on environmental competition
[01:09:42] protection and the government supporting
[01:09:45] the new energy industry as well so what
[01:09:48] are your thoughts on the continued
[01:09:51] development of new energy how made the
[01:09:54] new energy firm achieve better
[01:09:56] development in future
[01:09:59] yeah well Greg I think it's the best
[01:10:01] answer that because he
[01:10:03] since we bought a company called
[01:10:06] Mid-American but now called Berkshire
[01:10:08] Hathaway energy but he's been talking
[01:10:11] about a yearly preparing reports hoping
[01:10:14] that we can help solve a number of the
[01:10:17] problems and we probably spent more
[01:10:18] money than any utility I'm I would guess
[01:10:21] in the United States absolutely and uh
[01:10:24] and we've just crashed the surface but
[01:10:27] it is not easy
[01:10:29] when you cross state lines I mean it's
[01:10:31] uh uh you've got different jurisdictions
[01:10:34] and we should
[01:10:36] this country should be ahead of word is
[01:10:39] in terms of transmission and uh
[01:10:44] we have been the biggest factor in
[01:10:45] helping that uh but why don't you tell
[01:10:48] them a little bit about it sure things
[01:10:50] weren't so there's no question there's
[01:10:53] an energy transformation going on around
[01:10:55] the globe and and as Warren touched on
[01:10:58] in the U.S and in some ways I would hope
[01:11:01] in here in the U.S it would be
[01:11:04] um we'd at least have a a clear plan
[01:11:06] Across the Nation as to how to uh
[01:11:09] approach that but the reality is it is
[01:11:11] state by state uh with some exceptions
[01:11:14] but so as a result when you think of
[01:11:17] Berkshire Hathaway energy
[01:11:19] we we own uh three U.S utilities there
[01:11:24] and and they'll participate in multiple
[01:11:26] States but they're developing plans
[01:11:28] state by state and then trying to
[01:11:30] integrate them across the the various
[01:11:33] States the the opportunities are
[01:11:35] significant because there is a
[01:11:37] transformation going on uh We've
[01:11:40] outlined our goal on on where we're
[01:11:42] going relative to carbon at bhe where
[01:11:45] they'll buy 20 30 reduce their carbon
[01:11:48] footprint by uh 50 relative to 2005 so
[01:11:53] that's the Paris Accord and the standard
[01:11:55] they want to hold the the utility
[01:11:57] industry or the utility companies do and
[01:12:00] and we're well on that path but to
[01:12:02] achieve it is a true Journey uh I've
[01:12:04] often talked to Warren when we bought
[01:12:05] Pacific Corp back in the mid 2000s we
[01:12:10] immediately recognized uh to build a lot
[01:12:13] of renewable energy like we've been
[01:12:15] doing in the midwest in Iowa but that
[01:12:18] was basically in a single stay 8 now
[01:12:20] Pacific Corp were in Six States we
[01:12:23] started that in the back in the mid
[01:12:24] 2000s here we are and we laid out a
[01:12:27] great transmission plan here's how we're
[01:12:29] going to build it here's how we're gonna
[01:12:31] uh effectuate it and all the benefits
[01:12:34] for our customers over that period of
[01:12:35] time here we are in 2023 and we have a
[01:12:40] little more than a third of that at the
[01:12:42] time it was a six billion dollar
[01:12:43] transmission project today we have a
[01:12:46] little more than a third of it built and
[01:12:48] we've spent probably closer to seven
[01:12:50] billion dollars and it's the right
[01:12:52] outcome it's still a great outcome for
[01:12:54] our customers but that transmission you
[01:12:56] absolutely as part of the transformation
[01:12:58] you absolutely have to build it to
[01:13:01] remove to move all that renewable energy
[01:13:03] and that's sort of the complexity Warren
[01:13:06] was highlighting it is a uh you you
[01:13:09] can't just wake up one day and and solve
[01:13:11] this problem you start with transmission
[01:13:12] and then you build the resources but at
[01:13:16] that same same company and if we look at
[01:13:18] what we're doing across VA G Energy and
[01:13:21] that energy transformation
[01:13:23] we have 70 billion dollars of known
[01:13:26] projects that are really required to
[01:13:30] properly serve our customers and Achieve
[01:13:32] that type of energy uh transformation
[01:13:35] across those utilities and that and
[01:13:37] that's in the coming next in the coming
[01:13:39] 10 years so
[01:13:41] um we have a team that's absolutely up
[01:13:43] to the challenge they're delivering on
[01:13:44] their commitments and it's a very uh
[01:13:47] very good business opportunity for for
[01:13:50] each of our companies and for our
[01:13:51] shareholders because as we deploy that
[01:13:54] Capital we obviously are in a return on
[01:13:56] Equity of it so
[01:13:58] um but it will be a long journey it it
[01:14:00] hap it'll happen over an extended period
[01:14:02] of time and and the further you get out
[01:14:05] there the more dependent more dependent
[01:14:07] upon the uh the evolution of a variety
[01:14:10] of technologies that are progressing but
[01:14:14] not there yet so you you've raised a
[01:14:16] question I want to just take an extra
[01:14:18] minute on because it's so important and
[01:14:20] and I don't really know whether our form
[01:14:22] of government
[01:14:24] uh
[01:14:26] is ideal at all in terms of solving uh
[01:14:30] the problem you described we have solved
[01:14:33] it one time
[01:14:35] in World War II we took a
[01:14:39] country that was semi-lumping along and
[01:14:42] we found ourselves
[01:14:44] in a World War
[01:14:46] and what we did in a World War
[01:14:49] is we brought a bunch of people to
[01:14:51] Washington at a dollar a year
[01:14:53] you know whether it was Sydney Weinberg
[01:14:55] or Goldman's actually you just name him
[01:14:57] and we gave them
[01:14:59] enormous power
[01:15:02] to
[01:15:03] reorient the resources of the United
[01:15:06] States to face the problem that they
[01:15:09] faced which was to create a war machine
[01:15:12] and what they did was they found Henry
[01:15:14] Kaiser you know and told them to build
[01:15:17] ships and they went to the Ford Motor
[01:15:19] Company and said you build tanks and
[01:15:20] some airplanes and they they reordered
[01:15:25] the industrial
[01:15:27] Enterprise of the United States in a way
[01:15:29] that was unbelievable because they had
[01:15:31] the power of the federal government
[01:15:33] and they had the ingenuity
[01:15:35] of American Business and they had the
[01:15:38] facilities of American Business
[01:15:41] and it led to a very successful
[01:15:44] outcome
[01:15:46] but can we do that in a peacetime where
[01:15:48] you've got 50 50 states and you have to
[01:15:51] get them to cooperate and you don't have
[01:15:54] anyone that you can you can issue orders
[01:15:56] but you can't
[01:15:58] you can't designate where the capital
[01:16:00] goes as the other end and you know we
[01:16:03] try and do it with tax incentives and
[01:16:05] all that sort of thing but we haven't we
[01:16:08] haven't created the unity of purpose and
[01:16:11] the Machinery that worked in World War
[01:16:14] II were essentially everybody felt their
[01:16:17] one job was to win the war and we
[01:16:19] figured out how to use our
[01:16:21] industrial capacity to uh in effect
[01:16:25] defeat the axis of powers and uh
[01:16:30] how do you recreate that
[01:16:32] uh uh with
[01:16:36] the present democratic system I I'm not
[01:16:39] sure I know the answer but I sure know
[01:16:40] the problem but um and I think that
[01:16:45] it
[01:16:46] if you can think of a if you've got an
[01:16:49] emergency on your hand I mean you really
[01:16:52] need to re-engineer the engineer energy
[01:16:54] system in the United States I don't
[01:16:57] think I don't think you can do it uh
[01:17:00] without something
[01:17:01] resembling the Machinery the urgency
[01:17:05] whatever
[01:17:06] the capital is there the people are
[01:17:09] there
[01:17:10] uh
[01:17:11] the the objective is obvious
[01:17:14] and uh uh we just don't seem to be able
[01:17:18] to do it in a peacetime where where
[01:17:22] they're used to following a given set of
[01:17:25] a procedure and uh and you know
[01:17:30] China you've got one country and we've
[01:17:32] got we've got 50 states and we got a
[01:17:36] whole different system of government
[01:17:37] that
[01:17:38] we should be up to the test but so far
[01:17:41] it hasn't worked but uh so thank you for
[01:17:44] the question
[01:17:45] Becky
[01:17:47] this question comes from Chris freed in
[01:17:49] Philadelphia he says we know that Greg
[01:17:52] Abel and Ajit Jain are the next
[01:17:54] generation of Berkshire leaders who are
[01:17:56] currently behind Greg and Ajit in their
[01:17:58] prospective roles
[01:18:00] respective
[01:18:03] well that
[01:18:05] will be
[01:18:08] the question that they give their
[01:18:11] well
[01:18:12] Greg will be
[01:18:15] have some things extraordinary
[01:18:17] circumstances but but he's going to
[01:18:19] succeed me and then
[01:18:22] he will have
[01:18:24] be sitting in a position
[01:18:26] where he needs
[01:18:29] his equivalent
[01:18:31] or something close to the corner because
[01:18:33] he's better at many things than I've
[01:18:34] been uh
[01:18:37] he will need that a substitute and when
[01:18:39] the when the question comes word we know
[01:18:42] ajit's opinion on that
[01:18:44] uh
[01:18:45] and but Greg will probably be the one
[01:18:48] that will make that make the final
[01:18:51] decision I mean it says it was being his
[01:18:53] responsibility and
[01:18:55] Ajit will give him his best advice and I
[01:18:58] think the others are very very very high
[01:19:00] that great would follow him so
[01:19:03] but it's not those are not easy
[01:19:06] questions it doesn't like we've
[01:19:09] everybody talks about the executive
[01:19:11] bench and all of that sort of thing
[01:19:12] which is baloney I mean you know
[01:19:14] it they don't have that many people that
[01:19:20] can run five the largest gap net worth
[01:19:23] company and all kinds of diverse
[01:19:26] businesses uh
[01:19:28] but you don't need five people either
[01:19:30] and you need a lot of good operating
[01:19:32] managers and you need somebody at the
[01:19:33] top that allocates capital and make sure
[01:19:36] that you've got the right operating
[01:19:37] manager and we've decided
[01:19:40] to design something where we separate
[01:19:42] the insurance
[01:19:44] and the rest of the business and I think
[01:19:47] it's a very good design
[01:19:48] but they would not be smart
[01:19:52] we wouldn't wish Martin name that
[01:19:55] decision now about the two different
[01:19:59] different uh areas of the business
[01:20:01] because a lot can change between now and
[01:20:04] then and the most likely changes that
[01:20:06] this job changes
[01:20:08] Charlie
[01:20:10] I I got nothing to add
[01:20:13] we have a lot of good people that have
[01:20:16] risen and the Berkshires and City areas
[01:20:19] and
[01:20:21] there's a reason why our operations have
[01:20:24] by and large done better than other big
[01:20:26] conglomerate companies
[01:20:28] and one of them is that
[01:20:30] is that we change managers
[01:20:35] way less frequently than other people do
[01:20:38] and that's helped us
[01:20:42] when Paul Andrews died we know we know
[01:20:44] who he thought
[01:20:46] to take over there but there wasn't any
[01:20:47] reason to
[01:20:49] to announce that I mean that Paul
[01:20:51] Anderson would I wish he'd lived to be
[01:20:53] honored we had we had one of our
[01:20:54] managers die
[01:20:56] not longer going
[01:20:58] how old was he at Karen yeah mid 90s
[01:21:01] Seymour yeah see more away from the
[01:21:03] scene and Seymour
[01:21:06] I wrote him a letter when he was 80 and
[01:21:07] I said you know
[01:21:09] I'm glad you're 80. and I'll write you
[01:21:12] again when you're 90. and uh I wrote him
[01:21:14] again one of his 90 and he didn't make
[01:21:17] it to 100 but but he had a terrific
[01:21:21] uh following him and it really Managed
[01:21:25] IT jointly to some extent as the years
[01:21:26] went by but
[01:21:28] it's Case by case and the main thing to
[01:21:32] do is have the right person running the
[01:21:34] whole place
[01:21:36] okay
[01:21:37] station six
[01:21:42] good morning
[01:21:43] my name's hatch okamot I'm from Miyazaki
[01:21:47] Japan
[01:21:48] a Mr Buffett I was one of the 8 000
[01:21:51] employees at Solomon Brothers that you
[01:21:53] saved I was younger back then I was
[01:21:55] working at seven World Trade Center I've
[01:21:58] always always wanted to thank you in
[01:22:01] person for saving the company its
[01:22:03] employees including myself and my family
[01:22:05] so thank you Mr Buffett thank you
[01:22:13] and and and thank Derek thank Derek
[01:22:16] Martin who actually had been over in
[01:22:18] Japan before that and who I met for the
[01:22:20] first time the day before I put him in
[01:22:21] and he turned out to it wouldn't have it
[01:22:24] wouldn't have worked if Derek hadn't
[01:22:26] come so whatever you taught him in Japan
[01:22:27] thank you
[01:22:29] thank you sir now my question
[01:22:32] time to time you have reminded us to not
[01:22:36] bet against America
[01:22:38] what do you think are the most important
[01:22:41] things for U.S to remain strong and on
[01:22:44] the risk side if the strength of the
[01:22:47] country is undermined what could be the
[01:22:50] reasons
[01:22:52] but we've been
[01:22:53] we've had a lot of tests
[01:22:56] I mean we're such a young country you
[01:22:58] know when you think about Japan and you
[01:23:01] think about the United States it's just
[01:23:02] incredible
[01:23:03] how new we are to the block I mean you
[01:23:06] know what what are we 234 years old
[01:23:09] since
[01:23:10] since we started that that's that's
[01:23:13] that's nothing I mean you know Charlie
[01:23:16] and I combined are two-thirds of we look
[01:23:18] two-thirds of the life of the country
[01:23:21] so and I mean it really has I mean we've
[01:23:23] we've been tested at 46 national
[01:23:25] elections but and and
[01:23:28] we've made some bad choices and we've
[01:23:30] got a Civil War I mean it so the the
[01:23:33] country
[01:23:35] has had an enormous Advantage as though
[01:23:37] in some way because we started with one
[01:23:39] half of one percent of the world's
[01:23:41] population in 1790. and we now have
[01:23:44] something close to 25 percent of the
[01:23:46] world's GDP
[01:23:48] and it wasn't because we had some
[01:23:49] incredible
[01:23:51] advantage in terms of the line it was
[01:23:53] nice to have two oceans and oceans on
[01:23:55] each side back when
[01:23:56] when uh people tried to rule away Rule
[01:24:00] the World by ruling the waves but it
[01:24:03] you know and we've had good neighbors in
[01:24:06] Canada and Mexico but
[01:24:09] it's a miracle and you say how do we
[01:24:12] keep the good parts of the system
[01:24:15] while
[01:24:16] calling out our obvious defects and we
[01:24:19] do it in a very herky-jerky manner but
[01:24:22] net
[01:24:23] the United States
[01:24:25] it's a better place to live
[01:24:28] but almost when I was born by a huge
[01:24:30] Factor
[01:24:31] I mean I just got a root canal a week
[01:24:34] ago
[01:24:35] and I was just thinking I don't know who
[01:24:37] even invented Nova game but I'm for him
[01:24:39] you know I mean
[01:24:42] but in a million ways I mean you can
[01:24:46] roll you can romanticize about the past
[01:24:48] but forget it uh
[01:24:50] it is it is work
[01:24:53] but now we do have an atom bomb and we
[01:24:55] we wish nuclear power yeah you know we
[01:24:58] wish the item had never been split but
[01:25:00] but uh it has been and you can't put it
[01:25:03] back in the bottle so the challenges are
[01:25:07] huge
[01:25:08] our government always looks
[01:25:11] you know my dad was in Congress back in
[01:25:13] the 1940s and
[01:25:15] it looked like a mess then you know it
[01:25:17] all it was unified by the war to some
[01:25:19] degree but it was still very partisan
[01:25:22] now the problem we have I think
[01:25:25] is that partisanship
[01:25:28] and it seems to me has moved toward
[01:25:31] tribalism
[01:25:32] and tribalism
[01:25:34] just doesn't work as well I mean when it
[01:25:37] gets to tribalism you don't even hear
[01:25:38] the other side and tribalism can lead to
[01:25:41] mobs I mean it just it it flows I mean
[01:25:44] you've seen it all Explorers we've seen
[01:25:46] it to a degree here
[01:25:48] so
[01:25:49] we
[01:25:51] we have to refine in a certain way
[01:25:56] our democracy as we go along and we deal
[01:25:58] with the world we live in
[01:26:00] but if I still had a choice of any post
[01:26:03] to be born in the
[01:26:04] in the world I'd want to be born in the
[01:26:06] United States and I'd want to be born
[01:26:07] today I mean it's it is a
[01:26:11] it is a better world than we've ever had
[01:26:13] and with
[01:26:16] present-day Communications we can also
[01:26:18] see it seem much more how terrible it is
[01:26:21] in many ways
[01:26:22] and it's got problems when I was born in
[01:26:26] 1930
[01:26:27] there were two billion people in the
[01:26:29] world
[01:26:30] and now there's maybe 7.7 billion and
[01:26:33] growing
[01:26:34] and we went Millennium with really no
[01:26:39] change in population so we and of course
[01:26:42] we've introduced energy into
[01:26:45] uh in an incredible way
[01:26:48] into something where
[01:26:50] we now have
[01:26:51] 7.7 billion people using way more energy
[01:26:54] than they did when I was born when there
[01:26:57] were two billion people so
[01:26:59] it's
[01:27:01] it's an exciting world it's a
[01:27:03] challenging world and I I you know I
[01:27:06] don't know the solutions on things I do
[01:27:08] think that we do need to think about
[01:27:09] different solutions in terms of how we
[01:27:12] get important
[01:27:14] problem solved and that we don't kid
[01:27:16] ourselves that something magic will
[01:27:19] happen or that everybody will get
[01:27:21] together and we'll all just cheer and
[01:27:24] they'll go away by 2050 or anything it
[01:27:26] uh uh and how well we adapt to them we
[01:27:31] will see I would say
[01:27:34] so far it doesn't look very promising
[01:27:36] but then I'm sure that
[01:27:38] when Lincoln looks at it
[01:27:40] what was going on in the Civil War
[01:27:41] didn't look very promising either so I
[01:27:44] think that that the U.S is capable of
[01:27:46] doing remarkable things and I think
[01:27:49] I wouldn't surprise me if they do it
[01:27:51] again Charlotte charleming are you
[01:27:53] well I'm slightly less optimistic than
[01:27:56] warranty
[01:27:58] I think the best
[01:28:01] wrote ahead to human happiness as we
[01:28:04] expect less
[01:28:06] I think it's going to get I think it's
[01:28:07] going to get tougher
[01:28:09] and I think the solution of having a
[01:28:13] huge proportion of the young and
[01:28:15] brilliant people all the way to wealth
[01:28:17] management
[01:28:18] is a crazy development in terms of
[01:28:21] its natural consequences for American
[01:28:24] civilization we don't need as many
[01:28:26] wealth managers as we have
[01:28:30] Charlie was born on January 1st 1924.
[01:28:34] and
[01:28:36] you'd hate to go back to that wouldn't
[01:28:38] you Troy yes I would and I I I like more
[01:28:41] worlds managers who were just merely
[01:28:43] reflecting the fact there's more wealth
[01:28:45] but we've got
[01:28:48] I don't like everybody going into wealth
[01:28:50] management of MIT or something it's I
[01:28:54] think the world's a little crazy now
[01:28:58] take your choice okay Becky
[01:29:04] now this question comes from Dennis
[01:29:07] degennaro
[01:29:08] as Warren stated in the 2022 annual
[01:29:11] report Berkshire will always hold a
[01:29:13] boatload of cash in U.S treasury bills
[01:29:15] it will also avoid behavior that could
[01:29:18] result in any uncomfortable cash needs
[01:29:19] at inconvenient times including
[01:29:22] Financial panics and unprecedented
[01:29:25] Insurance losses
[01:29:27] after Warren passes away his a shares
[01:29:29] will be converted into B shares and
[01:29:31] distributed to various foundations these
[01:29:33] foundations will then sell the shares to
[01:29:35] fund their causes Warren estimates it
[01:29:37] will take 12 to 15 years for all his
[01:29:39] shares to be sold I worry that a
[01:29:42] corporate Raider like Cairo icon or a
[01:29:44] group will buy up enough of these shares
[01:29:46] to take control of Berkshire and
[01:29:47] completely disregard Warren's philosophy
[01:29:49] of holding a lot of cash in U.S treasury
[01:29:51] bills and instead be greedy Reckless and
[01:29:54] highly speculative and ruin berkshire's
[01:29:56] position as a rock-solid financial
[01:29:58] Fortress I also worry that changes might
[01:30:01] be made in how Berkshire subsidiaries
[01:30:03] are run do Warren and Charlie worry that
[01:30:05] these things could happen
[01:30:07] well I think it's fair to say we think
[01:30:10] about it plenty but I don't I don't I
[01:30:12] don't I don't worry enormously if we
[01:30:16] it is true that
[01:30:18] that
[01:30:20] uh Greg and the directors will have a
[01:30:22] honeymoon period for a long time because
[01:30:24] simply because uh of the boats it will
[01:30:28] still remain I mean it and and uh
[01:30:32] but it's true that eventually they will
[01:30:33] get judged
[01:30:34] based on how well
[01:30:37] our operation fairs versus others now if
[01:30:39] we don't
[01:30:40] pay any dividends and
[01:30:42] in 12 or 15 years
[01:30:44] you're talking a trillion and a half and
[01:30:46] it would take to take over and and uh
[01:30:49] I think if we can't
[01:30:51] that that limits the group they like to
[01:30:54] think about how much they can borrow
[01:30:55] against it it doesn't work when you uh
[01:30:58] and and some of these
[01:31:01] there's nobody to come close to doing it
[01:31:04] themselves and I think that the
[01:31:07] important thing is that Berkshire
[01:31:09] regarded the be regarded as a National
[01:31:13] Asset rather than a national liability
[01:31:15] we've got to be a plus to the country
[01:31:17] with our form of operation and we
[01:31:19] certainly have got a record
[01:31:22] which
[01:31:23] will then be 12 or 15 years longer done
[01:31:27] with much more Capital more companies
[01:31:29] more things will have happened where our
[01:31:33] hundreds of billions can work its way
[01:31:36] into the economy in terms of lots of
[01:31:39] jobs lots of products lots of behavior
[01:31:42] and it can be compared with other things
[01:31:44] so I
[01:31:45] I I think we went out of if we deserved
[01:31:48] to win out and I think uh I think the
[01:31:51] odds of that happening are very very
[01:31:53] very high
[01:31:55] Charlie
[01:31:59] well we
[01:32:01] I don't spend much time worrying about
[01:32:03] fluent can happen 50 years ago and ever
[01:32:07] I'm dead
[01:32:08] I I think you sort of take care of each
[01:32:11] day's responsibilities pretty well and
[01:32:14] think ahead as well as you can
[01:32:16] and you just take the results as they
[01:32:18] fall
[01:32:20] so I'm I'm philosophical
[01:32:24] but I I'm not I'd be spreading
[01:32:26] unnecessarily
[01:32:30] okay
[01:32:32] neither one of us are worried basically
[01:32:34] uh but we but but we plan we do plan and
[01:32:38] and you know I've got a model in my mind
[01:32:41] of what
[01:32:42] Berkshire has been that model's getting
[01:32:44] it's been modified plenty of times over
[01:32:46] 58 years and the one thing I know
[01:32:48] initially is or very quickly was it
[01:32:51] shouldn't be a textile company that was
[01:32:52] that was an important decision and and I
[01:32:55] mean we've just played the hand as a as
[01:32:58] a come along and
[01:32:59] and we made a few really good decisions
[01:33:03] and we will never make a decision that
[01:33:05] kills us only things that are a threat
[01:33:08] to the planet
[01:33:10] um we don't have any answer for those
[01:33:11] but we do we keep ourselves in better
[01:33:15] shape than anybody else that and we just
[01:33:20] aren't going to have big maturities of
[01:33:23] debt that come along we aren't going to
[01:33:26] have
[01:33:27] uh insurance policies that be can be
[01:33:29] cashed in at mass and we will sit with
[01:33:32] the Lord what looks like a huge amount
[01:33:34] of capital and but there's a huge amount
[01:33:36] of capital but there's a huge amount of
[01:33:37] earning power there's a huge amount of
[01:33:38] diversity everything so our business
[01:33:42] model
[01:33:43] will be graded and it'll be graded
[01:33:45] against a lot of a lot of people that
[01:33:48] we'd like to be graded against so uh I
[01:33:52] think we're handling something very
[01:33:54] secure
[01:33:55] over to the Future and I think we've got
[01:33:57] the shareholder base like nobody has I
[01:34:00] mean there isn't anybody in the country
[01:34:01] that I know of unless they've had a
[01:34:03] shareholder an employee-owned company
[01:34:06] prior to going public or something of
[01:34:07] the sort but but
[01:34:09] this is the product of you know the
[01:34:13] 58 years of of
[01:34:15] regarding the shareholder as the owner
[01:34:19] of the company
[01:34:20] but what does that mean that means
[01:34:22] having happy customers it means being it
[01:34:25] being means
[01:34:27] being welcomed by your community rather
[01:34:29] than having them turn you away it means
[01:34:33] that the government feels better with
[01:34:35] you if there's a financial crisis
[01:34:37] because you're
[01:34:38] you can provide something that actually
[01:34:40] the company the country can't under some
[01:34:43] circumstances and you'll be there and if
[01:34:46] it may and same time it'll be good good
[01:34:49] for the business uh and we will have
[01:34:51] crises of one sort or another but if
[01:34:55] they aren't challenging the planet which
[01:34:57] worries you in terms of some of the
[01:34:59] threats that we have
[01:35:01] were
[01:35:03] will be a plus to the United States and
[01:35:05] if we're close to the United States
[01:35:06] we'll we'll survive
[01:35:09] okay
[01:35:14] station Seven
[01:35:19] Mr Buffett and Mr Munger thank you for
[01:35:23] having us this weekend
[01:35:25] my name is Beau Clayton and I'm from
[01:35:28] Durham North Carolina
[01:35:30] one of the reasons that we are all here
[01:35:33] is that your great storytellers
[01:35:37] and we carry those stories back home
[01:35:39] with us
[01:35:41] can you please share a couple stories
[01:35:44] that maybe we haven't heard before
[01:35:49] about Mr Abel and Mr Jane
[01:35:53] that capture their character and their
[01:35:58] caliber as leaders
[01:36:01] well
[01:36:07] I'll start out with a Jeep
[01:36:10] he walked into the office and
[01:36:13] 1986 and I had gotten the bright idea of
[01:36:16] going into the reinsurance business I
[01:36:18] think in maybe 1969 so I'd stumbled
[01:36:20] along
[01:36:21] uh for 17 years and
[01:36:25] I
[01:36:26] wonderful guy that ran it uh
[01:36:31] uh but he also liked certain Brokers and
[01:36:35] I mean he was running at the traditional
[01:36:38] wave
[01:36:39] top calls top quality and everything
[01:36:42] else but but uh but he fell into he he
[01:36:47] didn't try and change the system he
[01:36:50] tried to improve the system and uh to
[01:36:53] some degree and
[01:36:55] we just we went nowhere 17 17 years
[01:36:59] wandering around to the Wilderness and I
[01:37:01] thought I was
[01:37:02] um I knew we could have something good
[01:37:04] and then the Jeep came in on a Saturday
[01:37:07] and uh uh Mike Goldberg and
[01:37:12] steered him in I think and and uh Mike
[01:37:15] deserves to be enshrined and perpetuity
[01:37:18] for that act and uh I talked with him a
[01:37:22] while I think maybe I was opening the
[01:37:23] mail on Saturday while I talked with him
[01:37:25] and and he had absolutely zero
[01:37:29] experience with
[01:37:31] with insurance
[01:37:33] but it actually seen a good bit of how
[01:37:36] Corporate America operated
[01:37:38] because they
[01:37:40] 've been in management consulting and
[01:37:43] after talking with him I
[01:37:45] I knew I'd struck golden and uh
[01:37:48] so I hired him and
[01:37:51] gave him the backing of some money
[01:37:54] uh and we had a very good period in the
[01:37:58] market almost right away for him to act
[01:38:01] and and the Jeep uh
[01:38:05] you know if I had the
[01:38:07] top pick of 10 Insurance managers in the
[01:38:10] world I'm I I could take all ten and
[01:38:14] they wouldn't you can't replace
[01:38:17] Ajit and uh
[01:38:19] we still
[01:38:21] enjoy talking I don't we don't talk as
[01:38:23] frequently as he used to but we should
[01:38:25] talk about every day
[01:38:27] but
[01:38:29] he is
[01:38:31] he's one of a kind and
[01:38:33] you know what if they're going to stick
[01:38:35] around long enough you only need one of
[01:38:37] a kind Paul Andrews stuck around a TTI
[01:38:41] had all the money in the world
[01:38:43] every time I talk to him about getting a
[01:38:45] raise or something of the sort he said
[01:38:47] we'll talk about that next year I just
[01:38:50] he was not what you get when you get the
[01:38:52] top draft picks from the leading
[01:38:54] Business Schools and I will say this I
[01:38:57] have never looked at where anybody went
[01:38:59] to school
[01:39:00] in terms of
[01:39:02] of hiring I mean I I just somebody
[01:39:04] mailed me a resume or something I don't
[01:39:06] care where they went to school uh
[01:39:09] uh and it just so happens that
[01:39:13] that she went to some pretty good
[01:39:15] schools but he isn't the Jeep because he
[01:39:17] went to the schools and uh
[01:39:20] Charlie didn't tell a story or two um
[01:39:23] how'd you find Louis vincenti
[01:39:26] well he was there
[01:39:28] I I but you got to recognize him I asked
[01:39:32] Louie once how he managed to play first
[01:39:35] string football at I think Stanford
[01:39:37] when he only weighed 165 pounds
[01:39:41] and he said well he says I was pretty
[01:39:42] quick
[01:39:44] and
[01:39:45] he was pretty quick but
[01:39:48] we have found a lot of people within our
[01:39:51] companies who were pretty quick
[01:39:52] it's it's a
[01:39:54] yeah we had we had one guy that quit at
[01:39:56] fourth grade didn't in Ben Rosner Am I
[01:39:59] Wrong oh yeah totally self-educated
[01:40:02] Ben Rosner knew more about retailing and
[01:40:05] difficult neighborhoods and anybody
[01:40:08] and
[01:40:10] he watched everything in his business
[01:40:12] like a hawk and he was a he was amazing
[01:40:15] now there was an example
[01:40:17] we never found anybody who could do what
[01:40:19] when band died that billability left us
[01:40:23] yeah and you want a story it's kind of
[01:40:25] interesting because Ben Rosner
[01:40:28] had a partner Leo Simon
[01:40:31] at least Leo Simon was uh Moe
[01:40:34] annenberg's son-in-law
[01:40:36] and Leo therefore
[01:40:39] it was very very very wealthy
[01:40:42] and uh
[01:40:43] and then started with nothing but they
[01:40:46] they liked each other
[01:40:48] and
[01:40:49] one time
[01:40:51] well before they got
[01:40:53] involved in the in the business
[01:40:56] uh the business we bought but they got
[01:41:00] the idea of buying a
[01:41:03] submarine from World War One
[01:41:07] and taking it to the century of progress
[01:41:09] or the World's Fair in effect in Chicago
[01:41:12] I think in 1933
[01:41:14] so they bought the submarine for not
[01:41:16] probably nothing and they figured you
[01:41:18] know the average
[01:41:20] guy from Walmart was going to his first
[01:41:21] World's Fair getting a submarine for a
[01:41:24] quarter or something that they'd pay it
[01:41:26] so they hauled it
[01:41:29] from Florida wherever they got they
[01:41:31] hauled it to Chicago and then they got
[01:41:33] into Chicago
[01:41:34] and they were hauling a submarine down
[01:41:37] the streets of Chicago and it was
[01:41:41] creating traffic problems like nobody
[01:41:44] could imagine so a cop came over
[01:41:47] and he said
[01:41:49] to Ben
[01:41:51] he says what do you think you guys are
[01:41:53] going with a submarine Ben says he says
[01:41:58] well he said you'll have to talk to my
[01:42:00] partner Mr Capone and the cop the cop
[01:42:04] says girl I know just keep going and
[01:42:06] that was that was Ben Roger and then Leo
[01:42:09] Simon died
[01:42:10] and when he died in
[01:42:12] 1967 or so
[01:42:15] uh Ben Rosner kept delivering half thee
[01:42:19] prophets to his widow
[01:42:22] who was incredibly Rich of course being
[01:42:24] no Anna birks first born born daughter I
[01:42:27] think I think I think Moe had nine
[01:42:30] nine girls in a row before Waller came
[01:42:33] along the tenth I may be lost by one but
[01:42:36] anyway I went to this fancy
[01:42:39] apartment and anyway
[01:42:41] then
[01:42:43] then kept her in for a half
[01:42:46] the deal and he had her sign the rent
[01:42:48] checks just so she would look like she
[01:42:51] was doing something in this business
[01:42:53] and she didn't need the money obviously
[01:42:55] but he just felt he was obligated once
[01:42:57] his partner Leo died
[01:42:59] and then she started criticizing him
[01:43:01] and at that point
[01:43:03] then
[01:43:05] went to her his lawyer
[01:43:07] was her lawyer actually will felsteiner
[01:43:10] I don't know whatever happened to will
[01:43:12] but he gave me he gave me a call because
[01:43:14] Ben wanted to
[01:43:16] call me because he wanted me to buy it
[01:43:18] and he wanted me if I bought it
[01:43:22] he'd be rid of the partners ex-partner's
[01:43:25] wife
[01:43:26] and uh and he'd gotten he had me and
[01:43:31] Charlie come back
[01:43:32] and we went to will felsteiner's office
[01:43:35] and Ben says I'll work till the end of
[01:43:37] the year and that's all but I'll show
[01:43:39] you this thing for six million bucks and
[01:43:40] I had two million to cash and a couple
[01:43:42] million in real estate and a couple
[01:43:43] million of operating earnings this is
[01:43:45] crazy
[01:43:46] but he fell off he was getting a lousy
[01:43:49] prize
[01:43:50] she was taking a half of the lousy price
[01:43:53] for half the money
[01:43:55] so uh
[01:43:57] uh
[01:43:59] he looked at me at some point
[01:44:01] Charlie you described the rest of it
[01:44:03] again he said I heard here you're the
[01:44:06] fastest draw in the west he says draw
[01:44:10] we're one of the New York lawyer's
[01:44:12] office yeah and this guy is he's selling
[01:44:15] he's selling his baby and and he told us
[01:44:18] he's leaving I got Charlie on this side
[01:44:20] I said if if this guy leaves at the end
[01:44:23] of the year he can throw away every
[01:44:24] psychology book that's ever been written
[01:44:26] I mean it isn't happening and uh so we
[01:44:29] bought it and we lived happily ever
[01:44:31] after with Ben and
[01:44:32] one time
[01:44:34] he was taking me over to see a property
[01:44:36] we had in Brooklyn
[01:44:38] and uh and along the way I said
[01:44:42] uh
[01:44:44] then I
[01:44:46] you know I promised you I wouldn't
[01:44:47] interfere in the business when we
[01:44:50] started and he knew a butt was coming
[01:44:52] and he just said Thank You Warren and
[01:44:55] they're shooting him
[01:44:57] he was a lot of fun we had so many Ben
[01:44:59] Rosner stories but now you've heard one
[01:45:01] that hasn't been published before okay
[01:45:03] Becky
[01:45:06] this question comes from chai gohil
[01:45:09] he writes this is for a G reinsurance
[01:45:12] industry is going through one of the
[01:45:14] hardest pricing environments in the last
[01:45:16] 15 years Berkshire historically has
[01:45:19] participated during these stress times
[01:45:21] when economic returns are very
[01:45:22] attractive this year it appears
[01:45:24] Berkshire has not been interested in
[01:45:26] deploying its resources towards property
[01:45:28] cat reinsurance despite such strong
[01:45:30] returns can you elaborate on reasons for
[01:45:33] not participating despite these returns
[01:45:35] and your broader view on how you're
[01:45:37] planning to shape your reinsurance
[01:45:39] business post acquisition of Allegheny
[01:45:44] in terms of Allegheny that's an easy
[01:45:47] response we look we treat our operating
[01:45:51] units independent of each other and as
[01:45:54] far as Allegheny is concerned they have
[01:45:55] a major presence in the reinsurance
[01:45:57] business
[01:45:58] under the brand name of transatlantic
[01:46:00] Ree that company will operate the way
[01:46:03] it's been operating in the past there'll
[01:46:05] be no change in terms of strategy or
[01:46:07] management and they will keep doing what
[01:46:10] they're doing they've been very
[01:46:12] successful and hopefully they'll keep
[01:46:13] being successful
[01:46:15] now in terms of the property cat
[01:46:18] business that I have been active in over
[01:46:21] these last several years you are right
[01:46:23] that the last 15 years has been a
[01:46:26] difficult time prices have not been
[01:46:28] attractive and even though we have had
[01:46:31] some presence in the property cat
[01:46:33] business in the last 15 years it really
[01:46:35] is been minimal
[01:46:38] this December 31st which is a big
[01:46:41] renewal date for Cattery insurance we
[01:46:44] were hoping that we would get a few days
[01:46:46] in the Sun and we'd be able to deploy
[01:46:49] our capital and be able to write some
[01:46:53] fairly attractive business
[01:46:55] as it happened
[01:46:56] towards the end of December till about
[01:46:59] the third week of December I was very
[01:47:02] optimistic that we would get a chance to
[01:47:04] put put several billion dollars on on
[01:47:07] the books
[01:47:09] but in the last 10 days of uh December
[01:47:12] unfortunately a lot of capacity came out
[01:47:14] of the Woodworks pricing that we were
[01:47:17] expecting to realize didn't really come
[01:47:19] and meet our pricing requirements as a
[01:47:21] result of which January 1 was a big
[01:47:23] disappointment we did not write as much
[01:47:25] as we were hoping to write now fast
[01:47:28] forward to April 1 which is another big
[01:47:31] renewal date we
[01:47:33] had a lot of powder dry and we were
[01:47:36] lucky that we kept the powder dry
[01:47:37] because April 1 suddenly prices zoomed
[01:47:40] up again a lot higher than what they
[01:47:42] were on January 1 and started to look
[01:47:44] attractive to us
[01:47:45] so
[01:47:47] now we have a portfolio that is very
[01:47:51] heavily exposed to property catastrophe
[01:47:53] uh to put that in perspective our
[01:47:56] exposure today is almost 50 percent more
[01:48:00] than what it was uh five six months ago
[01:48:03] so you know we I think we have written
[01:48:07] as much as our capacity will allow us to
[01:48:11] write we are very happy with what we've
[01:48:13] written the margins have been healthy
[01:48:15] the only thing that I want to mention to
[01:48:18] you is that while the margins have been
[01:48:21] healthy we have a very unbalanced
[01:48:25] portfolio what that means is if there's
[01:48:28] a big hurricane in Florida
[01:48:30] we will have a very substantial loss as
[01:48:35] opposed to that if we have a very big
[01:48:36] loss anywhere other than Florida
[01:48:39] relative to our competition we will have
[01:48:41] a much smaller loss net net I'm very
[01:48:45] happy with the portfolio it's been a lot
[01:48:47] better it is a lot better than what it's
[01:48:49] been in the past uh I don't know how
[01:48:52] long it'll last and of course
[01:48:55] if the hurricane happens
[01:48:57] in Florida we could lose
[01:49:01] across all the units we could lose as
[01:49:03] much as 15 billion dollars
[01:49:05] and if there isn't a loss we'll make
[01:49:08] several billion dollars as profit
[01:49:11] and LG tell them how long when you
[01:49:14] called me and said you'd like to expose
[01:49:16] us to
[01:49:17] whatever was a couple billion more of of
[01:49:20] exposure how long I took to say yes yeah
[01:49:23] uh so the way we think about our
[01:49:26] exposure is you know in in the property
[01:49:29] in the insurance operations collectively
[01:49:31] across the entire company uh given that
[01:49:35] we have about a little less than 300
[01:49:37] billion of capital we think of that as a
[01:49:40] 55
[01:49:41] exposure that we're willing to take on
[01:49:43] so to complete Warren's story
[01:49:47] a few weeks ago we had about 13 billion
[01:49:49] dollars of exposure all across like uh
[01:49:52] the globe and I called up war and I said
[01:49:55] we have to 13 it'll be nice if we can go
[01:49:57] up to 15 that's a good round number and
[01:50:00] that was less than a 30 second phone
[01:50:02] call
[01:50:04] I think Warren said yes without even
[01:50:06] listening to what the numbers
[01:50:09] I hope he calls me again
[01:50:13] okay station eight
[01:50:19] hello
[01:50:20] my name is adal Flores and I've been a
[01:50:23] shareholder for about 16 years and I'm
[01:50:25] coming from Guadalajara Mexico
[01:50:28] my my question is for Warren and Charlie
[01:50:33] companies have the Eternal dilemma
[01:50:35] between bought Building Products that
[01:50:37] can make profits and increase their
[01:50:39] company competitive position in the best
[01:50:42] case you can build products that have
[01:50:44] both characteristics at the same time
[01:50:46] like Google did but most of the time
[01:50:48] companies need to choose between
[01:50:50] short-term profits and long-term
[01:50:52] defensibility for example Amazon was
[01:50:55] focused on building their famous Amazon
[01:50:57] flywheel with limited profits initially
[01:51:00] in order to abstain obtain stronger
[01:51:03] Network effects with the hope of getting
[01:51:05] more defensible profits in the future
[01:51:07] when you invest you constantly speak
[01:51:10] about the importance of building
[01:51:11] competitive modes what advice would you
[01:51:14] give to CEOs about how to balance this
[01:51:16] dilemma which is essentially short-term
[01:51:18] profit versus long-term definitibility
[01:51:21] thank you
[01:51:22] well the answer to control your destiny
[01:51:25] which we've been able to do it uh
[01:51:27] Berkshire so
[01:51:29] we have we feel no pressure
[01:51:32] from Wall Street uh
[01:51:36] you know we don't have investor calls we
[01:51:38] don't have to make promises we we get a
[01:51:42] chance to make our own
[01:51:43] mistakes and and occasionally find
[01:51:45] something that that works well but we
[01:51:48] recognize that the people in this room
[01:51:51] and people like them
[01:51:52] uh are the ones we're working for and
[01:51:56] we're not working for a bunch of people
[01:51:58] that that care about whether we meet the
[01:52:01] quarter estimate or anything so we have
[01:52:03] a freedom
[01:52:04] uh
[01:52:06] that we that we get to use and
[01:52:11] we're interested in men we're interested
[01:52:14] in owning a wonderful business forever
[01:52:16] we'll learn very many wonderful
[01:52:17] businesses but we do learn
[01:52:21] a lot as we go along we we Charlie and I
[01:52:24] have often mentioned how we learn so
[01:52:26] much when we bought C's candy which we
[01:52:29] did but we learned when we bought Ben
[01:52:32] Rogers
[01:52:33] chain of women's dress shops spread all
[01:52:36] over the
[01:52:37] the eastern part of the country we
[01:52:40] learned when we tried them
[01:52:43] getting into the department store
[01:52:45] business back in 1966 and
[01:52:47] as the ink was drawing on our purchase
[01:52:49] price we realized we'd done something
[01:52:51] dumb I mean but we're learning all the
[01:52:54] time how consumers behave
[01:52:56] I'm not going to be able to learn the
[01:52:59] technical aspects of businesses but that
[01:53:02] you know that that be nice if I knew it
[01:53:06] but but it isn't essential and you know
[01:53:09] we are obviously uh
[01:53:13] we've got
[01:53:15] a business at Apple which is larger than
[01:53:19] our energy business and we may only own
[01:53:22] Five Points six or seven percent but our
[01:53:26] ownership goes up every year and I don't
[01:53:29] understand the phone at all but I do
[01:53:32] understand consumer Behavior
[01:53:34] and I know how people think about
[01:53:38] whether to buy a second car I know how
[01:53:40] they go out to different We Own auto
[01:53:43] dealerships we only we're learning all
[01:53:46] the time from all of our businesses how
[01:53:49] people react to Garanimals versus you
[01:53:52] know selling them something else and and
[01:53:54] so seize was a sort of breakthrough but
[01:53:58] but it just we just keep learning uh
[01:54:02] as to more about how people behave and
[01:54:06] how a good business can turn into a bad
[01:54:09] business and how some good businesses
[01:54:11] can maintain uh uh they're competitive
[01:54:15] advantage over time and and so
[01:54:21] um
[01:54:21] we don't
[01:54:23] we don't have some formula that person
[01:54:27] people we just
[01:54:29] but we can also tell them
[01:54:31] in 10 seconds whether it's something of
[01:54:34] Interest I mean with you know when when
[01:54:36] uh I get these calls and we want to send
[01:54:39] decks and all that sort of which is
[01:54:41] nonsense I mean it uh uh it's a bunch of
[01:54:45] guys sitting
[01:54:47] that get paid for drawing up these
[01:54:49] projections of the future and everything
[01:54:51] like that if they knew the future you
[01:54:52] know we don't know the future but we do
[01:54:54] know certain kinds of businesses we know
[01:54:56] what the right price is and we know
[01:54:58] what we think we can project out in
[01:55:01] terms of consumer Behavior Uh and
[01:55:05] consumer and threats
[01:55:07] do a business and then and that's what
[01:55:10] we've been about and that's what we'll
[01:55:11] continue to about we do get
[01:55:14] we don't get smarter over time we get we
[01:55:17] get a little wiser though uh
[01:55:20] following it over time and and you can
[01:55:22] do it while sitting in the office with a
[01:55:24] telephone too which we like Charlie well
[01:55:26] tell them the story of the Japanese
[01:55:28] investment that that should be told
[01:55:31] again that that that's
[01:55:33] that's a nice story
[01:55:35] you know well it was pretty simple I
[01:55:37] mean I
[01:55:38] you know other
[01:55:40] back when I started other people for
[01:55:42] going through Playboy and I was going
[01:55:44] through Moody so that you know basically
[01:55:46] and uh uh there's a movie out called
[01:55:49] Turn every page but which I
[01:55:52] saw again for the second time a couple
[01:55:54] of days ago Lizzie got leaving I
[01:55:56] recommend everybody in this world watch
[01:55:58] that because I turned every page in the
[01:56:01] past and uh I did it for thousands and
[01:56:04] thousands of pages and Moody's and I did
[01:56:06] it at the Department of Public Utilities
[01:56:08] in in Boston I did it in Newton the
[01:56:11] insurance department that it just kept
[01:56:13] turning Pages well that that goes on for
[01:56:18] a while but now we need Big Ideas
[01:56:23] in order to find things and uh and what
[01:56:25] was your question Charlie tell them
[01:56:27] about the Japanese well the Japanese
[01:56:29] thing was was simple I mean it kind of I
[01:56:32] like looking at companies every I mean I
[01:56:34] like looking at
[01:56:35] figures about companies and and here
[01:56:38] were five
[01:56:39] very very
[01:56:41] substantial companies understandable
[01:56:43] companies
[01:56:44] most of them uh maybe all of them we'd
[01:56:48] done business with them in a dozen
[01:56:50] different ways if you go a couple miles
[01:56:51] from where this place is the our last
[01:56:55] coal generating plant was built by one
[01:56:58] of the companies that so
[01:57:02] here they were
[01:57:04] they were sitting
[01:57:06] as a group
[01:57:08] where they were earning we'll say 14
[01:57:10] percent
[01:57:11] uh on what we were going to pay to buy
[01:57:13] them they were paying decent dividends
[01:57:16] they were going to repurchase the shares
[01:57:18] in some cases they owned a whole bunch
[01:57:20] of businesses that we could understand
[01:57:22] as a group although we didn't mean we
[01:57:24] had deep understanding on anything but
[01:57:26] we've seen them operate and everything
[01:57:27] there wasn't anything to it
[01:57:29] and at the same time
[01:57:31] we could take out the currency risk
[01:57:34] by financing in in the
[01:57:37] and that was going to cost us a half of
[01:57:39] one percent well if you get 14 on one
[01:57:41] side a half a percent on the other side
[01:57:43] and you've got money that you know
[01:57:46] forever and they're doing intelligent
[01:57:50] things and they're sizable
[01:57:52] so we just
[01:57:53] started buying them I didn't even
[01:57:55] probably tell Greg until
[01:57:57] maybe six months after we'd gotten going
[01:58:00] and and then we hit five percent
[01:58:03] uh in all of them we announced on my
[01:58:06] birthday and uh at 90th at the we owned
[01:58:10] over five percent and recently went
[01:58:14] over for the first time to visit with
[01:58:16] him and move
[01:58:18] more than pleasantly surprised delighted
[01:58:21] with what we find there and now we own
[01:58:23] 7.4 percent of them we won't go over 9.9
[01:58:27] without their agreeing and we sold
[01:58:29] another
[01:58:31] 164 or whatever it is uh
[01:58:37] billion of us again would have done for
[01:58:40] us if we only had five billion dollars
[01:58:42] or something and it made 10 billion
[01:58:45] dollars
[01:58:46] simply in that way yeah we would look
[01:58:49] like Heroes now 10 billion just sort of
[01:58:52] disappears as it's
[01:58:53] an Old Dot in person's reports but it's
[01:58:56] fun and it is fun and it is 10 billion
[01:59:00] dollars and Charlie says it keeps and
[01:59:02] Charlie says it keeps me out of bars
[01:59:04] right talk show up about it and I
[01:59:07] probably talked to Charlie about this
[01:59:09] app the year after I started but who
[01:59:11] knows I mean I knew he'd like it I mean
[01:59:13] obviously and and
[01:59:15] uh we try to do every dollar we would do
[01:59:18] we could only do about 10 billion yeah
[01:59:21] yeah well not even that quite that much
[01:59:23] yeah but
[01:59:25] you know we are four or five billion
[01:59:27] ahead plus dividends and we got a carry
[01:59:29] that's terrific and and you know uh and
[01:59:34] they welcome us and they should welcome
[01:59:35] us and but we
[01:59:37] we love it the way they're operating
[01:59:38] we're not there to tell them what to do
[01:59:40] in the least uh uh so
[01:59:45] we didn't and but we did say we never go
[01:59:47] over 9.9 and we mean it and then they
[01:59:49] they know that will be true to our word
[01:59:52] and I went over there partly to
[01:59:54] introduce Greg the those people because
[01:59:57] we're going to be
[01:59:58] Willem 10 20 30 40 years from now and
[02:00:02] they may occasionally find something
[02:00:03] that we can do jointly and they look
[02:00:06] they look forward to doing that we look
[02:00:09] forward to it and in addition we have
[02:00:12] some other operating businesses in Japan
[02:00:14] so
[02:00:15] great gaming
[02:00:18] now the only thing I would add is that
[02:00:20] one has warned you when over there it
[02:00:23] was to build the build the trust with
[02:00:26] these Japanese companies because we do
[02:00:27] hope there's long-term opportunities but
[02:00:29] fundamentally as you highlighted uh
[02:00:32] they're an incredible uh they've been a
[02:00:34] very good investment I'd also highlight
[02:00:36] the five meetings we had were really
[02:00:39] quite remarkable I mean these companies
[02:00:41] the culture and the history around it
[02:00:43] and how proud they are you know there's
[02:00:45] just moments of learning from them so it
[02:00:46] was it was just a great experience to to
[02:00:49] spend really two days with the five
[02:00:50] companies
[02:00:52] and an issue that we intended to be 56
[02:00:55] billion of
[02:00:56] Yen that we were issuing and selling
[02:00:58] turned out to be
[02:00:59] 164.4 or something like that
[02:01:02] everything everything's worked so well
[02:01:04] and as Charlie says it
[02:01:07] you know it doesn't move 500 billion of
[02:01:10] net worth that much
[02:01:12] but this one is you know it will keep
[02:01:15] adding
[02:01:16] over the years to the berkshire's value
[02:01:19] with us
[02:01:20] very widespread probably four or five
[02:01:22] hundred million dollars a year and uh
[02:01:27] you know we'll just keep looking for
[02:01:29] more opportunities and
[02:01:32] Japan we have Berkshire is the largest
[02:01:37] borrower
[02:01:39] outside of corporate borrower outside of
[02:01:42] Japan that exists and yeah we didn't set
[02:01:46] out to be that but it's it's turned out
[02:01:49] that way and and we're not done I mean
[02:01:51] it uh you know in terms of
[02:01:54] what may come along there and uh
[02:01:58] and we have some direct operations there
[02:02:00] as I mentioned the
[02:02:03] uh
[02:02:04] and we've got some
[02:02:06] really wonderful Partners working for us
[02:02:09] and I don't have to do anything
[02:02:10] [Laughter]
[02:02:14] okay Becky
[02:02:16] the next question comes from Ellie Amin
[02:02:18] Tibet
[02:02:20] who asks during an episode of investing
[02:02:23] the Templeton way podcast Professor
[02:02:26] damodaran who he respects almost as much
[02:02:28] as Warren and Charlie mentioned that he
[02:02:31] is not comfortable with positions
[02:02:32] becoming a large part of his portfolio
[02:02:34] for example when they reach 25 to 35
[02:02:37] percent he mentioned that apple is now
[02:02:40] 35 percent of berkshire's portfolio and
[02:02:42] thinks that that is near a danger zone
[02:02:44] wonders if Warren and Charlie can
[02:02:46] comment I like to make one comment first
[02:02:49] but Charlie will come up with
[02:02:51] yeah but
[02:02:57] apple is not 35 percent of of Berkshire
[02:03:00] portfolio bursar's portfolio includes
[02:03:02] the railroad the energy business or
[02:03:05] animals you name it See's Candy they're
[02:03:08] all businesses and
[02:03:10] uh you know the the good thing about
[02:03:13] Apple
[02:03:14] is that we we can go up they buy in
[02:03:17] their stock and instead of owning 5.6
[02:03:19] percent
[02:03:20] you know they got down to
[02:03:22] I got about
[02:03:23] 15 billion 700 and some million shares
[02:03:27] outstanding they get down to 15 and a
[02:03:29] quarter billion without us doing
[02:03:30] anything we've got six percent so we
[02:03:33] can't own more than 100 of the NSF we
[02:03:36] can't own more than 100 of Garanimals or
[02:03:40] See's candy and
[02:03:43] it'd be nice we'd live alone 200 but it
[02:03:45] just isn't doable but they're all the
[02:03:47] same they're good businesses and to
[02:03:50] think that
[02:03:51] are Criterion
[02:03:53] a criteria for
[02:03:56] apple is different than the other
[02:03:58] businesses we own it just happens to be
[02:04:00] A Better Business than any we own and we
[02:04:05] put a fair amount of money in it but we
[02:04:07] haven't got more money in it than we've
[02:04:08] got in the railroad and apple is a
[02:04:10] Better Business our railroad is a very
[02:04:13] good business it's not remotely as good
[02:04:15] as Apple's business but uh Apple
[02:04:20] you know has a position with consumers
[02:04:23] where they're paying
[02:04:25] you know
[02:04:27] maybe they'll pay 1500 bucks or whatever
[02:04:29] it may be for a phone
[02:04:32] and these same people pay 35
[02:04:34] 000 for having a second car
[02:04:36] and if they had to give up a second car
[02:04:38] or give up their iPhone they'd give up
[02:04:40] their second car I mean it's an
[02:04:42] extraordinary probably we don't have
[02:04:44] anything like that that we own 100 of
[02:04:47] but we're very very very happy to have
[02:04:50] 5.6 or whatever it may be percent and
[02:04:53] we're delighted every tenth of a percent
[02:04:55] that goes up it's like adding a hundred
[02:04:57] million dollars to our earnings I mean
[02:04:59] our share of the earnings and they use
[02:05:01] their earnings to buy out
[02:05:02] our partners which
[02:05:04] we're glad to see them sell out too the
[02:05:06] index funds have to sell they bring the
[02:05:08] number of shares down and uh you know
[02:05:12] I'm good we went up slightly
[02:05:16] last year and
[02:05:17] I made a mistake a couple of years ago
[02:05:19] and I sold some shares when I had
[02:05:21] certain
[02:05:24] reasons why ah games were useful to take
[02:05:29] that year from a tax standpoint but
[02:05:32] having heard having heard me say that it
[02:05:34] was a dumb decision and
[02:05:39] uh
[02:05:41] Charlie you've already given your
[02:05:42] comment about it but but we do not have
[02:05:44] 35 percent
[02:05:45] of berkshire's portfolio berkshire's
[02:05:47] portfolio is the funds we have to work
[02:05:50] with
[02:05:51] and we want to own good businesses and
[02:05:53] we also want to have plenty of liquidity
[02:05:55] and beyond that
[02:05:57] you know
[02:05:58] the sky's the limiter or
[02:06:01] are mistakes who knows what the bottom
[02:06:03] is
[02:06:05] Charlie do you want to add anything to
[02:06:06] your earlier comment well
[02:06:10] I think
[02:06:12] one of the inane things is taught in
[02:06:15] modern University education
[02:06:18] is it a vast diversification is
[02:06:20] absolutely mandatory and investing in
[02:06:23] Common Stocks
[02:06:25] that is an insane idea
[02:06:27] it's not that easy to have a vast
[02:06:30] plethora of
[02:06:31] good opportunities that are easily
[02:06:33] identified and if you've only got three
[02:06:36] I'd rather read my best ideas instead of
[02:06:38] my worst
[02:06:40] and
[02:06:42] now some people can't tell their best
[02:06:45] ideas
[02:06:46] from their worst in in the act of
[02:06:48] deciding the investment already is good
[02:06:51] they they get the thing gets better than
[02:06:53] it is
[02:06:54] I think we make fewer mistakes like that
[02:06:57] than other people and that is a blessing
[02:07:00] to us
[02:07:01] it we're not so smart but we kind of
[02:07:04] know where the edge of our smartness is
[02:07:08] that is a very important part of
[02:07:11] practical intelligence and a lot of
[02:07:14] people who are geniuses on IQ tests
[02:07:16] think they're a lot smarter than they
[02:07:18] are and what they are is dangerous
[02:07:21] and
[02:07:22] and but but if you know the edge of your
[02:07:25] own ability pretty well
[02:07:27] you should ignore most of the Notions of
[02:07:30] our experts about
[02:07:32] what I call diversification of
[02:07:35] portfolios
[02:07:39] okay yeah
[02:07:46] station nine
[02:07:51] hi Charlotte hi Charlie and Warren thank
[02:07:53] you for this superb shareholder meeting
[02:07:56] celebration
[02:07:57] my name is David Chung from Hong Kong
[02:07:59] and a proud graduate of Chicago Booth
[02:08:03] I'm also here with my two sons Aiden and
[02:08:06] Ashen who's currently studying
[02:08:07] University of Chicago as a freshman and
[02:08:10] sophomore
[02:08:12] this is my second time attending the
[02:08:15] conference last being 2019 four years
[02:08:18] ago which I was only a guest shareholder
[02:08:22] of my friend Andrew so after the
[02:08:24] shareholder meeting I have decided to
[02:08:26] buy into Berkshire Hathaway which has
[02:08:29] given me a great return of 62 since
[02:08:33] 2019. so I want to thank you for that
[02:08:37] thank you
[02:08:40] I have also taken one of your advice to
[02:08:43] give my children a share for each of
[02:08:45] their birthdays
[02:08:47] although they won a Berkshire Hathaway
[02:08:49] eight years
[02:08:52] they will do just fine with pre-shares
[02:08:58] my question is
[02:09:00] how do you see the current U.S China
[02:09:03] internet companies valuation and the
[02:09:06] price disparity
[02:09:08] given there has been many uncertainties
[02:09:10] such as geopolitical tensions
[02:09:13] significant course optimizations with
[02:09:16] lean at U.S tech firms while China
[02:09:19] attack has been through all that already
[02:09:21] thank you
[02:09:24] Charlie I wanna
[02:09:26] well
[02:09:29] there's been some tension in the
[02:09:31] economic relationship of
[02:09:33] the United States and China I think that
[02:09:38] that tension has been wrongly created on
[02:09:42] both sides I think we're equally guilty
[02:09:45] of being stupid
[02:09:46] there's one thing we should do let's get
[02:09:48] along with China
[02:09:50] and we should have a lot of free trade
[02:09:52] with China
[02:09:53] in our mutual interest
[02:09:58] and
[02:09:59] I just can't imagine
[02:10:04] it's just so obvious there's so much
[02:10:07] safety and so much creativity that's
[02:10:09] possible
[02:10:10] think what Apple has
[02:10:13] done by engaging in a
[02:10:16] partnership with China as a big supplier
[02:10:20] yeah
[02:10:21] it's been good for apple and good for
[02:10:23] China that's the kind of business we'll
[02:10:26] be doing with China and more of it and
[02:10:29] with everything that increases the
[02:10:31] tension between the two companies is
[02:10:33] stupid stupid
[02:10:35] you know at least stopped on each side
[02:10:38] and each side ought to respond to the
[02:10:40] other side stupidity with reciprocal
[02:10:43] kindness that's my view
[02:10:45] and it creates one enormous problem of
[02:10:48] course which is that you have the two
[02:10:49] superpowers of the world
[02:10:51] and they know they have to
[02:10:53] get along with each other either one can
[02:10:56] destroy the other
[02:10:57] and they're going to be competitive with
[02:11:00] each other
[02:11:01] uh but part of it
[02:11:04] is trying always in the game like that
[02:11:07] is trying to judge
[02:11:09] how far you can push the other guy
[02:11:12] without them reacting wrong and uh
[02:11:16] you know if either side is a bullying
[02:11:19] some ways they can get away with it to
[02:11:21] an extent because the alternative
[02:11:23] is would drive them both into
[02:11:26] destruction
[02:11:27] but if they push it too far
[02:11:29] they increase the probability that
[02:11:31] something really does go wrong so it's a
[02:11:34] you know it's one of those Game Theory
[02:11:36] dilemmas
[02:11:37] but you really need
[02:11:41] the leader
[02:11:43] of
[02:11:44] both countries uh and you need the
[02:11:48] populace to understand at least the
[02:11:50] general
[02:11:52] situation in which these countries are
[02:11:55] going to operate over the next century
[02:11:57] and know that
[02:11:59] that some leader of the promises too
[02:12:02] much
[02:12:04] couldn't get you on a hell of a lot of
[02:12:05] trouble and that like you know that
[02:12:08] you've got one kind of a system that
[02:12:10] gets this leader one way they've got
[02:12:11] another system that gets his leader
[02:12:13] another way
[02:12:14] and
[02:12:16] keeping
[02:12:17] keeping either side from trying to play
[02:12:20] the game too hard
[02:12:22] uh and thinking the other side will
[02:12:25] will go along
[02:12:27] you know it's like playing chicken you
[02:12:30] know and driving toward a cliff so
[02:12:33] it is
[02:12:34] if you've got any diplomacy skills
[02:12:37] persuasive skills or anything like that
[02:12:39] you really want
[02:12:41] people that will
[02:12:43] convince
[02:12:45] the other country as well as his own or
[02:12:48] her own country
[02:12:49] that that
[02:12:51] this is what we're engaged in we've got
[02:12:53] to do it right we won't give away the
[02:12:56] story but we won't try and take the
[02:12:58] whole story either and it it we we're
[02:13:02] just at the beginning of this uh
[02:13:04] unfortunately and I mean we've we've
[02:13:07] learned what the situation was it used
[02:13:08] to be the Soviet
[02:13:11] mutually assured destruction
[02:13:14] was our policy
[02:13:16] then and
[02:13:18] that kept a lot of things from happening
[02:13:20] but it also came
[02:13:22] with a very very very close call
[02:13:25] uh with Cuba and
[02:13:28] these are not
[02:13:30] you know these are different games than
[02:13:32] existed hundreds of years ago you could
[02:13:35] you know Britain might rule the Caesar
[02:13:37] France or Spain but
[02:13:39] but now you're playing with a game that
[02:13:41] you can't really make
[02:13:43] a huge mistake in and I think that
[02:13:46] that
[02:13:48] should be the better that's understood
[02:13:50] in both countries
[02:13:52] the more the leaders feel that their
[02:13:54] citizenry does
[02:13:56] understand that
[02:13:58] the better off we'll be and that
[02:14:01] a lot of
[02:14:02] democr the the
[02:14:07] uh
[02:14:08] demography or the a lot of
[02:14:13] a lot of inflammatory speaking but a lot
[02:14:16] of authoritarian action I mean that it
[02:14:19] all carries its dangers and
[02:14:21] the world was
[02:14:23] stumbled through
[02:14:25] the years post 1945 with a lot of close
[02:14:28] calls
[02:14:29] from the
[02:14:31] in the nuclear Arena
[02:14:33] and now we've gotten
[02:14:35] pandemics and we've gotten
[02:14:37] we've got cyber and a whole bunch of
[02:14:39] other things so we've got more tools of
[02:14:42] Destruction
[02:14:43] the world's ever had
[02:14:45] and
[02:14:47] it it's imperative that
[02:14:50] China and the United States
[02:14:53] both understand what the game is and
[02:14:55] understand that you can't push too hard
[02:14:58] but working but both places are going to
[02:15:00] be competitive and both can prosper
[02:15:03] that's that's what really is
[02:15:05] that's that's the vision
[02:15:08] that is out there that
[02:15:11] China will have a more wonderful country
[02:15:13] the United States will have a more
[02:15:15] wonderful country and and and
[02:15:17] the two are not
[02:15:20] just compatible they're almost
[02:15:22] imperative
[02:15:23] uh in terms of
[02:15:25] uh what's going to happen in the next
[02:15:27] 100 years or so and uh
[02:15:31] uh
[02:15:32] I think that
[02:15:34] the leaders of both countries have got
[02:15:36] an important job and
[02:15:39] and having that
[02:15:40] understood
[02:15:42] and not to do inflammatory things
[02:15:46] and we'll see whether
[02:15:49] the lock that has taken us from 1945 to
[02:15:52] present holds out and and I think we can
[02:15:55] affect to some extent that luck
[02:15:59] and without sure a message we will move
[02:16:01] to Becky
[02:16:03] this question comes from Rohit bellany
[02:16:06] Berkshire bought a substantial position
[02:16:08] in Taiwan semiconductor and contrary to
[02:16:10] its normal holding timeline sold almost
[02:16:12] the entire position within a few short
[02:16:14] months while you cited in a CNBC
[02:16:17] interview that geopolitical issues were
[02:16:19] the Catalyst these issues were seemingly
[02:16:21] no different when you acquired that
[02:16:23] stock so what else if anything changed
[02:16:26] in those few months and prompted The
[02:16:28] Firm to offload close to five billion
[02:16:30] dollars worth of Taiwan semiconductor
[02:16:31] shares
[02:16:32] at Taiwan semiconductor is one of the
[02:16:34] best
[02:16:36] managed companies
[02:16:38] and important companies in the world
[02:16:41] and uh
[02:16:44] there is not
[02:16:46] and I think you'll be able to say the
[02:16:49] same thing 5 or 10 or 20 years from now
[02:16:52] I don't like its location and and uh
[02:16:55] reevaluated that I mean I don't think it
[02:16:58] should be any place but Taiwan although
[02:17:00] they will be obviously opening up
[02:17:03] chip capacity in this country and
[02:17:05] actually one of our subsidiaries that we
[02:17:07] got in Allegheny is is uh is
[02:17:10] participating in in in their Arizona
[02:17:14] uh construction activities but
[02:17:17] uh it's
[02:17:21] uh
[02:17:22] it uh
[02:17:27] it's a question of we would rather have
[02:17:30] the same
[02:17:31] yeah kind of company and they're there's
[02:17:34] nobody in the chip company there's no in
[02:17:37] the chip industry that's in their league
[02:17:39] in our bit at least in my view uh
[02:17:43] and the man that was a 91 year old or so
[02:17:46] that
[02:17:47] connected with us and that I think I
[02:17:51] played Bridge with and and uh in
[02:17:54] Albuquerque and The Marvelous people
[02:17:57] marvelous company but
[02:18:00] I'd rather find a
[02:18:02] marvelous people I won't find it in the
[02:18:04] chip industry but marvelous people and
[02:18:06] marvelous
[02:18:07] uh competitive position and everything
[02:18:09] I'd rather find it in the United States
[02:18:11] I feel
[02:18:13] better about the capital that we've got
[02:18:16] deployed
[02:18:18] in Japan than in Taiwan it uh
[02:18:22] I wish it weren't so but I think that's
[02:18:24] the reality and I've reevaluated that uh
[02:18:27] in the light of certain things that were
[02:18:29] going on try well my view is that we're
[02:18:32] in ought to feel comfortable if he wants
[02:18:34] to
[02:18:37] yeah put that in the minutes
[02:18:41] okay station 10.
[02:18:47] first of all thank you for making our
[02:18:50] lives better
[02:18:51] my name is bogumil Baranowski I'm a
[02:18:54] founding partner of
[02:18:56] New York
[02:18:57] we manage multi-generational family
[02:19:00] fortunes hence my question
[02:19:02] Mr Buffett in 1976 in your tribute to
[02:19:07] Benjamin Graham you wrote Walter lippman
[02:19:10] spoke of men who plant trees that other
[02:19:13] men will sit under
[02:19:15] Ben Graham was such a man
[02:19:18] you're both such people
[02:19:20] could you share with us your 100 Year
[02:19:22] vision for Berkshire it's a question to
[02:19:25] you both
[02:19:27] yeah I would like to add one thing about
[02:19:29] Ben Graham uh
[02:19:32] Ben Graham didn't
[02:19:35] all kinds of things
[02:19:37] for me and I never expected one thing in
[02:19:40] return I may just you name it and he did
[02:19:43] it and and there wasn't any hidden you
[02:19:47] know there's a hint I should say of of
[02:19:50] anything he expected in return and uh
[02:19:55] I I checked
[02:19:57] uh well he wrote a book in 1949
[02:20:02] that in a sense said to me in very
[02:20:05] persuasive terms
[02:20:07] that what I'd been
[02:20:09] spending
[02:20:11] on the previous
[02:20:13] eight or nine years
[02:20:16] working at and loving was all wrong
[02:20:19] and
[02:20:21] that book
[02:20:23] has been I check it every now and then
[02:20:26] on Amazon to where it ranks and you know
[02:20:29] Amazon ranks
[02:20:31] hundreds and hundreds and hundreds of
[02:20:33] thousands of books uh
[02:20:35] by sales
[02:20:37] and
[02:20:39] Ben Graham's book
[02:20:40] has been up there like number 300 or 350
[02:20:43] or something like that forever and there
[02:20:46] isn't
[02:20:47] there isn't any book I got I wrote
[02:20:49] harpercollins and note the other day
[02:20:51] because they're bringing out another
[02:20:53] Edition
[02:20:54] and I asked them how many copies have
[02:20:56] been sold and they said the records
[02:20:57] didn't go back
[02:20:59] far enough but they they had 7.3 million
[02:21:05] copies of this little book
[02:21:07] that changed my life
[02:21:09] and uh uh
[02:21:12] continues
[02:21:13] to outsell every investment book
[02:21:15] investment will come along and you know
[02:21:18] their number
[02:21:19] 400 or a thousand or something for a
[02:21:22] while and then all of a sudden they're
[02:21:23] numbered 25
[02:21:24] 000 or 200 000 and and this this book
[02:21:29] you know
[02:21:30] in how many areas
[02:21:33] can you find any book
[02:21:36] that has had that sustained position you
[02:21:38] can't you go back and look at number one
[02:21:40] in 1950 or number two or number three
[02:21:42] and you're looking in 51 and 52 they
[02:21:45] don't continue I mean they just don't
[02:21:47] continue uh
[02:21:49] cookbooks maybe one or two of them last
[02:21:51] for a while but there is nothing and
[02:21:55] this book lives on and everybody keeps
[02:21:57] bringing out new books and saying a lot
[02:22:00] of other things but they aren't saying
[02:22:02] anything it's as important as what he
[02:22:04] said in 1949 in this relatively thin
[02:22:07] little book so uh
[02:22:11] our vision
[02:22:12] for Berkshire
[02:22:14] is exactly what we said today we we
[02:22:16] wanted to be a company
[02:22:18] that
[02:22:20] is owned by shareholders and behaves in
[02:22:23] a way
[02:22:24] Society is happy that it exists and not
[02:22:27] unhappy
[02:22:28] and we
[02:22:31] will have unlimited capital
[02:22:33] we'll get lots of talent
[02:22:35] and we've got a base
[02:22:38] that can't be beat and there's no reason
[02:22:42] why it can't be perpetuated just like
[02:22:44] Ben's book and maybe be an example to
[02:22:47] other people and and if so we'll be very
[02:22:51] happy Charlie
[02:22:54] yeah one of the really interesting
[02:22:56] things about vinegar he was a really
[02:22:58] gifted teacher
[02:23:00] a very honorable profession
[02:23:03] and
[02:23:05] that is what has lasted however
[02:23:09] an interesting fact that he was sheepish
[02:23:11] about in his old age was
[02:23:13] that more than half of all the
[02:23:16] investment returned that Benny Graham
[02:23:17] made in his whole life came from one
[02:23:20] stock one growth stock Geico
[02:23:24] Birches subsidiary
[02:23:26] and
[02:23:28] he at the time he operated there were a
[02:23:32] lot of sort of lousy companies that were
[02:23:34] too cheap and you can make a little
[02:23:36] money floating from one to another
[02:23:39] but the big money he made was one growth
[02:23:42] stock buying one undervalued great
[02:23:45] company
[02:23:46] uh is a very good thing as Berkshire is
[02:23:49] found out again and again and again
[02:23:52] and and Ben wrote a post trip to the 49
[02:23:56] Edition pointing out exactly
[02:24:00] that fact and acknowledging it but said
[02:24:03] but also took the some good lessons from
[02:24:05] it you know he said that's the way life
[02:24:07] is that that you prepare and you
[02:24:11] you know you don't lose everything along
[02:24:14] the way and then something comes along
[02:24:16] and Geico came along because
[02:24:19] a banker in Fort Worth at a financial
[02:24:22] Leo Davidson uh
[02:24:25] and I think the banker got three
[02:24:27] quarters of it and I don't mean Leo
[02:24:29] Davis and Leo Goodwin uh who founded
[02:24:31] Geico then called government employees
[02:24:34] insurance company and you can figure out
[02:24:36] the acronym and uh
[02:24:40] the deal almost fell apart the deal was
[02:24:43] as I remember from maybe a million and a
[02:24:45] half or something like a million and a
[02:24:47] quarter and it almost fell apart because
[02:24:49] of a difference of twenty five thousand
[02:24:52] dollars
[02:24:54] in the net worth delivered this is a
[02:24:55] business's
[02:24:57] you know we're tens of billions I mean
[02:24:59] but he pointed out the irony in that too
[02:25:02] I mean he was honest about it was
[02:25:05] totally intellectually honest on about
[02:25:07] us about his
[02:25:10] the failings and but also the strengths
[02:25:13] of his approach and he and that to some
[02:25:17] extent you know Charlie and I have seen
[02:25:19] that in our lives I mean the sort of the
[02:25:22] prepared mind the willingness to
[02:25:24] to act when you need to act and the
[02:25:28] willingness to ignore it every salesman
[02:25:29] in the world and and the imperative norm
[02:25:32] and uh
[02:25:36] is one or two things that make the right
[02:25:37] decision if you make the right decision
[02:25:39] on a spouse I mean you've won the game
[02:25:43] they you know and there's enormous
[02:25:46] important decision and you got all the
[02:25:49] time I mean in the world we got more
[02:25:51] time now than used to have when I was a
[02:25:53] kid to make that decision and and uh
[02:25:57] you know
[02:26:00] I don't know whether a third or
[02:26:02] whatever percentage blow that one you
[02:26:05] know it it is it is really interesting
[02:26:07] the thing to do is just
[02:26:10] keep trying to
[02:26:12] trying to think things through not do
[02:26:15] too many stupid things and
[02:26:16] and sooner or later you have a lot of
[02:26:18] Polo so Charlotte would say
[02:26:22] okay Becky
[02:26:24] all right this question comes from
[02:26:26] terrafter a shareholder in Sierra Vista
[02:26:29] Arizona who is asking a question of Ajit
[02:26:32] wants to know about electric vehicles
[02:26:35] getting insurance from the manufacturer
[02:26:37] instead of car insurance companies a
[02:26:40] recent article in the Wall Street
[02:26:41] Journal shows that though EVS are a
[02:26:43] small but growing percentage of sales
[02:26:45] Tesla and GM are offering their own
[02:26:47] Electric Vehicle Insurance what will
[02:26:49] Geico do to combat this
[02:26:53] yeah so Geico is talking to a number of
[02:26:56] original equipment manufacturers as well
[02:26:58] to try and see how best they can work
[02:27:01] with the auto manufacturer and offer
[02:27:04] insurance at the point of sale
[02:27:05] they haven't been very many success
[02:27:08] stories as yet
[02:27:10] so we'll wait and see you know clearly
[02:27:14] it is a very convenient way to sell auto
[02:27:17] insurance at the point of sale
[02:27:19] but there's a there's a fair amount of
[02:27:22] data that needs to be collected on the
[02:27:23] driver not just the car and that makes
[02:27:26] it a little more complicated so we are
[02:27:29] talking to some auto manufacturers
[02:27:31] ourselves we are hopeful to that we will
[02:27:34] strike a deal with some of them before
[02:27:36] not too long
[02:27:38] Tesla has made NGM they both have talked
[02:27:42] a lot in the press in terms of getting
[02:27:44] into their insurance business and in
[02:27:46] fact GM I think has projected they'll
[02:27:49] write three billion dollars a premium
[02:27:50] which you know it's hard to imagine
[02:27:52] where it'll come from but they're all
[02:27:55] hot to trot I think somebody will find
[02:27:58] the secret sauce before not too long and
[02:28:01] we ourselves are in that race
[02:28:03] yeah I would I would point out that
[02:28:06] General Motors Motors insurance
[02:28:09] for decades and I mean this is not a new
[02:28:12] idea and uh
[02:28:18] Uber
[02:28:21] or a lot of insurance for a while they
[02:28:22] laid it off with somebody and that
[02:28:24] company got killed by it but I and I
[02:28:26] don't know the deal between Uber and
[02:28:28] forget the name of the company that took
[02:28:29] it on the Jeep would probably know but
[02:28:31] yeah James River yeah and
[02:28:34] you know it
[02:28:37] there's there's nothing it is not it's
[02:28:40] not a new idea it's not magic in the
[02:28:42] lease I mean it is hard
[02:28:45] to come up with something that is better
[02:28:48] at missing Max in matching risk to
[02:28:52] reward
[02:28:54] I'm sorry risk to price then then uh a
[02:29:00] bunch of very smart people are doing at
[02:29:01] a progressive and a bunch of very smart
[02:29:03] people are doing it uh to a greater
[02:29:05] extent at Geico and I mean it it is
[02:29:09] it's just it was fascinating to me when
[02:29:12] Uber wanted to do it you know and they
[02:29:15] were going to get their head handed to
[02:29:16] them but they laid off a good bit of it
[02:29:19] and very very substantial percentage of
[02:29:22] it was somebody else who got their head
[02:29:23] out in this way and uh you know and but
[02:29:26] it was a story you know Wall Street
[02:29:29] loves it and uh uh I with
[02:29:33] we've got 80 car dealerships that do a
[02:29:37] lot of business uh and
[02:29:40] you know we've got the people buying the
[02:29:43] car and the place and and
[02:29:45] we form an insurance company around the
[02:29:48] group for some reason that rights
[02:29:50] Insurance you know it it's hard to
[02:29:54] improve on the president's system and
[02:29:56] yeah I I have no it wouldn't I wouldn't
[02:29:59] pay a penny I'd pay to avoid it actually
[02:30:02] I mean uh and go ahead yeah the only
[02:30:06] point I'd like to add is the virgins on
[02:30:08] writing auto insurance are four percent
[02:30:10] which is a very small number and once
[02:30:13] there are more people that are trying to
[02:30:15] take a bite of the Apple it just becomes
[02:30:17] very very difficult to keep all the
[02:30:19] mouths fed in a profitable manner
[02:30:25] yeah you can say the there was one big
[02:30:27] new idea in insurance and property and
[02:30:31] car insurance back in 1920 or so when
[02:30:33] State Farm started and State Farm
[02:30:36] uh
[02:30:38] and still has it next to Berkshire it's
[02:30:41] it's our it's the leader in having net
[02:30:44] worth it's a mutual company but some guy
[02:30:46] just figured that there was a cartel
[02:30:48] running
[02:30:49] car insurance and
[02:30:51] P Farmer for murder is the name of the
[02:30:55] book I think in over in Illinois and he
[02:30:58] created a system where he really took 20
[02:31:00] points or so
[02:31:01] out of the cost and surprise surprise
[02:31:05] areas you know
[02:31:07] and nobody's own stock in State Farm
[02:31:10] it's it's it's an insult to capitalism
[02:31:12] actually everything you learn at the
[02:31:14] business school says it shouldn't work
[02:31:16] because nobody owns it nobody's going
[02:31:18] public with it no nothing but it's got
[02:31:21] more net worth it's almost probably
[02:31:23] double leaving Berkshire out of the
[02:31:25] picture it's probably double the next
[02:31:26] guy and and nobody's really improved on
[02:31:29] their system that much uh so it's
[02:31:33] fascinating how
[02:31:35] people don't really look at the essence
[02:31:38] you know you
[02:31:40] these are cases that that should carry a
[02:31:43] message
[02:31:45] but the truth is in Wall Street anything
[02:31:47] can get the test is whether you can sell
[02:31:49] it or not but if if you can sell it
[02:31:51] it'll get sold and a bunch of insurance
[02:31:54] companies came along got a sold and this
[02:31:56] is this can be a story about this stock
[02:31:58] or that stock and it sounds a good one
[02:32:01] they talked about it at Uber for a while
[02:32:02] and it is it is really interesting the
[02:32:06] investing public does not learn much
[02:32:10] okay station 11.
[02:32:15] hi my name is Jeff Miriam I'm from Edina
[02:32:18] Minnesota we've been coming for years
[02:32:21] to make that Professor from the earlier
[02:32:23] question really nervous half our
[02:32:25] family's wealth is in Berkshire Hathaway
[02:32:29] well let's make Charlie nervous
[02:32:32] that question has to do
[02:32:34] control in the miniature there was a
[02:32:36] question earlier about corporate Raider
[02:32:38] I was more wondering about
[02:32:40] who is actually going to own the voting
[02:32:42] control is it going to be institutions
[02:32:46] Calpers BlackRock are they eventually
[02:32:49] going to get their way with the ESG
[02:32:54] check boxes that we're gonna have to
[02:32:55] check and what should we be thinking
[02:32:57] about that well you're thinking very
[02:32:59] well and uh
[02:33:02] the interesting thing is uh the big
[02:33:05] aggregations look like of course they'd
[02:33:08] be in index funds but
[02:33:11] what indirect funds want is they want a
[02:33:13] world in which
[02:33:15] Society
[02:33:16] doesn't get upset with them about the
[02:33:19] fact they've got all the voting power
[02:33:20] and and I was in the last year or two
[02:33:24] uh
[02:33:25] it's looked like a better idea
[02:33:27] for them not quite togethers uh uh
[02:33:33] What was a
[02:33:35] phrase that Charlie use
[02:33:37] but he backed off a lot yeah they backed
[02:33:40] off a lot and and it's it's in their
[02:33:43] interest to back out off an interesting
[02:33:45] interestingly enough
[02:33:48] and looking at money management
[02:33:51] you know the game
[02:33:53] is not performance it's assets under
[02:33:56] management and index funds produce a
[02:33:59] tiny tiny tiny
[02:34:01] uh fee on assets under management
[02:34:04] because it was pioneered by Vanguard and
[02:34:07] uh and it's
[02:34:10] when it became successful it was very
[02:34:12] easy to replicate not so easy but I mean
[02:34:14] it was inevitable to be
[02:34:16] uh copied
[02:34:18] but it came with a management fee of two
[02:34:21] basis points so what people that have
[02:34:25] offered index funds would really like is
[02:34:28] you to buy their other funds
[02:34:30] or level management money in some other
[02:34:33] way
[02:34:34] so that they get a higher
[02:34:36] higher fee on assets under management
[02:34:38] which of course is exactly why the index
[02:34:42] fund was embedded in the first place but
[02:34:43] so it's gotten it's not a loss leader
[02:34:48] but it is a way to pull money in and
[02:34:51] then you hope that people ignore what
[02:34:53] was said by
[02:34:55] by
[02:34:56] what's the name of you know the John
[02:34:58] Bogle Jack Vogel ignore him and
[02:35:02] essentially they give up the I say idea
[02:35:05] that will offer you a fund that does
[02:35:06] this in the Indian will offer you
[02:35:08] another fund that does that and of
[02:35:09] course those management fees are higher
[02:35:11] so they're really counter selling the
[02:35:13] idea that John Bogle came along with but
[02:35:16] in the process they have achieved a lot
[02:35:19] of bolts add
[02:35:22] that was fun for a while but the last
[02:35:24] thing in the world I wanted to do is at
[02:35:27] Washington or the American public decide
[02:35:29] that they're throwing around their
[02:35:31] weight too much so they're tending to
[02:35:33] back off now if you figure out where
[02:35:35] their self-interest is you can judge
[02:35:37] where their behavior is going to go
[02:35:41] Charlie yeah
[02:35:43] you're one of the defend them no you can
[02:35:45] square me what you just said
[02:35:47] you're totally right on everything
[02:35:51] well in that case I won't ask anybody
[02:35:53] else okay Becky
[02:35:58] all right this question comes from almu
[02:36:00] Grinnell
[02:36:02] and it's about
[02:36:05] this is for Warren and Greg since 2019
[02:36:08] Berkshire repurchased huge amounts of
[02:36:10] stock about approximately reducing 10
[02:36:12] percent of the share count and
[02:36:13] increasing the intrinsic value per share
[02:36:15] for the continuing shareholders Greg is
[02:36:18] expected to be the successor of Warren
[02:36:20] as CEO so will he be in charge of the
[02:36:23] main capital allocation decisions
[02:36:24] including future share BuyBacks Greg has
[02:36:27] been key in the development of Berkshire
[02:36:29] Hathaway energy and I think a good
[02:36:30] Capital allocator does he has he been
[02:36:33] involved in the share repurchases that
[02:36:35] have been executed over the past years
[02:36:37] and do you both Warren and Greg work
[02:36:40] together in the estimation of
[02:36:41] berkshire's intrinsic value and the
[02:36:43] share buyback decisions
[02:36:45] well then the answer is that Greg I'm
[02:36:48] going to turn it over to him but the
[02:36:49] answer is Greg understands Capital
[02:36:51] allocation as well as I do and that's
[02:36:54] lucky for us and
[02:36:56] he will make those decisions I think
[02:36:59] very much in the same framework as I
[02:37:01] would make them and we've laid out that
[02:37:03] framework now for 30 years probably or
[02:37:06] something like that people make it way
[02:37:08] more complicated I mean particularly if
[02:37:10] you're working on a doctorate or
[02:37:11] something it's just a great subject to
[02:37:13] have lots of footnotes and you know 50
[02:37:15] pages or 100 pages but it is it's no
[02:37:18] more some it's no more complicated than
[02:37:20] if you and I and Charlie had a business
[02:37:22] and you want to sell
[02:37:25] yours your interest in we could buy it
[02:37:27] for less than we thought it was worth
[02:37:29] and and without misleading you in any
[02:37:32] way about what was going on and we'd buy
[02:37:35] it then but Greg you're on because
[02:37:37] you're going to be doing in the future
[02:37:38] right uh
[02:37:41] yeah well I think Warren you said it
[02:37:43] really well I mean the framework's been
[02:37:44] laid out we know how you approach it and
[02:37:47] with the and and how you and Charlie
[02:37:50] have approached it and and really don't
[02:37:51] see that framework changing when the
[02:37:54] opportunity presents itself we'll want
[02:37:56] to be a an active repurchaser of
[02:37:58] Berkshire shares we think it's a it's a
[02:38:01] great outcome for Berkshire shareholders
[02:38:03] to own a a larger piece of each of our
[02:38:05] operating businesses and our and the uh
[02:38:08] portfolio of the equity companies when
[02:38:10] the when the opportunity presents itself
[02:38:12] it can be the dumbest thing you can do
[02:38:14] it or can be the smartest thing you can
[02:38:16] do and
[02:38:19] to make it more complicated than that
[02:38:21] and start getting into all this but you
[02:38:24] obviously do what the business needs to
[02:38:26] do first then the opportunities are
[02:38:29] there grow your present business buy
[02:38:31] additional business whatever it may be
[02:38:32] and then then you make a decision on
[02:38:36] dividends but that decision becomes
[02:38:37] pretty irrevocable because you don't cut
[02:38:39] dividends and without
[02:38:41] having them major effects
[02:38:44] and your shareholder base and a lot of
[02:38:46] things and uh and then if you've got
[02:38:51] ample capital and you don't see that
[02:38:52] you're going to use it all and your
[02:38:54] stock
[02:38:55] is attractive and it enhances the
[02:38:58] intrinsic value for the remaining
[02:39:00] shareholders it's an old-brainer and if
[02:39:02] it's if it's above the price of
[02:39:04] intrinsic value it's a no-brainer that
[02:39:05] you don't even listen to anybody no
[02:39:07] matter what investment banker comes in
[02:39:09] and tells you here's how to do a
[02:39:10] repurchase program
[02:39:12] okay
[02:39:14] station one
[02:39:19] I'm Tom Nelson a podcast here from North
[02:39:22] Oaks Minnesota
[02:39:24] Charlie in 2022 you used phrases like
[02:39:29] really massively stupid massive kind of
[02:39:33] ignorance and crazy to describe what you
[02:39:37] said was the 30 of Americans hesitant to
[02:39:41] submit themselves to untested mRNA covid
[02:39:45] gene therapy do you stand behind those
[02:39:48] quotes today
[02:39:49] yeah sure
[02:40:00] well we got time for one more than
[02:40:01] before lunch
[02:40:05] Becky
[02:40:06] okay that
[02:40:09] I thought I was out but let's see uh
[02:40:15] how about
[02:40:16] oh uh
[02:40:21] could be how about lunch pretty soon but
[02:40:23] no no okay let's just got one for you
[02:40:25] this one comes from Drew Estes
[02:40:28] um
[02:40:29] this is a question for Warren in your
[02:40:31] 1969 letter to Partners you said in any
[02:40:33] company where the founder and chief
[02:40:35] driving force behind the Enterprise is
[02:40:37] still active it's still very difficult
[02:40:39] to evaluate second men the only real way
[02:40:42] to see how someone is going to do when
[02:40:43] when running a company is to let them
[02:40:46] run it this wise statement now applies
[02:40:48] to Berkshire once the second men are
[02:40:50] running Berkshire what would you advise
[02:40:52] owners of Berkshire to watch for
[02:40:54] specifically what actions if taken
[02:40:56] should give us concern well I think I
[02:40:58] would just I would have some comfort in
[02:41:00] the fact that 99 of my net worth is in
[02:41:03] that company so I I probably got a
[02:41:05] stronger interest in it and and perhaps
[02:41:08] 100 billion or more of philanthropy will
[02:41:10] be affected by and and uh but
[02:41:15] I would say that I don't have a
[02:41:18] second choice I mean it is it is that
[02:41:22] tough
[02:41:23] Divine but I've also seen
[02:41:25] Greg in action that I feel 100 percent
[02:41:29] comfortable and uh uh
[02:41:34] and like I say I don't know something
[02:41:36] happened to Greg I would tell the
[02:41:38] directors you know they have a problem
[02:41:40] and they won't
[02:41:42] I don't have anybody to name and if they
[02:41:44] put somebody in
[02:41:46] Bergeron automatic pilot
[02:41:49] couldn't work extremely well
[02:41:51] for a long time I mean it doesn't it
[02:41:53] doesn't like the businesses go away or
[02:41:55] any other thing sort uh
[02:41:58] and you can't
[02:42:00] it's hard to judge
[02:42:03] successor management
[02:42:05] in a really good business because if
[02:42:08] they if they don't show up at the office
[02:42:09] it'll keep working for a long time and
[02:42:12] maybe
[02:42:13] maybe that
[02:42:15] like event useful input
[02:42:18] may show itself in five years it may go
[02:42:22] a long long long
[02:42:24] time and uh
[02:42:29] how how are the shareholders
[02:42:31] you know advised by a bunch of
[02:42:34] people that are concerned about whether
[02:42:36] you're meeting earnings projections or
[02:42:38] something telling them whether the
[02:42:40] Management's any good thing you know it
[02:42:43] is very very hard it's very hard I've
[02:42:45] been on the board of
[02:42:46] 20 companies is very hard to
[02:42:49] ask me to rank the management of each
[02:42:51] one it's uh it's it's very difficult to
[02:42:55] do because some are just better
[02:42:57] businesses than others some would be
[02:42:58] better off not managed hardly at all
[02:43:00] others really need help but they got a
[02:43:03] lousy business
[02:43:04] and uh
[02:43:06] Tom Murphy told me a long long time ago
[02:43:09] is it the secret of business is to buy a
[02:43:11] good business and it's okay to inherit
[02:43:13] one too and Greg is inheriting a good
[02:43:17] business and I think he'll make it
[02:43:19] better but I don't think it's easy
[02:43:22] to put any one of the next 10 nominees
[02:43:24] in and try and judge three years later
[02:43:26] whether they've done a good job or not
[02:43:28] so it's going to be the that'll be a
[02:43:31] very interesting job for the board
[02:43:33] but it shouldn't listen to Wall Street
[02:43:34] on it it they've got the job if they put
[02:43:38] somebody in there's a surprise we both
[02:43:41] go down on a plane that put somebody in
[02:43:43] they've got a real job in assessing that
[02:43:45] person because it'll depend on how good
[02:43:48] he or she is as a talker it'll depend on
[02:43:50] you know them courting Wall Street to be
[02:43:53] supportive of all kinds of things and
[02:43:55] and uh uh we've got some very good
[02:43:59] people on the board but they would be
[02:44:01] challenged in that position as would I
[02:44:05] where I've been in that position and
[02:44:07] other companies were
[02:44:09] a very great leader
[02:44:11] has left and uh
[02:44:13] on the way back from the funeral you
[02:44:15] know nobody knows what to do exactly
[02:44:17] so with that cheery message we will go
[02:44:19] to lunch
[02:44:20] and we will come back
[02:44:24] [Applause]
[02:44:29] we'll see you at one o'clock thank you
[02:44:31] and and we're still going to try and get
[02:44:34] 60 Questions in we've done 25 so far
[02:44:37] 20 yeah 25.
[02:44:40] so keep the question short and I'll try
[02:44:41] and keep the answer short thanks
[02:44:43] [Music]