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cute homecoming hairstyles long hair
good morning it certainly got quiet quickly. that surprised me. can you hear me are you they're back well for business school you know itdoesn't get much better than this having the world's greatest investorcome to our campus is quite bored office german berkshire hathaway holdingcompany's investments range from backup insurance american express coca-cola portionsjewelry stories whole town
braska mr. baumann has been described asgod value investors michael jordan ofinvesting game he began his first investmentpartnership mid-nineteen fifties with 100 hours of his own money a few years later he began investingstruggling massachusetts textile mill called berkshire hathaway through birthanniversary started putting capital into other businesses seeking insurance whichgenerate cash streams for more investments which have done very wellindeed as well share prices about eighteen dollars in1965 berkshire today traits around sixty
nine thousand one hundred dollars ashare over time the company's annualizedperformances more than double that of the s&p 500 and berkshire today is worthmore than 100 billion dollars but mr. buffett is known as much for hisunpretentious style at as far as lofty success he has become a champion of investors islegendary for his aversion to corporate double speak is rare among ceos and thathe cheerfully admits his mistakes three years ago he wrote in his annualreport that butcher would have done better if you'd simply gone to themovies are great work very many years
like that since nineteen sixty-fivebelieve me berkshire was proudly even the finallyabsent from the dot , stereo the last few years and now that the bubble hasburst as we all know it's warren buffett is having the last laugh his most recent letter to shareholdershe wrote quote we have embraced the 21st century by entering such cutting-edgeindustries as brick carpet installation and paint try to control your excitement my buddy you know i am personally from readinghis letters
it's just a joy it's it's it's a it's abusiness lesson in itself i encourage it whenever you get an opportunity to takeone side and and read it carefully you'll learn a tremendous amount hiswisdom and insights or so value that some investors buy a share purchasestock just so they can hear him his legendary annual meeting or as he callsit woodstock for capitalists he doesn'tmake speaking of periods as often and we are extremely fortunate to have him withus today earl entered of coca-cola and ourdistinguished executive-in-residence had a lot to do with a thorough and we'redeeply indebted to you for helping to
raise us thank you very much our format today will be primarilyquestions and answers mr. buffett will make some brief remarks at the beginningand then we'll move into your face we will have a microphone setup overhere we would like you to come around we were videotaping we'd like it use amicrophone play so go ahead and begin to line up over there to ask your questions so would you please give a very warmwelcome to the oracle of omaha warrant yeah good night
testing 1 million two million three okay i i came from nebraska today and thatyou're probably all familiar with us mainly by our football team we havethose fellows with the the bingo white helmets with those red hands on i asked one of our starters the otherday what's the end stand when he said knowledge ok we can make a ton of though i meanthat you know coaster nebraska just because you're a football playerwith that they made your in agricultural economics and there's a to questionfinal for all of the fires and first
question is what are all mcdonald haveand they were giving that to one of ourpotential heisman trophy winners the other day and he started this sweptfinally right now is a farm pressure in the light of course you don't want tofind a heisman candidate uh so i said now he said you're halfway home he said just one more question how doyou spell far i think i really starts to sweat and helooks at the ceiling and he looks around five his face by itself he says he i all so much for that guysure it will be done right now
i look i really want to talk about whatside your mind so we're going to do a q&a and the men and i i there's a couplequestions i always get asked you know i always did always say well we should igo to work for when i get out then i've got a very simple answer we we mayelaborate more on this as we go along but another the real thing to do is toget going in first some institution or individual that youadmire i mean it's crazy to take in betweenjobs just because they look good on your resume or because you get a littlehigher starting pay i was up at harvard while back and very nice young guys pickme up at the airport
harvard business school attending and hesaid look he said i went to undergrad here and then i worked for x and y and zand now i've come here and he said i thought it would really round up myresume perfectly if i want to work now for a big management consulting firm andi said what is that what you want to do he said nobody said that's the perfectresume and i said well what are you going to start doing what you like andhe said well i'll get to that someday and i said well you know i said yourplan sounds to me a lot like saving up sex for your old age it just doesn't make a lot of sex
head i told that same girl i said you'renot going to work for every admire the most and i said you can't get a badresult of jump out of bed in the morning and you'll be having fun being called meup a couple weeks later said what you tell us gets he said they're allbecoming self-employed so you've got you've got a temper that advice a littlebit ah play one game a little bit with mefor just a minute and then roll up that will get to your questions and i'd likefor the moment to have you a lot that heavy pretend i made you a great offerand i've told you that you could pick any one of your classmates in you nowknow each other
probably pretty well after being herefor a while you can thank you have 24 hours to think it over and you can pickany one of your classmates and you get ten percent of their earnings for therest of their lives and i ask you what goes through your mind in determiningwhich one of those who would pick you can pick the one with the richest fatherthat doesn't count on me you gotta gotta do this on merit but you probablywouldn't pick the person against the highest grades in the class i mean that at all we're getting isgrades in the class but that that's not that isn't going to be the quality thatbut that sets apart a big winner from
the rest of the pack think about who we would pick and whyand i think you'll find when you get through you'll pick some individual you've allgot the ability you wouldn't be here otherwise you've all got the energy i mean you've got it out here did theinitiative is here the intelligence is here throughout theclass but some of your going to be bigger winners and others had it getsdown to a bunch of qualities that interestingly enough you are our selfmade
i mean it's not how tall you are notwilling to kick a football 60 yards is not whether you could run thehundred-yard dash ten seconds it's that whether thebest-looking person in the room it's a whole bunch of qualities thatreally come out of ben franklin or the boy scout colder so whatever it may be imean it'sit's its integrity is honesty it's its generosity it's it's beingwilling to do more than your share its it's just all those qualities that areself selected and then if you look on the other side of the ledger becausethere's always a catch to these you know free gifts in june a joke so you'll alsohave to this is the fun part
you also have to sell short one of yourclassmates and pay ten percent of what they do so what do you think is going to do theworst in the class is a great more fun and think about it again and again itwasn't the plan but it isn't the person with the lowest grades or anything ofthe sort it's the person who just doesn't shapeup in the character department when we look for three things when we hirepeople we look for intelligence we look friend for initiative or energy and welook for integrity and if they don't have the ladder
the first tool kill you because ifyou're going to get somebody without integrity you want to be lazy and down i mean you don't want to get a lot ofsmart and energetic self is that third quality and but everything about thatquality is your choice you know you you can't change the wayyou are wired much but you can change a lot of what you do with that wiring andit's the habits that you generate now on those qualities or those negativequalities i mean the person the person who always you know claimed credit forthings they didn't do that always cuts corners that the can't count on gettingit in the end
those those are habit patterns and thetime to form the right habits is one year when you're your age i mean it duh it doesn't do me much good to get golflessons now if i got the golf lessons when i was your age i might be a decentoffer but but it someone once said the chains of habit ortwo are too light to be felt until they're too heavy to be broken and i seethat all the time i see people with have a patterns that her self destructive when they're 50 or60 and they think they really can't change their imprisoned by that butyou're not in prison by anything so when
you write down the qualities of thatperson that you'd like to buy to ten percent of look at that list and askyourself is there anything on that list i couldn't do the answers there are there won't be and when youlook at the person yourself short and you look at those qualities that youdon't like if you see any of those in yourself he could tell them whatever maybeselfishness you can get rid of that i mean that is not ordained and if youfollow that you and ben franklin did this in my old boss ben graham did thisof early ages in their young teens they
just been grand looked around and hesaid who i admire you know and you want to be admired himself and he said youknow why do i buy these other people and he said if i admire them for thesereasons maybe other people will admire me if i behave in a similar manner anyand he decided what kind of a person who wanted to be and if you follow that atthe end you'll be the person you love my ten percent of i mean that's the goal inthe end and it's it's something that's achievable by by everybody in this roomso that's the end of the sermon knowledge let's talk about what's onyour mind and the you're going to ask anything
the only thing i won't tell you is whatwe're buying or selling her about let's say yeah i don't i don't even tellmyself that i mean i i write it down that i like the coca-cola formula youknow there's only two people can get into the trust department and find outwhat they are and i don't know the two are so it at its we don't talk aboutwhat we're buying or selling but anything else is fair game personalbusiness anything you'd like to talk about andactually the top of the questions are the more interesting of this for me sodon't don't spare my feelings i may just thrown at my head
add that and with that let's i guess wegot a microphone is this the only microphone is there one on feeling likeok here is my ceiling i'm gonna do microphone to stand in linethem and i'll be regis philbin and you can yes i have an old-fashioned belief thati can only should expect to make money and things that i understand when i sayunderstand i don't understand it you know what the product does oranything like that i didn't understand what the economicsof the business are likely to look at look like 10 years in our 20 years andnow i know in general what the economics
of a wrigley chewing gum will look like10 years now the internet is going to change the waypeople should come it isn't going to change which come theytrue now if you own the chewing gum market in a big way and you've gotdouble mint experiment and juicy fruit those brands will be there 10 yearsanalysis i can't pinpoint exactly what thenumbers are gonna look like i'm really but i'm not going to be way off if i tryto look forward on something like that that evaluating that company is withinwhen i call my circle of competence i understand what they do i understand theeconomics of and i understand the
competitive aspects of the business there can be all kinds of companies thathave wonderful futures but i don't know which ones they are and i given talks in the past where icarry with me a a 70-page tightly printed list and it shows two thousandauto companies now for the start of the 20th century you had seen what the autowas going to do to this country the impact it would have on the lives andthen your children and grandchildren and so on that what it just it transformedthe american landscape but of those two thousand companies you know threebasically survive and they haven't done
that well i had many times so how do you pick three winners out of2,000 i mean it's not so easy to do it's easy when you look back but it's not soeasy looking forward so you could have been dead right on on the fact that theauto industry fact he probably could have predicted how big impact it wouldhave but you wouldn't have if you want companies across the board you wouldn'thave made any money because the economic characteristics of that business we'renot easy to define i said i'd always said the easier thing to do is figureout who loses and what you really should have done in 1900 five or so when yousaw what was going to happen with the
auto is you should have gone shorthorses there were 20 million horses and 1900 there's about four million horsesnow so it's easy to figure out the losers get the losers the horse but thewinner was the auto overall but 2,000 companies just about fail with youmerged out and so on there were three companies autocompanies in the dow industrials in the nineteen twenties and thirtiesstudebaker nash combinator and hudson motor those names are all familiar to meand maybe some more familiar to you but they're not making any cars you knowthey didn't make money i had at one time they were in the dowel 30
they were the aristocrats of americanbusiness and they got creamed so figuring out the economiccharacteristics about the winners in a wonderful business and it is not easy innorth carolina in a horrible and roberto golf i guess or we'll talk often we'rewatching i have been wilbur but if you could have seen the future ofthe airline business from that point forward and how that would transformthings you know it would blow you away that's excited people incidentally eversince but if they're going to capitalist thekitty hawk he should have shot horrible
down i mean it because it's nothing but costinvestors money there were 400 airplane companies in the nineteen twenties andthirties along there was an all the hall there was a nebraska we were the siliconvalley of america apparently very graft and they all disappeared in a terriblebusiness at the end of nineteen ninety-one if you added up the aggregateearnings from all airline companies with billions board in since wilbur andorville were down there they came to less than zero number ofpassengers went up every year the importance of the industry wasdramatically increased decade by decade
and nobody made any money it so figuring out the economicconsequences tv i think there's i don't know 20 25million sensei years old the united states i don't think is one of them made in theunited states anymore i mean it's a tv set manufacturer what a wonderfulbusiness site everybody and nobody a tv in nineteenfifty are there about 45 to 50 everybody has multiple sets now nobodyis in the united states and made any real money making the sense that they'reall out of business in the magnet boxes
the rca's all of those companies radiowas the equivalent of 20 over 500 companies making radios in nineteentwenties again i don't think there's a us radio manufacturer at the presenttime but coca-cola you know i was eighteen eighty forjacob's pharmacy or whatever and fellow comes up with something a lot of cockcopiers over the years but now you've got a company that is selling roughly1.1 billion a tout servings of its product not all cloaks writing someother daily throughout the world honoured 17 years later so understandingthe economic characteristics of a business is different than predictingthe fact that an interest
is going to do wonderfully so i look atthe internet businesses are looking at tech mrs. i say this is a marvelousthing i love to play around on the computer and it now i order my booksfrom amazon and all kinds of things but i don't know who's going to win unless iknow who's going to win i'm not interested in the best thingi'll just play around on the computer at defining your circle of competence isthe most important aspect of investing it's not how important how large yourcircle is you don't have to be an expert on everything but knowing where theperimeter of that circle of what you know what you don't know is and stayinginside of it is all important
tom watson senior started ibm said inhis book he said it i'm no genius said but i'm smart inspots i stay around those spots and you knowthat is the key so if i understand a few things and istick in that arena i'll do okay and if i don't understandsomething but i got all excited about it because my neighbors are talking aboutstocks are going up everything they start fooling around someplace else eventually i'll get cream and i shouldso now let's go over here a little bit i got two short questions one is how doyou find intrinsic value in a company
while intrinsic value is what is thenumber that if you were all knowing about the future and could predict allthe cash that a bit of business would give you between now and judgement day discounted at the proper discount ratethat number is what the intrinsic value of businesses in other words the onlyreason for making investment laying out money now is to get more money later onright that's that's what investing is all about now when you look at the stock when youlook at the bottom so miss united states government is very easy tom what you'regoing to get back
it says it right on the bond it sayswhen you get the interest payments so when you get the principal so it's very easy to figure out thevalue of a body could change tomorrow of interest rates change but you are thecash flows are printed on the bond the cash flows are printed on a stockcertificate that's the job of the animals is to print out change that stockcertificate which represents an interest in the business and change that into abond and say this is what i think it's going to play out in the future when webuy you know some machine for shaw it to
make carpet that's what we're thinking aboutobviously and you know you all learned that in business school but it's thesame thing for a big business it if you by coca-cola today the company isselling for about a hundred and ten to fifteen billion dollars in the marketthe question is if you had a hundred and ten or fifteen billion you would belistening to me but i didn't listen to you it's nothing but the question iswould you lay it out today to get what the coca-cola company is going todeliver to you over the next two or three hundred years
discount rate doesn't make muchdifference after as you get further out but and that is a question how much cashthey are going to give you it isn't a question of you know that is thequestion of how many analysts are going to recommend that or what the volume ofthe stock is or what the chart looks like running it's a question how much cash is goingto give you that you only read the true with if you're buying a farm - if you're buying an apartment houseany financial asset for oil in the ground
you're laying out cashin how to get yourcash back later on and the question is how much you're going to get one here toget it and how sure are you and when i calculate intrinsic value ofa business when we buy businesses and whether we're buying all of a businessor a little piece of the business i always think we're buying the wholebusiness because that's my approach to it i look at it and say what what will comeout of this business and when and what you really like of course of them to beable to use the money they earn and are higher returns on it as you go along imean berkshires never distributed
anything to shareholders but its abilityto distribute goes up as the value of the businesses we own increases we cancompound it internally but the real question berkshire selling for will say a hundredand five or so billion now uh what can we distribute from that hundred and ifyou're going to buy the whole company 405 million now can we distribute enoughcash to you soon enough to make a sensible at present interest rates to lay outthat cash now and that's that's what he gets out doing at the end if you can'tanswer that question
you can't buy the stock you know you cangamble in the stock if you want to your neighbors can buy it but if you don'tanswer that question i can't answer that for for internet companies for examplethat a lot of companies that all kinds of me so i can ask for but i just stayaway from those number two so you get formula is involved infinding intrinsic values and circumference and you got a mathematicalthis is that just got a present value of future cash show segments for questionis why haven't you written down your set of formulas or your strategies inwritten form so you can share with everyone else
well i think i actually have writtenabout that oh and if you read the annual reports over the years back the mostrecent and report i i use what i've just been talking touse the illustration of esau because here he stopped was in 600 bc smart manwas smart enough to know it was 600 bc though i mean it will take a littleforesight that but he stopped you know it between tortoises and hair is alwaysother things he found time to write about you know bert and he said a birdin the hand is worth two in the bush now there isn't quite complete becausethe question is how sure are you that there are two in the bush
and how long you have to wait to getthem out now they probably knew that but he justdidn't have time because he had all these other problems to write and had toget on with it so but he was halfway there and 600 bc that's all there is toinvesting is how many birds in the bush what are you going to get them out andhow sure are you now if interest rates are fifteenpercent roughly you've got to get two birds out of thebush and five years equal the bird in the hand but if interest rates are threepercent and you can get two birds out in 20 years it still makes sense to give upthe bird in the hand because it's all
gets back to discounting against aninterest on interest rate that hamish often you don't know you know not onlyhow many birds in the bush put in the case the internet companies thereweren't any birds in the bush but that but they still take the bird that yougive them from the hand that but it's but i i actually have written about thissort of thing and stealing have away from the top of the rotor some 2,600years ago but i've been behind on my reading yeah yeah good morning huh i know you'revain for your success but i was curious is there any particular moments in yourlife that or mistakes or failures that
you've made that were particularlymemorable what you may have learned from them andif you have any particular advice for the students here in dealing with thewith the discouraging circle yeah i well i may have made a lot of mistakesbiggest mistake i exalt while and not the biggest not necessarily the biggestbut the by berkshire hathaway itself was a mistake because virtually lousytextile business and i brought a very cheap i've been taught by ben graham to buythings on a quantitative basis look around for things that are cheap andthat i was taught that same 1949-50 made
a big impression on me so i went aroundlooking for what i call you cigar bunch of stocks and the cigar butt approach tobuying stocks is that you walk down the street and you're looking around forcigar butts and you find this honestly that's terrible-looking soggyugly-looking cigar one pot left in it but you pick it up and you get your onepuff disgusting is right away but it's free i mean it's cheap and then you lookaround for another soggy you know one puff cigarettes well that'swhat i did for years it's a mistake ah although we make moneydoing it but you can't make it with big
money so much easier just to bywonderful businesses so now i would rather buy a wonderful business at afair price that a fair business with a wonderful price but in those days i wasbuying cheap stocks and berkshire was selling below its working capital forsure you have plans for nothing at the machinery for nothing you get the inventory and receivables ofthe discount is cheap so i bought it and twenty years later i was still running alousy business and that money did not compound you really want to be awonderful business because at that time is the friend of the wonderful businessyou keep compounding it keeps doing more
business and you keep making more moneytime is the enemy of the lousy business i could have sold berkshire perhapsliquidated it and made a quick little profit you know one puff but staying with thosekind of businesses is this is a big mistake so you might say i learned something outof that mistake and i would have been way better off taking what i did withberkshires i kept buying but better businesses i started insurance business sees candythe buffalo and all kinds of things i
would have been way better doing thatwith a with a brand-new little entity that i'd set up rather than usingberkshire the platform now i've had a lot of fun out of it i mean everything in life seems to turnout for the better so i i don't have any complaints about that but it was a dumbthing to do i went in the us air i bought apreferred stock in 1989 ah as soon as my check cleared thecompany went into the red never got out i mean it was it that really done i mean a dead i've got an 800 number icall now whenever i think about buying
an airline stock i call them up any ourthat fortunately i call it three in the morning and i just dial it myself myname is warren i'm a narrow holic and i'm thinking about buying this thing andthen they talked me down many things happened thanks takes hours sometimes but it'sworth it flipping if you ever think about thatera of buying an airline stock call me and i'll give you the 800 number becausei don't know you don't want to do it but we got luckyin terms of how we eventually came out on it but it was a dumb dumb decision
all mine and i've done i biggest biggest step in terms ofevents that in terms of opportunity cause eventually cost i brought half interest in a sinclairfilling station was about 20 with a guy was in the national guard with out of myten thousand dollars then i put two thousand dollars in and i lost it all so that was twenty percent and thatmeans that the opportunity cost is now six billion dollars of that of thatfilling station which is a big price to pay for you know getting the white withyour windows in the fields hannah
windshields and things like that so actually i like it when berkshire goesdown does it reduce the cost of that mistake on an opportunity to us but thebiggest mistakes we made by far i've made not we've made the biggest mistakesi've made by far our mistakes of omission and not coalition me it's thethings i knew enough to do they were within my circle of competence and i wassucking my thumb and that is really those are the ones that her they don'tshow up any place i probably cost berkshire at least five billion dollarsfor example by sucking my thumb twenty years ago are close to one fanniemae was was having some troubles and
forget about the whole company forpractically nothing and i don't worry about that if it's microsoft because idon't know what was microsoft isn't in my circle of compliments that's why i i don't have any reason tothink i'm entitled to make money out of microsoft or out of cocoa beans orwhatever but i didn't know enough to understand fannie mae and i bullet andthat never shows up under conventional county but the call i know the cost ofit i know i know you know that i passed it up and those are the big big mistakes and
i've had plenty of them at and youunless i tell you about them in the annual report and i resist thetemptation sometimes as i tell you about him in the annual report you're not going to know it because itdoesn't show up under conventional county but automation is way bigger thanaccomplished there is a big opportunities in life have to be seizedout we don't do very many things but when we get the chance to do somethingthat's right a big we've got to do it and even to do it ona small scale is just as big a mistake almost is not doing it at all i meanyou've really gotta you gotta grab them
when they come and that because they arenot going to get 500 great opportunities you would be better off if when you gotout of school here you gotta punch card with 20 punches onit and every big financial every financial decision you made you used upa punch you get very rich because you think through very hard each one of you want to a cocktail partyand somebody talk about a company didn't even understand what they did hecouldn't pronounce the name but they made some money last week and anotherone like it you wouldn't buy it if you only had 24inches on that card there's a temptation
to dabble if particularly during all markets insocks is so easy you know easier now than ever because you can do it online you know just you click it then andmaybe goes up to . get excited about that you buy another one the next dayand so on you can't make any money over time doingthat but if you have a punch card with only 20 punches we're going to get another one of us toyour life you would think a long time before every investment decision and youwould make good ones and you make big
ones and you probably wouldn't even useall 20 punches at the in your lifetime but you would need to yeah mr. perfect morning and in yourcomments about making mistakes and errors like that you talk a little aboutyour self discipline when you're in a position and you you feel like it's nolonger good in what criteria to use to you just finally abandoned it yeah when i started out the southsituation has changed over the years because when i started out and why ideasthe money and i would go through movies manual i went through it page by pageand then i went through it again
by page and i found stocks in there thati could understand that we're selling a bike to time journeys even one timeservings well when you don't have 10,000 bucksthat i can get a little frustrating and and if you don't like to borrow moneywhich i never like to borrow money so i was always coming up with more ideasthan i had money so i had to sell whatever i likes least to buy somethingnew that just was compelling to me and it for a long time i was in that modeand now our problems we have more money than ideas so where when
if you look at our annual report whichis on the internet under in our home base furniture out of the way . com you'll see something in the back callthe economic principles of berkshire and you will see which i believe in settingout for my my partner's they are my partner's i don't look at my share of mypartners and i got my partners for life so i want to tell them how i think andif they don't just agree with the way i think that's fine but i don't want themthat i don't be disappointed in me so ah i lay out there and i say in termsof are wholly owned businesses we're not going to sell no matter howmuch anybody offers this for me i mean
if somebody offers three times whatsomething is worth that sees candy the buffalo news for showers whatever maybewe're not gonna sell it i may be wrong and having that approachi know i'm not wrong with my own daughter percent of aperture becausethat's the way i want to live my life i've got all the money could possiblyneed you know just amounts to which a changein the newspaper story on my obituary and the amount of money the foundationhas and the break off relationships with people i like and people that havejoined me because they think it's a permanent home to do that simply becausesomebody waits a big check at me would
be like something for my childrenbecause up to a big shot i won't do that and i want to tell mypartner's i won't do it so that they're not disappointed me more and more withcertain stocks we've got that approach now if we werechronically short of funds and all kinds of opportunities coming we might have asomewhat different approach but our inclination is not the cell thingsunless we get really discouraged perhaps withthe management or we think the economic characteristics of the business changein a big way i mean and that happens so what i'mgoing to sell simply because it looks
too high yep in all likelihood that mean that ican't make that a hundred percent but it's it's that's that's that's the principle underwhich we operate we're generating right now five billion of cashier at least so it'sa hundred million bucks every week and you know just met we've been talking about half an hourand i'm not a damn thing so since you know i think the real question is how doyou put it out intelligent by the ad and
if we were selling things would be justthat much more so they make their money there may come a time when that wouldchange but what we want to and i have partners cheryl were partners who would say ifyou can get three times what sees candies worth why don't you sell it andthat's why i want to be sure before they come in they know how i think on that imean they're they're entitled to know that that you really want to thank formeta you know if you're going to get married and you want to mary's that'sgoing to last initially the happiest married you knowor one that that martha stewart will
talk about anything that you want amarriage is gonna last what quality you look for in a spouseone quality good for brains you look for humor you look forcharacter to look for beauty now you look for low expectations that that is the marriage is gonna watch them both have low expectations i made it andi want my partners to be on the low side on expectations coming in because i wantthe marriage classes the financial marriage when i join me at virtual and idon't want him to think i'm going to do things that i'm i'm not going to do sothat's that's our guiding principle
the device is all free in your medicaladvice everything next time good morning it mr. babbitt ihave a question regarding evaluation of the sounds of investment in recent yearsappears that the use of tax sheltering in preparation is increasing and suchyou know reputable companies like ups and others involved in a cold part ofsilver shoulders with irs and as we know most of these transactions are veryartificial but yet there is the profit there from the investor perspective doyou think it's beneficial for investor that the company that they invest ainvolved no see charters and if so do you think would behelpful is it built in such that
disclosed in statements and immediately no statement not sure i got that ahundred percent george to you that i will repeat that it and they are all thegiants shot at it they if you think that the involvementof a corporation that you invest or anybody for that matter invest in taxshelter which is by some definition of that attack showers right i've never used one yeah i know i wannago out to it saying so i'm asking if you know that the corporation is involved insuch activity that is beneficial in charts pattern would you would thinkthat that's helpful for investments
what does that mean there there's butthey're perfectly legal ways to show their taxes i mean we we did and stilldo but we were the earliest ones to go in for low income tax housing creditsthat guy met with president first president bush about about that one andthat benefits are still mild degree it it's not a big element of virtue of itsa penis and in terms of pictures overall value but it it is a congressionallyordained tax benefit i wouldn't call exactly a shelter it's atax benefit that congress has decided they're willing to offer business those and they that because they thinkit's the best way to to generate
low-income housing so we participate insomething but that it's not a it's not a big factor and and what we do and what iwant there's no there's nothing wrong with that then if you get into taxevasion i mean that's a whole different game that point they'll go to jail no but certain businesses some insurancecompanies are incorporated in bermuda i that and add you can save a lot oftaxes you have to meet certain other tests which we wouldn't want to meet but if we were willing to meet thoseother tests there's nothing illegal or immoral aboutus moving to bermuda we're not going to
do it and what if if the restrictionswere done it that the tax code is the rule book and you follow the rule but ithink some of the things people do in terms of bending that rule book get veryclose to frog and sometimes cross the line into fraud and when they do i thinkthat would be be prosecuted but that's that's another game and inside there hasbeen more pushing on that i would say in the last five years and certainly was myexperience earlier and there are more there's up i think now is diminished thelast year too but a couple years ago there was very aggressive marketing bysome of the auditing firms and of these even with sure
percentage shares of the gain to be paidto the others i think that those things got fairly dubious and pretty when theyshopped for legal opinions and also that if you got caught doing these things youcan say well i was rely on this legal opinion and therefore i shouldn't go tojail but just pay the back taxes so i i don't know how many anything wereassociated with it has done that but i've obviously if they push too far wedon't want to be there yep i was curious with the large numberof people you have now have with the tremendous amounts of wealth what do youthink of the current state of philanthropy
well i'll be out this week and then actually10 : out flying on to seattle and then and talking to the united way group outthere they see how well you hide away raises more per capita i believe in iteither way in the country and and bill gates will be there were talking jointlyhis mother was very active and the united way but bill is going to giveaway over a billion dollars a year and a lot more later on but right now abillion and it's very interesting and he's very rational about it and he'svery informed in fact he got somebody i think is primary advisor in the medicalfield as fellows with the cdc in vienna
and bill reads 15 books so a month onthis i mean he is thinking just absorbing i i wouldn't be able to get itthat fast but he just says with a billion dollars he wants to save as manylives for years you can so how did he get that his objectivehe's it's just as much a metric of his of his foundation as some other metricreturn on capital might be for a business and he says i'm going to spenda billion dollars or how many how many lives can be saved for that so he'sgotten very heavily in the vaccines and and aids in africa number of things thatit's very rational i personally i think i've all my 99 . something percent of mynet worth will go to a foundation after
the ladder of my wife and i and i amit's all going to go to foundation far as i'm concerned i got from society'sgonna go to society i've written a letter to my trusteesi've got very few trustees to get a whole bunch of trustees in my view itthey just homogenized themselves down to sort of the lowest common denominatorbecause he had 30 people in a room and prestigious people but they're also allhave their particular all modern allow other particular hospital and it willbecome a big trade-off game you know that they like congress so i have very few people and i don't givethem anything specific because i tell
them their judgment above ground will bebetter than my instructions from six feet underground son that i don't liketo think that but it's true so i tell him i look the society are theones that don't have an actual funding constituents see you love or are justdamned intractable and very difficult to solve so i don't i am not going to haunt themat all if they spend big money on some terriblyimportant problem and they fail because they're taking on tough problems when iby businesses i'm buying easy businesses the reason that big problems of societyor big problems is that their damn tough
to solve so they're they're swinging atbad pitches i'm swinging it easy pictures inbusiness but they're swinging it they have to swing at bad pitches but i tellhim i wanted to try and do it and if they fail it doesn't bother me at alland i tell them if they give a million bucks here and a million bucks there ina million bucks there they're not going to sleep because i'mgonna be haunting him i'm going to come back every night you know i did not wantthe eyedropper approach used to flying through p but i want them to use their judgment tolook at important problems that do not
have a natural funding constituency you know if the government's going tofind it fine you know i mean they should be funding important problems but wedon't need to do it the the ball applied to be in my i havein my opinion is the fun things that don't have the natural constituents andthat's what bills doing there isn't the neck there are a bunch of people aroundthat you can make an emotional appeal to to make vaccines available to millionsand millions of kids around the world it just doesn't target anybody's heartstrange you can make buildings after mean it just isn't the sort of thingthat you can raise money for on an
emotional basis and there's nothingwrong with raising money on our emotional basis but that is a problemwill get solved by a funny constituent it was responding to that but bill isresponding to what it is mind is that is the important thingwhich is saving lives and he doesn't care whether it gets his name on abuilding or whether anything happens or what everybody knows about it and hegets published they just because of the scale is on but it he doesn't care about that i can promiseyou that so that's my philosophy is that i got this money not because i'm asuperior human being not because i've
done more for society and other people i was wired the right way to be droppedinto the united states at this particular time i mean it's a huge capitalistic societyand i'm wired no credit to me but it born that way sothat i'm better an asset allocation than other people to some degree just like other people are better at allkinds of other things and i was with two teachers out of the sun valley they're doing more for society that i amand they don't
this market system does nothing for themmarket system does all kinds of things for me kate says if i have been born fivethousand years ago you know i have been some animals lunch you know because i can't run very fast climb trees i mean you know what thosestate and i could i could tell that animal is chasing me in a way that wesee how i can allocate assets you know it wouldn't make any difference so here i am yeah i'm bored out again ithe just very very lucky and at the odds
when i was born in nineteen thirty theodds with 50 to 1 against baby born the united states that's a terrible set onto the face andthen i was rock down here you know and if i then drop down and / or someplaceer or china i mean i wouldn't have a chance sosociety is what does it for you and and it should go back and might be with yougo back to society if you've been lucky enough to be dropped into a societywhere your particular wiring pays off big now it that that's just luck and and youknow there's nothing wrong with being
like i don't feel guilty about anythingelse but i also don't feel that i feel like i have a lot of fun doing what i dobut i feel the money should go back into society and it should go back asintelligently as it can and best way to do it intelligently is to have highgrade and intelligent people administering it at the time and youdon't know the problems that are going to be out there 10 years from now or 20years from now or 30 years from now but i do know if i've got a small number ofhigh-grade smart people and high grade is more applied out oh of if you gave me 20 extra points ofiq but but cheated a little on the high
grade i wouldn't take it because thatthey got to be they got to be there's somebody chances that to do things in apetty way or you know do try to make people get supported in their own mindsto their own interests rather than the interest of the institution so i reallywant super high-grade people doing it and i've got them and i think the moneymight do a lot of good it may do no good but it will be operating in fields or ifit doesn't good that good probably would have been done otherwise yep i'm just wondering there's a lot ofdifferences between the recent boom and
bust the stock market and one in thenineteen twenties but there's also a lot of similarities and the simulators areallowing people to draw the conclusion that stock prices will be trappeddepressed for some time to come what where do you disagree agree withthat we bought in the the whole century is quite interesting if you take the20th century it was unbelievable century for the united states the gdp per capitaand that's the way to think of this per capita sometimes they talk about our gdpvs europe's but if their populations the same every year an artist goes up onepercent you've gotta you know in the end of the goods you gotta i have a divisoras well as the numerator and and so gdp
per capita in the 20th century in theunited states one of six hundred and ten percent actually qualitatively went toofar more than that because you can't really measure you know certain thingsand medicine or whatever it may be it and the improvements but just out ofquantitative basis it went up every single decade includingthe decade of the thirties so here you have a hundred years whenbasically the us citizen really was getting was improving their lot decadeby decade by decade the thirties it was a 13-percent that's decade wasworld war 2 the night the forties 36-percent the worst decade was thefirst world war so you get sometimes the
analogy i can get in trouble andanalogies but any of that it was it was a huge . interestingly enough there weresix big periods in there for the stock market in both directions there were three big bull market from1910 1920 one the dow want from 66 to 70 one less thana 10-percent move in 20 years less than half a percent here you gotevidence to put a half of it didn't move from 21 to 29 as you point out at what it went from 71 to a high of 381 inseptember of 1929 while five hundred percent
well obviously the country well being ofthe country thing about five hundred percent during that period and thewell-being of the company in the country about the whole lot more than tenpercent during that first 21 years so he had this very uneven development from 19from september's 1929 until the end of 1948 the download from 381 to about ahundred and eighty was cut in half and that was eighteen long years and yet theper capita gdp was moving right up during this whole period to the economyis doing fine for 38 265 the doll one again from about a hundred eighty up toclose to a thousand again 541 which was far outstripping from 65 to 80 1 thedoll went down literally
well again per capita to be and thenwe've had this last period where it's going to prolifically if you take thewhole hundred years it went up a hundred and eighty-four one every thousanddollars became a hundred eighty thousand but forty three and a quarter you'reforty three and three-quarters years with those three big huge bull marketsand fifty six and a quarter years with periods of stagnation all in an economythat was doing fine you know year after year after yourfifty six and a quarter years net the dow was down a couple otherpoints during that period and the other forty three and three-quarters yearsmade up the rest of this move from 66 to
11,000 someone to dallas self-excitedyourself how could it be that you can have a country was doing better andbetter and better and better citizens we're living every every generation wasliving better than the one that preceded but you have these huge changes biggains a few times long period of stagnation 20 years i mean that's a longtime to do nothing the answer is that investors behave invery human ways which is they get very excited during bull markets and theylook in the rearview mirror and they say i made money last year i'm going to make more money this yearso this time i'll borrow an hour or the
neighbor says you know i wasn't it lastyear when that neighbor was dumber than i am a lot of money so i'm going to goin this year's they're always looking at the river where and when they look in the rearviewmirror and they see a lot of money having been made in the last few yearsthey plow and they just push and push and push on prices and when they look inthe rearview mirror and i see no money having been made they just say this is a lousy place tobe so they don't care what's going on in the underlying business and it's it'sastounding but that's that makes for a
huge opportunity just huge opportunity i mean i have lived through roughly halfin investing sense about half that . and i've had that long period of stagnationfrom 48 i mean from 65 to 80 - 17 years i wrote an article for forbes in 1979 ijust how can this be pension funds in the nineteen seventyput a hundred and some percent of their new money in stock because they werewild about stocks then they got a lot cheaper and they put our record low innine percent of that nobody in the 1970s when stocks for way cheaper peoplebehave very peculiarly and and in terms
of the reactions because they they'rehuman beings and they get excited when others get excited they get greedy whenothers get greedy they get fearful one other get fearful and they'll continueto do so and you will see you know if you will see things you won't believe inyour lifetime and securities markets and the country will do very well over timebut you will see these huge waves and then and if you can stay objectivethroughout that you can detach yourself temperamentally from the crowd you get very rich and you won't have tobe very bright i mean it i'm sure you are but but
that one you know it just it doesn'ttake brains it takes temperament it takes the ability to sit there andlook at something when i started out in nineteen fifty i would go through andfind things at two times earnings and they were perfectly decent businessesand people want two jobs at those companies and everybody knew they weregoing to be around anyone behind with two times earnings and that's wheninterest rates for two and a half percent you know i went to the startinstalling security lights 21 and i kansas city life insurance company haveto be a fairly prominent company in omaha and the policies they sold googleif you're buying life in church from
them had a building and assumption oftwo percent interest the stock of kansas city life was selling it less than three times earnings you'regetting 35% if you bought the stock no question about the sound of thecompany i went to the local agent as i figure it out i'll give yourself him afew shares of stock i mean think i understand he's got his whole lifeinvested in this company with the local agent we've been with them for 20 years and asname is mo size of mr. moose and you know you're selling these policies with2% even have a few members of your own
family and you can buy into this companywhose paycheck youtube and on every month that you know and whose future youof your your beneficiaries of his life policy depend on and who you're sellingthem you know a two percent investment on and you get thirty five percent ofyour money you know and i'm stuck trying to be good and then i couldn't iconsultant and i'm i will allow themselves when i mean the world youhave to start with that but but it just blew me away it blew me away i thought sometimes iused to wonder if i his nuts you know that that but those things the samething happened i mean 1964 the dow
closed the dates 864 and then a 1981 17 years later laterit closed at age 65 and move one . in 17 years now it's not a big move and thatyou can't believe the how discouraged people were by that by the during thatperiod but you know people are looking better so things can go on a long time that don't make sense and but they don'tcome to an end i mean the internet thing i mean you had these companies sellingfor many billions of dollars that had nope
really frankly no prospects are makingany money that that's a that's a bubble butt hurt sign one time said anythingthat can't go on forever will end now that's a pretty good but think about that and particularlythink about it next time you're trying to do something just because the stock'sgone ball a lot you know many of your neighbors make money or something thatyou've got to be she's had to sit and think objectivelyand think about what i buy this whole business it's an internet companies got a hundredmillion shares outstanding a hundred
that's ten billion dollars is it worthten billion dollars it's worth ten billion dollars it's gotto be able to give you you know seven or eight hundred million next year and ifit doesn't give you seven or eight hundred million next year he has a goodmove maybe ten percent more than that theyear after and continue to him there are a lot of businesses can dothat and people just go crazy and of course it's fun i mean it's you know it's like that signthey put in doctors offices and says avoid hangover state rock and up thatminute
it's just so much fun to keep like butyeah you got it you got to do sensible things to get to get that result yeah yeah next well we got three peoplestanding there so let's let's do the three that are standing ok good morning sir hi i i was wonderingwhat your opinion is the federal reserve and their actions taken recently youfeel like done and not to fix the economy yeah well i'm a big fan of alangreenspan's over time i've known him for a long long time we were on a boardtogether
caption reason alan is a very very smartguy he is motivated in my opinion entirely by whatever for the unitedstates people united states it so you better that you've got youcouldn't have a better person in there and the problem he may have is that that because histenure in office has been associated with this incredible all market thatthat even though he wouldn't have claimed credit for that people appliedassociated because of the importance of the fed generally they might associatewith him so they made if things don't work out so well made blame them as wellbut i think his policy is generally been
very good you have to understand one thing thatabout the fed is that it's not as powerful as the mystique would make it it's a break is better than its gaspedal when the fed wants to put on the brakes we go for the windshield i mean how doyou know the economy just wrong yeah and they can put on the brakes paulwalker did it he broke inflation by doing it but imean when he put on the brakes and that . around nineteen eighty i mean peoplehated he was crucified for what is the
right thing to do and he could do it hedid it all by himself and these he and and it was the only way because of themomentum the inflation was generating it was the only thing that was what wasneeded then normally unpopular it's much harder for a greenspan to puton the brakes because nobody wants him to put on the brakes busty so visiblebut he's put them on sort of gradually but stepping on the gas pedal he does not necessarily get the sameresult it may help but there are a thousand other variables operating andas you see in japan you know you can get down to zerointerest rates and you can stimulate
anything so it isn't like the japanesehaven't read the same books we read about economics i mean they've readcanes and they were the whole thing so we're not smarter than they are we don't have any secrets they don'thave but they don't know how to get their economy going and you know there -
ways and i've i don't think you couldhave anybody but he better and i think he's done the right thing to this pointbut the right thing may not be quite as as effective as as people may help thatwould be in economics as always you always want to ask and then what youread in the paper well what happens if the japanese start selling governmentour government bonds or what happened they dumped the dollar they can't dumpthe dollar there's a way to dump dollars you couldyou can at least dollar assets because the japanese want to sell government ourgovernment bonds they sell up to us and they get a timedeposit or a demand deposits it here
they still own a dollar asset if theysell them to the french they get it and they may get some answers from thefrench but now the french habit i mean the only way you can reduce foreigninvestment in the united states is to change it around so they're consumingmore than from us more than were consuming from that might be one oncewhen we buy a television set from japan if we buy more television sets from themthan they buy equivalent consumables from us the exchange of what balances things iswe give them some investment type asset whether it's cash or us government bondsor stocks or movie studios are real
estate or different things and the onlyway that reverses is when we start running a trade surplus which were milesaway from so logically you know if you read classic economics that you wouldbelieve that our currency would have been weak along earl weaker over the recent years andthat it would be a week now but there are other things operating and that'sone of the problems about economics is there's never just one variable there's usually hundreds of variablesand they operate with different impact at different times
i mean it's a it's it's not like aphysics for me if i mean it tho i guess it would be if you get in the heisenbergprinciple or something like that but but the the formula has a lot of the samevariables year after year but the relative importance of those variablesand how they interact with each other is never exactly the same and that's whatwe find out the japanese find out everybody finds out and and foreigncurrency or the currents are the value of a dollar and currency rates aredefying what you would expect based on history but somebody said of historywere perfect guide you know the forbes 400 would all be librarians you knowshe's going to look it up in the books
and it always you know all the answersbut it history doesn't repeat itself as marktwain said i was going to repeat itself but it rhymes i mean things come backbut they don't quite come back in the same format will understand all thisperfectly for years why the dollars behave the way it has but i i think itwould be useful net from the us if the dollar was strong yes mr. buffett thanks for taking myquestion my question pertains to small business and my family spending thetruckload sector of transportation for about 50 years and as you talked aboutthe airline industry and other merchants
next week acquisitions and things going on and alot of the smaller players being tossed out of the market what do you see for people that likethis room for students that want to start a small business and maybe theywant to start in a business that is somewhat of a commodity type businessbut as businesses the large corporations get larger and their deficienciesincrease how can a small businesses compete it has these people the idea the in manyareas small businesses have an advantage
you know another businesses scale has ahuge advantage and i mean you don't want to be a a tiny carbon steel producer onthe other hand when many miles came along and learn how to use scrap moreeffectively that than the the older methods of making steel they actuallyhad managed to scale is a huge advantage in some businesses it's you know the largest airlineshaven't won southwest airlines as one starting with you know just a few planesflying down there between houston and allison and they have become bigger buttheir ambition hasn't been to be the biggest and you know they they probablyby the fuel of just as cheap as united
that we bought it you know when there'slots more walmart is a classic example i mean who would have thought 25 years ago30 years ago i'm here with serious with a hundredstory plus building in chicago had access to money far cheaper than sample i'm sam was credit was not as good asserious every supplier wanted to do business with sears nobody ever heard ofsam every real-estate developer was developing a new shopping center wentfirst to sears on sam got the short end so here's the guysstarting in bentonville arkansas and he kills them over time
just playing kills him and disadvantagedand buying disadvantage and borrowing disadvantage in real estate advantage sam walton and his ability to inspire inthe end hundreds of thousands of people to be enthusiastic about going to workand doing although doing the right things over time so i would be just asoptimistic about small business generally now there's certain areaswhere scale just as i was just playing important but but i see no disadvantagewe intentionally at berkshire we have a hundred and twelve thousand employeesmore in georgia than any other state in the union incidentally we employ a lotof their don't and then we put a lot of
people are making a guy go ad weintentionally with our hundred and twelve thousand but we probably haveabout how many business units but lots at will have 13.8 people at headquarters i'm not the point agent said that my iresent it when people like that i have a full but we have one that works fourdays a week then that's all we have at headquarters hundred twelve thousandpeople a hundred and five billion market cap but we intentionally keep our unitssmall we think we want them to have the nimbleness the responsiveness of thecustomer particularly that will turn them you know that essentially will morethan offset anything that the scale of
having maybe a little more purchasingpower something when the will develop we own a home furnishing with furniturehome furnishings business in utah run by phone bill child he was featured infortune about one issue ago that it did the cover story was god in business itwas and it was bill was the number one illustration built up that business fromhis father-in-law was doing two hundred fifty thousand dollars a year and then iwas over half the business in utah in this field but you're close to 400million he built by thinking about the customer and the truth with he wascompeting with sears he was competing with rabbits was a huge furnitureretailer the retailer in the past he was
competing with everybody but all he thought about from the moment hegot up in the morning was how do i take care of my customer and that wins we have a business in omaha some of youmay have heard of it's the largest home furnishing storein the world in all which only has a sms a of 650,000 people it's on 72 acres it's does 325 million dollars in onelocation which happens to be five hundred dollars for every man woman andchild in the sms a but it draws from
beyond that that business comes abouther as resulted from an investment of five hundred dollars in 1937 by a womanwho walked out of russia in 1921 she'll and she walked out . on a peanutboat landed in seattle with a tag around her neck she could speak one word ofenglish the american red cross look at the tag is at fort dodge iowa they got a fort dodge i what shecouldn't pick up the language she was there two years she said she felt like a dummy so shecame to homo because there were other russian jews there and she's at leasthave somebody to talk to her little girl
started school francis francis would come home at nightand teach her mother the words you learned in school that day that's howthis woman rose bump can learn the english language but from her from herdaughter from kindergarten on teaching of the words she bought seven siblingsover from russia one of the time 50 bucks every time she say fifty bucks shesold used clothing and the works she had her seven siblings over hermother and father and by 1937 16 years after she got here she saved fivehundred dollars she got out of train went to chicago tothe american furniture mart which was
huge impressive things you had this - smartas hell but she fought like a peasant away and she saw this building shedecided to name her company then browse current you want about five hundreddollars worth of got about two thousand dollars worth of you merchandise all the way back to omahashe worried because she thought i old $1,500 and she only had afive-hundred-dollar equity so she got to omaha she took the bed the sofa
the refrigerator out of her own home tosell fast so she could get the money so she canpay on time she took that business and build it from that start no one would sell to her she went tocourt four times because they tried to the carpet manufacturers tried to keepher from selling the discount and she went into court add told the judge because you figuredout ways to buy this stuff in various nefarious ways from other hand of peopleby a foreign she said look at i pay three dollars a yard for this carpet
brandeis sells it for 698 is i sell itfor 398 just tell me judge how much you want meto rob people she defended herself papers wrote it up the judge boughtcarpet from her the next day i mean it was no marvelous brandeis is selling anymore they werethe huge department store , she put everybody out of business and the punchline she worked till she was a hundred andthree she sold me the business when she was 89 and she didn't have she didn'thave an audit i went out this year i want afternoontook a check out with nana had because i
knew she wanted to do something and isaid mrs. b here's the money i said i don't even know what just tellme where the only money that never open any money since i all those guys back innineteen thirty-seven and she said it's all free and clear she never seen a balance sheet shedidn't know what accounting terms mad but she understood the nature of thebusiness and i told her i said i'd rather have i don't have your word andother than an order from every one of the big six or bigger or whatever theirword number at the time of the top are turning from sin and she worked till shewas a hundred and three
she died a hundred and four she hadthree siblings at her funeral i mean those are some genes her sonworks there now he's eighty two or three and the three sisters are all alive butthe punch line is she couldn't read or write this woman could not read or writeif you told her this room was sixty eight feet by 43 she would tell you howmany square yards it was like that she ever went to school to be in her lifeshe would tell you how much that wasn't 598 yards she had the tax she's not about something that she likedyour looks and that would be it and that was that you know that is thethat that you can't beat that
you know had and you can't replicatethat at general motors you can't institutionalize that that the personwho brings that kind of drive to a business and does it day after day andthinks about the customer yeah and that's all she did i can't andonce you've raised four kids in the process to but you can't hit it can'tmiss and not you don't have to worry if you're an entrepreneur in most fieldsare some field work you can't do it because there are somescale aspects to it but in most fields you know you will kill people by seanthat which was shocked nobody ever heard of sean carpet 30years ago and got forty percent of
the business in the country - so don't idid it's a great field of opportunity outthere and i had and i know about trucking specifically but i wish you thebest on it then your you won't be at a disadvantage in many fields if you'resmall and you'll actually have an advantage for thank you mr. buffett thank you very much forsharing your wisdom and your ideas are wonderful stories with us today we aretruly honored and pleased we've had this opportunity to get to know you a littlebit better i'd like to thank a couple people beforewe conclude for helping with the
logistics associate dean a bob gatewoodour director of alumni relations and marie garrison thank both of you david .and director of communications are a lot of work and everyone into this i thank all of you for all you've doneit all again thank you for helping make this possible mr. but we have a parting gift for youbut it needs to be placed into context before we show you what it is in yourmost recent letter newsletter - you're in a report to the shareholders youdiscuss some of the things you look for and make with making acquisitions andone of the things you talked about was
owners look for owners who care who theysell to and that was important to you i like to quote from your report when abusiness masterpiece has been created by a lifetime or several lifetimes ofunderstanding care and exceptional talent it should be important to the owner whatcorporation is entrusted to carry on its history a little bit further down you say howmuch better it is for the painter of a business rembrandt to personally selectits permanent home then they have a trust officer oruninterested airs knocks it off
well we believe that many of these wordsapply to you as well you two have created a business masterpiece you tohave created a rembrandt what we have today is a light-hearted portrait alight-hearted characterization that we hope to capture some of the businessmilestones in your career and we hope also captures some of that quick quickwit and humor that you demonstrated today it was painted by a good friend ofours and a well-known artist lives here locally alan campbell allen nice but iswith us and he will help but unveiled today alan please come down
now when we need when he unveils usplease understand that you're not gonna be able to see the detail of this moreyou're sitting but we invite you to come down and walkpast the as you as you leave today alan if you're going to speak over themicrophone place well thank you and and and mr. buffetthope you told maintain your sense of humor which appealed to me greatly when reading your corporate report and thisis going to be a test of that famous humor but it is a it is intended to be aporch or both of you and of your company
and of your values and when i was whenmarie garrison my girlfriend the alumni director here told me youwere coming and i read the comments about the rembrandt's and lying on yourback you feel like you can allow your back and paint ceiling every day brookshere you basically open the door with yourown words so and and just on the side my brother's one of your pilot's forexecutive jet i think it's not a reference to thejewelry , so you can stay this is based only very famous rembrandtself-portrait anybody's information mr. buffett will sign autographs you've gotbooks with you like in the side will set
up a table down front here for the next15 or 20 minutes would like to take a picture of you got a camera with youplease come on up don't hesitate and thank you all for coming andparticipating today was a wonderful event thank you
