Sandy Gottesman Interview - Becoming Warren Buffett

i was one of the few people at the business school that went down to wall street in 1950 when we graduated and i started dealing with clients etc and the more i dealt with various people i started to hear about warren and bill ruin who was in the class before me was a very good friend and rick kniff his partner was in my class and a good friend of mine so we had lunch one day and it was probably early in the 60s early and he said to me you know you buy the same stocks as a friend of mine warren buffett who i met at columbia you got to meet him so bill arranged a lunch with warren and that was my first exposure and then coincidentally i would guess within the month or maybe a couple weeks late maybe a couple weeks after that a client of mine up in westport who was i think dealing with warren on the sale of warren's company at the time or it was not his company it was dempster actually i think said to me this guy is coming up and he's the brightest guy we've met and uh let's play go let's all play golf together so i went up my i played golf up in westport with warren so from then on it was a complete romance you know he's a very competitive guy and warren and i used to play golf in a twosome or to foursome and we would always if we hit the ball straight out i would guess that we were within four feet of each other when the ball landed but uh he was a heck of a competitor and i would say you know warren didn't overdo golf and so i'm sure he could have gotten it well into the 70s but he he was probably around at 90 or so that's where i was i mean one of the reasons that we were we became very close friends at the time was that susie met my wife and she loved my wife and my wife she was a very lovable person and so there's no doubt about the fact that i mean warren told me the same story only you told to me 50 years ago maybe more than 50 years ago [Music] he was very indebted to susie and he loved her deeply everybody's got a certain amount of personality and charm in that family i mean howie is terrific and susie's great and i'm not so sure it wasn't in the genes to begin with i didn't know his father but he had enormous love and respect for his father and his father must have been a very charismatic guy because he was in washington you know as a representative for a number of terms i missed it at first but it came through very strongly and i think he was very afraid of his mother she lived up the street and i think i only met her once and i used to go out to omaha and i wondered you know when i first went out there i stayed at warren's house because he was very hospitable then and he didn't know many guys down on wall street but he never talked about her and i learned not to ask any questions i would think it started around well it started right after i i met warren actually but it wasn't every sunday night then it was just occasional but uh i was very much into stocks in those days and i was doing a lot of research and i was doing research on very undervalued stocks in those days you know juan was doing the same thing only more so and there were many decent opportunities at three four five six times earnings and half book value and you know every sunday night after i worked like hell during the week i would call warren with all my best ideas juan would sit upstairs in his i think on the landing where he had his chair and or a little office there and i would bring up the name of a company and most of the time he knew much more than i did about the company he'd know how many shares were outstanding you know the capitalization you know the earnings it was absolutely incredible but every idea i had i batted up to warren and it was like getting the good housekeeping seal of approval particularly if he was going to buy some and i don't know about warren but when we were finished at maybe 11 or 12 i was so stirred up which i think is something that warren is capable of doing i was so stirred up and so excited i didn't go to sleep for a couple of hours i thought warren was a terrific salesman i mean when warren said something it meant a heck of a lot and i think all of us paid a lot of attention to warren when he took a definite stand on something and you know right from the start warren knew where he was going i mean he wanted to have an outstanding reputation he wouldn't have enough announce a reputation that he never really upset the apple cart when he bought a business that he kept the management in place he never sold one of the things he acquired even though it was a mistake and so he was establishing a reputation that paid off later in life and look at the reputation he has today but that's been building and building ever since i've known him in the late 60s juan was not so interested in stocks anymore he felt the market was very high and he was buying less and less and the partnership had grown considerably so i don't know whether he mentioned this or not but i called him up and suggested he buy something that belonged to my wife's family or part of it belonged to my wife's family and it was a department store in baltimore and warren and charlie flew in because this was a fairly big deal at the time and it was the number one department store in baltimore and just like warren does i mean within 24 hours he made up his mind he would the price was right he would buy it he liked the people very much when the when he owned the business for about a year it was a business that really didn't interest him it was a retail business it was very competitive there were three other competitors all on the same opposite corners in the main thoroughfare of downtown baltimore and one the while the department store was profitable very profitable it kept expanding and it kept putting money back into branches and into elevators and into furniture stores and it's a outline outlying for you know furniture stores so he said to me you know i like businesses that throw off cash i don't like businesses that eat a lot of cash and this business particularly and i think that's true of a lot of retail businesses and that's why there's very few department stores around today they do require a lot of capital expenditures so warren said why don't you think about selling it so i did and juan had very good relationships with the management and i think they were all in favor of it and i mean they really wanted to please warren and i think i think one of the things about juan is when he buys a business people love them and they and they try their best to do their very best while he owns this the operation so to come back to your point about dempster he was not buying the greatest businesses in the world he was buying difficult businesses that were selling at big discounts i mean dempster made i think windmills so how big a market was there for windmills in those days and i would think that the electric motor and other things have changed the business considerably but so i mean but he bought dempster very very cheaply and made a fair amount of money out of it but it's not characteristic of what he does today and he learned over the years also when he bought berkshire he had become very interested in the insurance business and because of his interest in geico he learned a lot about the insurance business and he was a very fast learner and he understand stood these businesses extremely well so again he knew exactly where he was going over the years but it started out very slowly in berkshire meanwhile he was interested in making as much money for berkshire as possible so occasionally i would come up with some idea for him and we would go into it and uh whenever he worked he joined me in anything or i joined him it was a great success it's true that you know he had very good friends like walter schles and that's what they were doing but i think juan was well above the cigar butt philosophy in this late 60s and wasn't buying cigar butts because they weren't big enough and he didn't want to waste his time on him and there were there were other very reasonably priced securities that we you could buy and do extremely well and everything that i ever suggested to one that interested him he always made a big contribution that made it more valuable than i even thought about and faster when warren lost his wife he tried to have a composure that was reasonably you know composed but you could see inside he was suffering greatly and he let it go once in a while and uh because we i flew out there with a couple friends of warrens and we paid a visit and my wife was alone and you could just see the pain that he was going through i think he became much more you know i could see it towards his kids and towards his family and everything else he did change over the years no doubt about it but i don't i don't remember a lot of tough things he was a softy in many respects he might have been a little tough with the kids once in a while but that's because he he in the early years he wasn't really into running the kids it was susie that ran the kids so he was much more aloof than he was later on but look at the family today bill wayne had just started his firm and warren had asked him because warren thinks ahead of time all the time juan asked him to start a small fund for small investors that would invest the way bill invested at the time so bill started sequoia fund which of course has become very very successful and all the accounts that were small let's say under a hundred thousand or so he would suggest that they go under sequoia there were other clients that were larger and i guess some of those went to bill and some went to me and i still have fortunately the heirs of one or two of those now and they've been very good clients there were very few hedge funds back then there was a.w jones there was steinhardt there were a couple of others and they were well there was an interview actually in the paper about this that got one of them in trouble about fancy information and there was a lot of fancy information being passed around between the brokers and the and the some of the funds and some of the investors and warren i don't think wanted any part of that he was not somebody who wanted to get inside information because he was all by himself and if he had his value line in front of him he could have praised the company in a very few minutes and very successfully well we had an analyst at the firm who had done a fair amount of work on a company called home insurance and it was selling at around 17 or half 18 which is almost half book value and so i sent the report out to warren that we had and juan read it and said let's start buying it so i mean juan had much more buying power centralized than uh than we did and so wine really bought a substantial piece of this and i bought some of it for clients and we were paying an average of 18 19 a share for quite a while and after juan got to 10 in berkshire and he had to disclose his holdings he decided maybe it was a good opportunity to sell it so he suggested to me that i try out somebody in chicago that he had done business with earlier about a position he had that i wasn't involved in called lone star steel so i went out there i spoke to them spoke to them gave me a report on home insurance and lo and behold they loved the idea even though they were this was a an old railroad holding company and they made an offer for the stock we had and we got we had some other insurance companies that joined us or and they made the offer at 30 bucks a share but juan thought the stock was worth substantially more than 30 so when we sold the stock we made an agreement that if they resold it at a higher price that we would participate in a good part of the profits and sure enough when they tried to move in on home insurance because they had this big block of stock a million shares the management didn't want any part of them and so that's one of the things that was going on in these days there were there was a company called city investing there was a high flyer or the first order back then and they offered up almost a hundred dollars a share for home insurance because it had a lot of assets and they were asset light so they took over and of course you know from a value standpoint you couldn't compete with people like that within a year or two got into big trouble and and had to liquidate but i think that was true of the times i mean there was a lot of high flyers out there that were you know taking over it's like the conglomerates today bidding wars everything else was going on back then and i don't think warren liked that at all we had another opportunity we had a couple but i must say in anything that i suggested to warren turned out to be much better than what i ever thought and this was a company called studebaker which was going out of the car business and they had a huge tax loss so i called up warren i told him that we had done work on on studebaker they had started to diversify they owned a company called onan which was which is still a well-known manufacturer of uh generators they owned another company called stp which was really the the most important company they own which was the additive to your car to supposedly be good for your engine so stp was an unknown quantity you couldn't get any information in those days about it and companies didn't supply that kind of information but we knew there was a big tax loss in studebaker and there was a lot of assets and it was looked like a very very cheap stock so we started to buy it and warren dispatched either a friend of his or one of the people in the office and i forget who it was could have been bill scott but i'm not sure and they went out to the railroad track outside the factory which was near chicago and they counted the number of railroad cars going into the factory and the number of railroad cars that were coming out of the factory and that gave warren and ourselves some idea of the size of stp and we we bought quite a bit of stock and in those days i was working pretty hard and i would leave the office and around seven eight o'clock at night and i'd go to grand central station and catch the train so there was no such thing as quote machines but i would buy the herald tribune which had an e a morning addition that came out at nine o'clock at night that had all the prices in it so i picked i started a leaf through the paper and there was a full page ad by a man in i think his name was murphy in honolulu who was in the in the car business he was offering 35 a share for the stock that we had been buying between 18 and 20. i like that price range so i called up warren 10 o'clock 11 o'clock at night when i got home i said warren this guy who's a car dealer is has this full page ad and is making this offer on studebaker so juan said to me without blinking at all without hesitating he said okay he says tomorrow morning go into the crowd on it was listed on the stock exchange and buy everything that at the opening just clean it all up so that's what we did and that was the end of that bid because the stock went up above that so then the question was what would we do so a couple days later i got a call from somebody i knew out in california and he was he was trying to put a deal together so he offered us 44 bucks for the stock that we had cleaned up at around 35 that was the opening and they were wild and woolly days back then so i said okay we'll do it we'll sell it to you i thought it was a very rich price so he who he didn't have the money and he didn't have the client and maybe in the next couple hours he called up warren and said i have this terrific company for sale and of course wine said i'm the seller so anyhow he had we had put the trade up on the new york stock exchange and he was obligated so it went through finally the black bank though was probably part of susie's influence he had a good friend by the name of nick newman and nick and he nick was in a he had a grocery chain it was in omaha and some of the other cities i forget where but a very nice guy and a good friend of warrens and together they took an active part in helping the black community and i'm sure that was susie's influence omaha was a pretty segregated area back then and juan belonged to the omaha country club and uh his friends that were jewish belong to happy hollow so juan wanted to break down the barriers at the omaha country club and also there was i think another club an eating club downtown for lunches that was also very exclusive so warren felt the only way he could do it was to apply to the jewish country club for membership and the country club directors had a great deal of trouble with that on the one hand they wanted to have warren as a member on the other hand there was a limit to how many members they could have and they had a waiting list there was all jewish potential members and he was taking one of those spots so there was a real thought process that went into that and i think that they finally saw what warren was trying to do and they pushed it through and he he joined that club now i don't know about the other side i don't know at what point whether they ever did open up or not but i do know about happy hollow i think warren is free of all prejudice completely free of it and if he learned that from his father i wasn't aware of it but i but he has no prejudice whatsoever white yellow black doesn't make any difference to him i'm not sure that i'm 100 right on this but in those days salman was a very very cheap stock it was selling for much less than its value and they had done some things in mergers etc that affected the value so i actually discussed solomon brothers with him as a potential candidate because it was right there in value line and uh i had done some work on it and solomon was a pretty good franchise at the time i mean they were a top trader every every large block of stock went through solomon brothers and they were a very very aggressive successful firm juan made up his mind to go ahead and buy this buy this there was a block of stock that was available and he bought that block of stock and it was a cheap price but he didn't know at the time anything about what he was getting into as far as you know getting into trouble with the government about government bonds and that came up shortly after he got involved i don't notice i mean i think barn was sorry that he got involved but warren and charlie went on the board and charlie couldn't stand what was going on there and didn't like the culture at all and i think that you know when the thing exploded warren had 24 hours or less to make up his mind is whether he was going to go forward or just bow out and i think at that point solomon brothers could have gone into bankruptcy and warren stepped up and took responsibility which is not so characteristic of him he likes other people to step up and take the responsibility and work things out but certainly in in solomon brothers he deserves every bit of praise and as you know every year were you at the annual meeting this year so he's they in that movie almost every year they show his testimony in front of the committee so i thought i think in the final analysis it burnished his reputation but at the time he was very upset about it everybody on wall street by that time knew about warren whether investors knew about wine so much i never thought about that and i can't answer that question certainly his reputation by that time had really spread and it was no no secret and i'm not so sure he he certainly didn't have that in mind when he went into solomon brothers i mean he had an investment and he had a responsibility and he faced up to it but i don't think he was looking at it that this would improve his reputation on a national basis i just don't think so charlie met juan through a doctor friend charlie comes from omaha so he met juan through a friend of his who was a doctor i think he was a doctor and an investor in warren's partnership and charlie was starting a small partnership after his career in law out in l.a because charlie saw that there was more money in running a partnership than running a law firm so he started this firm called monger wheeler and company and charlie was a very very bright man and a very good lawyer at the time and he met warren in about a year before i'm a couple years before i met him maybe around probably around 1960 or 59 through this doctor friend and you know same thing i mean he met juan and and had the same reaction that i did or anybody else does it meets warren says wow and i think warren thought about charlie in the same way but i would say charlie has been a very very strong anchor for warren when we we made one investment together in a in that store in baltimore because warren invited us each to buy 10 percent and from then on we we we were involved in a company called diversified retailing until number of years later and every time warren wanted to do something and he would pass it by charlie and pass it by me i was 100 in favor of it and charlie always had a couple of strong reservations so i think charlie has been sort of an anchorman and he's been very useful to warren in uh in pointing out some of the problems there was an element of fraud involved in this this man at solomon brothers who had broken the law of the federal reserve i think on how many bonds you could buy in a government auction and he had gone way above that and he had he took the inventory and when the bond went up a little bit he would sell it out and make a substantial profit for solomon brothers and they used their capital that way i think many times so when well you know the story i mean he went to a good friend and said you know i got a problem because he had gotten i guess a questionnaire from the government and good friend didn't react the way he should have at the time he he didn't say let's let's get down there and confess and say mia culpa and make a deal so they he sort of kept it to himself and i think when brady moved in it was brady or the fed moved in or the treasury department they were very much at risk of losing their ability to trade governments it was going to be taken away from them and i think juan had to step in in a very short period of time i mean it could have been 24 or 48 hours and he made the decision that he would step in it certainly redounded to his benefit because he came out very well but it was a heartbreaking thing for a while warren as an analyst went down to washington one weekend and i mean lo and behold he knocks on the door of this company and you know nobody's there in the office and finally some watchman answers the door and says what do you want more and says you know i'm i'm a research analyst and i'd love to interview the speak to the president so he by chance he was in his office upstairs and juan went up to meet him and he was enthralled by this man and the man spent the better part of the day talking to warren about the geico and what a good business the insurance business was and of course under warren's aegis years later geico became a much much more important business and really went all out in the mail order business and made it very very efficient but what warren likes about any of those businesses is that he has a fair amount of money that's sitting there as supposedly as float and he can use the float to invest in other things so geico was making after had a very low expense ratio because they were very very efficient at geico at the time and they became even more efficient and the expense ratio was low compared to all the other insurance companies so they were earning money when it was difficult for other companies to earn money and in addition they had this big reservoir of money that was float now the float in the in the automobile insurance business is not as good as the float at the other companies that he has but it's substantial and it adds up into what is a large float of free money that one can take to buy businesses and to invest so it's a twofer as far as i know charlie had a man working for him who had been i think a petroleum engineer and charlie and warren were approached on seas and they were going to make an offer that was below what seas wanted and this man piped up and said you know you're doing the wrong thing this is a high quality business it's going to have substantial growth there's plenty of leeway to raise the price on chocolates and you really should raise your bid because you buy you're not buying an asset you're buying a name you're buying a brand you're buying a real franchise here so they did raise their bid and they bought it and of course looking back it was the start of buying good businesses at relatively favorable prices and charlie was more responsible for that than anybody juan has this i shouldn't say theory it's a it's not a proverb either but he he has a strong feeling which he communicates to all of us that if you buy a good business and you stay with it for a long time you're going to make a fair amount of money and that's really what what berkshire is and what some of the companies that mars bought i mean he's made a lot of money buying coca-cola even though it's now substitute criticism he's made a lot of money in american express doing that he's made a lot of money in a lot of companies and i think that all of us learned a lot out of that seize probably 1972-73 for some reason new york times went public with a restricted stock an a b and a whole group of previously privately owned companies also became public and the stocks all fell down market was going down and these stocks went down and washington post went down substantially from its initial offering price so juan started to buy some stock and i must say you know warren is very good about sharing his thoughts with people and directing them in in various ways and he had he had talked to a whole we i mean carol i'm sure told you about the group meetings that we had and he had talked about you know the value of broadcasters the value of newspapers etc he saw real value and in these newspapers and also not only the franchise value but the thrill of being involved in a newspaper like washington post and kay graham had some advisors in those days that were on the board that checked worn out and here was this young guy that was buying a big piece of washington post and they were very very suspicious about it i had my wife and i happened to be out in california we visited with warren during the summers then he had a place in laguna and we would go out and we'd play golf and we'd go out at night with susie and occasionally with charlie et cetera and wine had invited kay graham out directly she was strong enough to say to herself i'm not going to listen to all my advisors i want to find out for myself so she came out to california and she met him and i remember i was there at the time and this is a story you won't get for many people but anyhow juan started talking to her and you know when juan starts to talk he he's very convincing and he can talk for a long time so she she looked out the window and here's this beautiful beach and beautiful it was a beautiful u-shaped cove and she said i think i'll go for a swim so she changed into a bathing suit came downstairs juan started the conversation again we walked down to the beach i was i was there juan is fully dressed he started walking into the water and warren doesn't swim and he doesn't go in the water and all of a sudden when he got up to his waist he realized he was in the water and he turned around and went out but he was thrilled by her visit and i think she was very taken with warren from then on so she didn't listen to her advisors at all my brother threw a small birthday party for me at the hotel uptown and there were probably 35 or 40 people there good friends and warren and susie came suzy sang and then there were a lot of toasts afterwards and warren's toast was may you live to berkshire splits and that was 30 years ago and so far so good i'm here warren hasn't split the stock so that's made a big difference in my life because i think about that often well i mean if bill rawain was here he'd really tell you about it but you know susie was interested in singing in front of various groups and she was going she would she was willing to go to various nights semi nightclubs in new york and sing there maybe it was for the experience or maybe she wanted to do it because she enjoyed it but anyhow they would come to new york and bill would arrange for her to sing at various small little clubs and we would go and listen to her but she loved it and bill really killed himself setting up those dates for her and i think juan was very proud she had a very wonderful voice yeah and she had a good scent she sang the oldies really you know show tunes that sort of stuff warren like nobody else i know has had an enormous loyalty to all of us there's nobody that he's ever turned his back on that i know of the group that we had maybe warren outgrew many of the people in it uh but he never abandoned anybody and he always inclusive and he was very very loyal we had a group of eight of us that would go out to the west coast and play golf at pebble and three other golf clubs over a four day period and juan was getting busier and busier and busier but yet every every two years he would show up and he would play golf for four days even though it wasn't his greatest interest in the world and as far as the meetings that he had he was meeting all of famous people in the world and everybody was coming to his doorstep but he remained very very loyal to all of his friends and of course that group that carol described to you was composed for the most part of people that he knew starting back in the 60s so i i don't know anybody like that that you know he could he could get down to the president's home at any time he wanted to and in fact there's some great stories he he was invited out to ray he was invited out with reagan to walter annenberg's home in palm springs walter annenberg had this house that was a fairly well-known house evidently it's now an institution but uh he would invite various people down for weekends and you know warren was getting to be very big in the newspaper business and he was a great investor and so walter wanted to cultivate juan so he invited him out when he had reagan who was then president for the weekend and why went out there and there were other people out there too and everybody had their own room and they had attendants that were helping them you know unpack and pack and it was it was all very very very uh impressive and luxurious so walter had a nine-hole golf course that he played as 18 holes and every single ball on the range that they used was a brand new ball it was never hit twice just one trip on a ball so annenberg with all of his friends said to his friends who were there golfers saying i've reserved starting times for you across the street at one of the courses i forget the name of it could have been thunderbird or one of those he says it's too crowded over here so walter and reagan and warren went out to play golf on this golf course they were the only ones but it was kind of cute that they he sent everybody across the street said it's too crowded but so juan had some good stories about his various things and i mean warren could go any place he wanted to by that time but he was extremely loyal to every one of his friends we never bought berkshire directly we got our stock through diversified the same way as charlie got most of his stock and i don't know of a better investment for my children and my grandchildren and maybe a couple people that come after it than berkshire as long as the culture remains the same and that's the most important thing and i know that the people who are coming along and that we're thinking about as potential replacements for warren someday have a very strong sense of culture and have a very strong sense of obligation to warn and everything warren stands for so i have no doubt that you know for 25 years afterwards the culture isn't going to change and meanwhile you own a group of companies that are extraordinary and maybe maybe new management will do a few things that warren might not have done but otherwise they're going to be very strong value-oriented people and very decent decent honest individuals you know anytime warren says something you can take it to the bank and i think people understand that and but but i think berkshire really stands for culture is complete decency and honesty yes there was a time before warren made his big gifts to the gates foundation that he was getting criticized and you can see it in the blogs that were written back then and some of the letters and other things that here was this very very rich man who was getting richer every year and really wasn't giving a lot of money away and there was terrific criticism by some people which juan never said anything about and didn't answer but all along people were getting very rich on owning berkshire particularly those people who started out in the early days with a few dollars in his partnership and i mean there were ins they're still instances of where you've got this man in who died a couple years ago in brooklyn who came from uh he was a professor at brooklyn i think polytechnic and he left a fortune of seven eight hundred million dollars nobody ever heard of him before but he had been a partner of the of the original partnership put a few dollars in and you know had given most of it away he didn't have any children and there was a there was actually a rabbi in in in omaha it was a great story his name was kripke and his wife met susie because his wife was drawing children's books and susie met her because she was interested in the books and so she called up and she met her and then she thought she was charming and so they started playing bridge at night with once a month or once every couple weeks with the rabbi and his wife and they had a very strong friendship and the wife said juan was young and running the partnership warren said to the rabbi i mean his wife said to the rabbi you really should put some money into the wine partnership because you know his brilliance always shone through and the rabbi was very reluctant because this was his retirement fund but finally he did put some money in very small amount and when he retired he had a few i think he had a son i don't know who else he had i think he's still alive in that he's in an old age home in in omaha but he had given nobody thought he had he i don't think he ever made more than fifteen or sixteen thousand dollars a year as a salary but he gave something like 30 or 40 million dollars to the seminary in new york for a brand new entrance hall and research facility i think and nobody ever heard of them before and these people are all popping up all over and i heard a story about somebody the other night who made a large gift somebody who really was quite poor and and had come over they were a holocaust victim they had put a few bucks into warren's partnership and uh they gave hundreds of millions of dollars to some university and you hear about it all the time where i know in my case i mean i thank warren all the time because i well i don't give away the berkshire that's sort of sacrosanct but it's made it possible for me to make a fair amount of major gifts that have brought joy to the whole family so i think it you know wants influence on giving things away and charity has been a real leadership position and people just don't appreciate it that much and you know the i think what he's done with his children is terrific i mean you spoke to howie and you spoke to some of those they've all thrived because they're running these foundations and are able to give away money and i mean warren's influence is strong and he spends his time the way he really you know he's got only so much time and he spent his time very carefully but he he feels that he has delegated gates as the best person possible to run a lot of his charitable activities and i think he's correct but the amount of money that he's made for other people because of berkshire is extraordinary and all that money is being given away over the years and all those remarks about them years ago were just absolutely incorrect i did not realize the severity of it at when it started but i was in omaha for a meeting and warren was getting calls left and right from various companies that were neat you know that had a lot of leverage and needed funds and in those days he would had the opportunity to buy extremely high yielding preferred stocks that were convertible or had warrants in some very good companies like goldman sachs and a host of other companies that made a lot of money for berkshire in the long run but i think that the severity of that decline at the time and the crisis and the what's happened with housing ever since and the effect on employment was not i i didn't see it coming as strongly as it came and it turned out to be one of the most serious events we've had outside of the depression in 29 and i think warren and charlie both handle themselves extremely well warren always has this wonderful view that you get greedy when other people are you know fearful and you get fearful when other people are greedy and certainly he used that opportunity to build the bill berkshire and of course berkshire is a fortress it's impregnable as far as the financial condition but i think the the country was in serious trouble and i mean i'm not an expert economist but this the fact that interest rates have been coming down and down in fact there are almost no nothing now is still a reflection of the unemployment and the housing and all the things that are the aftermath of what happened back then incidentally warren has a great expression about macro people that you know have a real macro feeling and i've never forgotten it he says there's a place in the cemetery that's reserved for all those people who think they can see what's going to happen in the market well i think his message has always been very optimistic about the united states and the place of the united states and the world and the place that you really should have your money because the united states is growing and things are so good here in spite of all the problems and everything else and i think he fundamentally believes it like nobody else that i know so he's a strong believer and a strong salesman on that in so many ways juan has been an enormous influence on me and on our family and for example even though the family some of the family doesn't care about business at all they all have made the trick to omaha they all know warren they all think the world of omaha of warren they have tremendous respect for him and his values i use some of wine's material i send it to the kids so that they can read what he has to say about you know about life and i think he's had an enormous influence on my life and my wife's life he's made it much more enjoyable we've loved some of the friends we've made because warren has one thing that warren does is he brings everybody together and he shares everybody he doesn't keep anything to himself so all of warren's friends you know i got to meet early in the game and murphy and burke and all these other people that we know fairly well the loomis etc all came out of being involved with warren so it's been a wonderful experience it hasn't hurt me from a business standpoint either i mean you know it's it's it's very nice there's i mean i i'm very careful about the way i handle myself and uh not to you know impose on any of warren's reputation but still in all it it rubs off warren doesn't forget anything he ever says and you know warren's gone way beyond anything that i can handle but when we sold diversified i was vice chairman and charlie was the vice chairman primarily because of our ownership and juan said to me look come to berkshire you can become a vice chairman just like charlie and we're happy to have you but he said there is a conflict if you if you stay in the money management business and you're going to be buying these stocks you're going to have to report everything you buy and i'm going to have to report everything i buy and they're going to combine them and it's going to be a problem so i said that's fine warren i don't need that so he said if you ever get in a position where you're out of fresh manhattan my offer stands so after susie passed away which is now well over 10 years ago i guess i think the world changed as far as wyoming was concerned and again loyally has been very important and integrity again and so juan came there was an opening on the board and warren came to me and said would you like to be on the board now so i said you know i'm going to jump at this opportunity but let me think about it overnight so warren said to me you know he said you've been a very private person and the minute you go on the board you're going to have to start reporting so by that time i had given away some of my berkshire family and i thought about it and i felt that the advantages of being on the board versus you know not being on the board were substantial and i said great so that's another example of his great loyalty oh look there must be 30 books out about warren right now and warren's influence on the in on the investment world has been unbelievable certainly he deserves much more credit i think than than ben graham although ben graham has been idolized because to some extent warren has pushed that but i think wine's influence is far greater today and i think for a long long time that influence in the financial area is going to be felt i'm not so sure that you know any gifts he makes or any gifts that the kids make are going to he's not a he's not a guy who wants to put his name on a lot of things and he's not somebody who you know wants to create institutions in his image so there isn't going to be anything like that or at least it doesn't look like it right now so i think he's been you know there's a whole generation of people who've grown up and they've gotten to know warren either going to the meetings watching him on cnbc or just going to the sessions that he he invites these 10 or 12 colleges out there every year and he talks to them and he he's really in the teaching business he may be in the investment business but he's also in the teaching business and he shares his he shares his advice with all these big executives that go into these companies when immo became head of ge i would say the first thing imel did was fly to omaha and talk to warren and i think that goes on all the time and barney gives him great advice so from the standpoint of naming a university or a big charity after him i don't know that anything like that's going to happen of course it's up to the children to some extent but or maybe bill gates who loves them absolutely loves them so but i'm sure some kind of an important thing may be done

Channel: Kunhardt Film Foundation

Views: 6,432

Rating: 4.9741936 out of 5

Keywords:

Id: 7WGC69B3tWE

Length: 63min 31sec (3811 seconds)

Published: Tue Jul 20 2021