Warren Buffet's Life Advice Will Change Your Future (MUST WATCH)

[Music] seventy years ago I was in high school almost a third as long as the country has been around and when I was in high school I really only had two things on my mind girls and cars and and I wasn't doing very well with girls so we'll talk about cars but let's just imagine that when we finished I'm gonna let each one of you pick out the car of your choice sounds good doesn't it pick it out any color you name it it'll be tied up with a bow and it'll be at your house tomorrow and you say well what's the catch and the catch is that it's the only car you're going to get in your lifetime now what are you going to do knowing that that's the only car you're ever going to have and you love that car you're going to take care of it like you cannot believe now what I like to suggest you're not going to get only one car in your lifetime but you got to get one body in one mind and that's all you're going to get and that body of mine feels terrific now but it has to last you a lifetime it's the important thing is to decide what is to be able to define which ones you can come to an intelligent decision on and which ones are beyond your capacity to evaluate you don't have to be right about thousands and thousands of thousands of companies you only have to be right about a company couple I met bill gates on July 5th 1991 we arrived Seattle and Bill said you've got to have a computer and I said why and he said well he said you can do your income tax on it I said I don't have any income Berkshire doesn't pay a dividend yeah he said well you can keep track of your portfolio I said I only have one stock I said I did I mean he says it's gonna change everything and I said well will it change whether people chew gum and he said well probably not and I said what will change what kind of gum they'd show and I said well then I'll stick a chewing gum and you stick to computers how bad I don't have to understand all kinds of but there's all kinds of business I don't understand but there's thousands of opportunities there I didn't understand the Bank of America you know and and I'll be able to do that I'm able to understand some given percentage but Ted Williams wrote a book called the science of hitting and in science of hitting he's got a diagram it shows him at the plate and he's got the strike zone divided in the seventy-seven squares each the size of a baseball and he says if I only swing it pitches in my sweet zone which he shows there and he has what his batting average would be which is 400 if he had to swing at low outside pitches but still in the in the strike zone his average would be 230 he said the most important thing in hitting is waiting for the right pitch now he was at a disadvantage because if the count was oh and two or one and two or so on even if that ball was down where he was only going about 230 he had to swing at it in investing there's no called strikes people can throw Microsoft that man you know you name it any any stock General Motors and I don't have to swing and nobody's gonna call me out on call strikes I only get a strike called if I swing at a pitch and miss so I can wait there and look at thousands of companies day after day and only when I see something I understand and when I like the price of which is selling then if I swing if I if I had it fine if I miss it that's it's it's a strike but it's an enormous ly advantageous game and it's a terrible mistake to think you have to have an opinion on everything you only have to have an opinion on a few things in fact I've told students if when they got out of school they got a punch card with 20 punches on it and that's all the investment decisions they got to make in their entire life they would get very rich because they would think very hard about each one and you don't need 20 right decisions to get very rich you know four or five will probably do it over time so I don't worry too much about the things I don't understand it if you understand some of these businesses that are coming along and can spot things on if you can spot on Amazon for example I mean it's a tremendous accomplishment what Jeff Bezos has done and I tip my hat to me is a wonderful businessman he's a good guy too but could I have anticipated that he would be the success and ten others wouldn't be I'm not good enough to do that but I don't fortunately I don't have to you know I don't have to form an opinion on on Amazon and I did I did form an opinion on the Bank of America and I form an opinion on coca-cola I mean coca-cola has been around since 1886 there's 1.8 billion 1.8 billion 8 ounce servings of coca-cola products sold every day now if you take one penny and get one penny extra that's 18 million dollars a day and 18 million times 365 is 7 billion 3 less 730 billion or 6 billion 570 million dollars so annually 6 billion 570 million dollars from one penny do you think coca-cola is worth a penny more than you know Jo's Cola I think so so you know and I've got about 127 years of history indicated so those are the kind citizens I like to make and you may have an entirely different field of expertise then I would have and probably much more up to date in terms of the kind of businesses that we're seeing about and you can get very rich if you just understand a few of them and understand their future what is it that you to share what makes this friendship so satisfying for both of you well I think we both certainly share a curiosity about the world and we come from two different but related worlds so we had probably spent about 10 hours of this one-hour visit that bill was scheduled on July 5th 1991 his mother had to talk attend to it and we weren't halfway I mean we've got no place in terms of our eventual agenda just in that time in fact the governor of Washington came by and bills that had to come into the bedroom well we have fun to start with I mean that every relationship should have a lot of fun in it and and we we find the world in just such an interesting place so we like to compare notes on it when we compare notes we have a lot of fun doing it part of the time as I remember the conversation by the way there's a remarkable documentary about Lauren which is on HBO I think it premieres on Monday 30th on Monday you should take time to take a look at it bills involved in that and and you will see in a sense its call I think becoming more Buffett yeah that's what it's called because so be 86 years you're doing well on it though well so far yeah that's yet to come yeah one of the things that happened in I bill was it I guess your dad at the dinner said you know what does it use what's been the most important quality for you and you found out that you and Warren had the same word yeah I think curiosity which Warren mentioned is a an amazing thing where you try and predict what's going to happen and then when it doesn't you sort of think well you know that drug didn't get invented that stock could go up that approach wasn't popular what's what is it about my model of the world that's wrong you know who could I talk to what could I read and and the things that have happened since 1991 mostly good things have been amazing and just you know so much fun to talk about you know so you know it we read the news and we think god what did warren think about that you both are readers you both you read all time all day warren bill you're a reader you also do a lot of sort of courses online as well what does that have done what is that done for your life a sense of constantly learning well glad bill it's an incredible time to be a learner I remember when I was young and I had the World Book which is one of Warren's products and it was very good but yeah I always felt like god I want to get into this more depth I wonder if kind of better today the videos that are online and the courses that you can buy with the very best professors it's phenomenal you know take a subject like weather or climate change or what's going on in economics what's known what's not known now with the foundation a lot of what I need to learn it's about biology making vaccines and what's going on with these these various diseases this is a phenomenal time to be a curious person the information that's out there you know I my my biggest problem is that I stay up too late because I'm reading and then I'm a little bit tired the next day the other thing that you share other than reading is optimism you believe in America absolument you know you have said to me more than once I would give up a year of my life just to know what the next fifty is gonna be like yeah even like for now I mean why'd you pick for number that came to me fascinating what's happened just in my lifetime you know 86 years I I should mention one thing about reading it was at the library here at Columbia which I spent probably more time than any other student I lived there practically but and I pulled the book out there happen to be who's in America and it told me something about my professor Benjamin where I am and then I looked up and I went to the library and I said I want to look more learn more about this because I learned this over here that changed my whole life you know we owned I go now because of that library and directing me there's some other book and then following through on that it's the chance I I read about one-fifth the pace the bill does but I still spend five or six hours a day reading I mean it just you can learn so much I particularly loved biography just you know to be able to live the lives of these people have been extorted seem so extraordinary the lessons and those you know the discouragements they face just everything about it so I did you can't get enough of reading what surprised you most about bill that's an interesting question I guess what really surprised me initially we just found so many things to connect on he did try to sell me a computer that way that's probably the only sale he didn't make all that computer changed my life for the better in a big way subsequently but well he he just had the same curiosity and the other word you have used his focus well the focus there's no question if I mean he both of us got to where we are in a big big way because of focus and Bill what surprised you about Lauren I was so amazed that he comes to investing with this broad model of the world so one of the first questions he asked me was a Microsoft's a small company IBM says company why can you do better why can't they beat you at the software game airplane and I always you know you know every day I was thinking about okay what advantage do we have what do we do but nobody ever asked me that question and we talked about the economics of software which is a very different and special thing and he could relate it to things that he'd seen and you know I didn't understand banking why some get ahead and some don't and so he was able to put that in very clear terms and so I I found somebody whose model was rich enough that it helped me understand things that I really wanted to know and we could laugh about things that were surprised to us I'd say his humility in this sense of humor really stood out in this incredible way I mean he enjoys what he does and he shares that with other people and even you know when I ask questions that are pretty naive that he's probably been asked 15 times he's very nice about well it took me a long time to figure this out bill but here's how it works I tried bill out with some non-transitive dice and I'd read about him in Scientific American or some places there were only two people in the world in the history of these dice that actually figured it out while I was trying to take their money from them and one was the leading symbolical audition in the world and the other was a drunk who didn't really know any better that's the one question but bill said wait a second you choose first and the game was over and you taught him not you didn't teach him but you brought him into a great appreciation of bridge yeah he played bridge but the family is very big on games his family was very very big on games and and and so we we played bridge together and we played in China going down rivers we're supposed to be looking at the scene we had a good time yeah all right we've got a lot of questions won't talk from the audience somebody we want to start up ending up in the balcony so we so you know we haven't forgotten you it's hard to see but is there a number there that has a question okay start it wherever it is yes number six thank both of you guys for being here today my question is in regards to public health and vaccinations given our current private presidents publicly stated stance against the use of action Nations both in this country and abroad how would you recommend that we as students and future leaders in health sciences best allocate our resources to most effectively resist his alternative fact political philosophy in regards to domestic and global public health thank you but bill that's a good place to start yeah well the facts about vaccines are very clear and very strong which is both that they're safe and that the vaccine schedule has been designed to reduce disease and you know the more parents that adhere to it the more not only their children be protected but you have some kids who are immune deficient so unless the kids around them are protected then it puts those kids at risk and there are diseases like measles or pertussis that all it takes is a small cluster and then mostly those diseases would be coming in from overseas but you can get infection in in some European countries you've had deaths because the kids weren't vaccinated I don't think the US government is going to come out with any negative statements there may be a commission and fortunately if you look at the facts the facts are quite unequivocal we certainly are speaking out in favor of vaccines so I I you know I'm a little surprised that we have to stick up for them but it's true in every country that you get these rumors and particularly in today's media those rumors can get out and ahead of the facts because the rumors are sort of more salacious or you know contrary to what you've been told type things here I'm sure we'll have a chance if necessary to go through the facts again and and get a clear positive message from the government and the risk is if vaccines somehow people are scared of having vaccines the risk is well there we're engaged right now in polio eradication and the only way that succeeds is to get 95% of the kids to have these vaccines and there we found we ran into a form of anti vaccine sentiment that even worse than us rumors and that is that two terrorist groups one in Nigeria Boko Haram and another one in Pakistan Afghanistan Natale bond said that vaccination was a u.s. plot and you know would sterilize women and it was a very bad thing and they took the women who are going out to the children's houses and giving these oral drops oral polio vaccine and actually killed a number of them and so those negative rumors the only reason we still have polio today that were not done is because of that part of Nigeria that Bokke roms caused unrest in the border areas including Baluchistan in Pakistan where there have been these anti vaccine sentiments so you know our risk is is simply those negative things so it's not just in rich countries that we run into this it absolutely is causes deaths if parents don't know bring your kids in and get them fully vaccinated and your drive to eradicate polio is to show that you can't do it well it'll be it started in 1988 when it already had been eradicated in the Americas so these were the for the u.s. in the 60s the rest of the Americas and the 70s showed that it could be done and so in 1988 well before our foundation was involved rotary and a number of other organizations said let's get rid of this and it's been harder than what's expected just because of these these sentiments you know here we are in 2016 a 17 last year less than 50 cases so we are very very close in fact there are so few cases now the way that we track where the virus is is we go and look at sewage samples and we see because a lot of kids get infected and pass along without getting paralyzed and so it's only through the sewage samples we know that there's still about four places in Pakistan and Afghanistan and and one place in Nigeria that we we have gotten there yet all right let's see the next question I got to see a car number one thank you both so much for being here my question again sorry is a little bit on the political spectrum I was wondering what you're both most hopeful about in this new political environments we have and also what you're both most worried about you want to take hope of worried more well I'm I'm confident there America will move ahead it's been no the time I was born until now the real GDP per capita this country was one of six for one I mean nobody ever dreamt that would be possible and when you look at what's happened in this country over two hundred and forty years you know it's an absolute miracle when I went to come be a business school September 1951 woman in the class I mean that this country moves forward and you can't stop it so I'm enormous Lee I say the luckiest person or in the history of the world was the baby being born today in this country and we will go and you know everybody half the country always is going to be able to somewhat unhappy close to half about the last election but I grew up in a household in the late 1930s my dad was very Republican my sisters and I didn't get dessert unless we said something bad about Roosevelt I mean it was just it was required and I heard all these apocalyptic views about after his third term don't be no more elections I've been hearing that all my life and you know year after year after year with occasional hiccups and and an occasional seizure like we got in 2008 at nine but this country it's all profit folks I mean you know when I came in just thinking what it would've been like in 1776 nothing here and now we've been the velocity of change oh yes moving I mean guys like Bill you know they don't quit you know I mean he he moves on to something like polio he mentions 50 cases in the world there were more than 50 in the ward where I went when I was a teenager to see a friend of my sisters and they're all in these rocking machines and everything they were destined to a terrible terrible life and it was just one ward in Omaha and and now that's you know that's the yearly total thanks initially the as well as currently dubrow tourism but people kept working out this world moves forward and it's been doing I bought my first stock when I was 11 in April in 1942 the Dow was 100 you haven't looked it's 20,000 something good must have happened and it's gonna keep happening folks bill I know you fear the optimism what about concerns well the optimism is partly that I think American innovation is strong you know support for research is by and large bipartisan and so there its health breakthroughs or even energy breakthroughs I think you know every year that goes by we're going to have more of those things now this administration is new enough we don't know how their budget priorities will come out you know there are things like foreign aid which is a small part of the budget about 30 billion a year but that means the u.s. is the biggest that every time there's new leadership we have to go in and articulate the benefits it's well spent it's not the image that people have in the past and so right now I think there's a lot of intensity to make sure we get that message out and get both in terms of the executive branch and the Congress to maintain amazing things like the president's malaria initiative or PEPFAR which is an HIV thing these things started under President Bush and so our foundations had a great working relationship with Democratic and Republican administrations most people wouldn't realize that US foreign aid as a percentage of the economy which is generally how its measured reached its low point in 1999 under the Clinton administration out I'm not saying as the administration it was a mix of the administration the Congress then during those Bush years it went up fairly substantially now the economy helped with that but these initiatives were really amazing and you know I'm hopeful that maintaining or even growing these initiatives will be a priority when there's a lot of talk about tax cuts and different spending activities and so it is a bit up in the air during these months ahead and you've often made the point that no matter how big the private contributions are sometimes in terms of tiers sheer scale you need a government yeah somebody asked me Bob today you know if PEPFAR which is this aids program was cancelled when private philanthropy make up for well pEPFAR's over five dylaney or that is this one aid program which is a phenomenal thing that's saved over ten million lives that's larger than our foundation which is the largest in the world so there's no possibility the government sector US UK other European donors that's a hundred and thirty billion dollars here in coal that's uplifting these poor countries in health and education and if we lose the consensus around that if people draw inward too much the we will hurt progress and there will be millions of lives lost because of it all right one thing that might be mentioned charlie is that the difference between now and sixty or seventy years ago in the ability of really bright people really innovative really energetic people to get financed to do things is it's just dramatically better than than it was at that time so now if you've got good ideas and there's good ideas right in this crowd and you've got energy it's far easier to get financed to move forward those ideas then you couldn't fifty or sixty years is that because of the internet or crowdsourcing of what is it just lots more capital now and people more optimistic about people were very optimistic but better ways to connect the town and the capital and absolutely it's dramatic willingness to take risk you know the first venture capital stuff is in the 1960s and it's tiny Microsoft when we were taking outside investment we took a and evaluates from twenty million dollars we took a million dollars for 5% of the company I'll do it retroactively you had your chance you had your win we we we never spent the money that is our business was profitable enough we really didn't need to do that but we wanted people on our board to give us advice and there's an episode of Silicon Valley where all these venture capitalists are are courting this guy and that really reminded me of what it was like by that time which was 1984 there were dozens of venture capitalists and that's something that other countries have tried to duplicate they have in small part but not nearly as well this this willingness to take risk I did that if you have a failure it's not a mark of shame that hey what's your next startup gonna be you heard the secret folks he gets his ideas from Silicon Valley be sure yeah all right cards let's see where the cards are okay number three take the cart right there this talked about how you'd able to make a model and it won't accurately predict what happens and on the other side of the coin I was wondering what happens when you create such well-developed predictive technology and what are the ramifications and implications of that outcome well I don't think our predictive technology you know it's gonna be like an Oracle warrants nickname is the Oracle of Omaha but you know the the percentage of times you've converted things like macroeconomics because they involve emotional sentiment you know we're a long ways away from that the biggest modeling thing I'm involved in is a group that models diseases so we look at HIV or tuberculosis and understand okay what do we have to do in terms of diagnosis and drugs to get these things down once we finish polio will go on and our next big challenge which will take decades but I expect will be done in my lifetime is malaria eradication so these models aren't nearly at the point where they can take human sentiment into consideration you know the field of economics a very basic question about what we should have done differently before the financial crisis there really is no consensus whether it's with the public or inside the profession of economists they agree that some of the emergency treatment we did was necessary and important and you know I wish that was was better understood but the in terms of the root causes it's actually a little disconcerting how little our models are understanding explain how that imbalance got so extreme all right well number two didn't you in school here at Columbia and I wanted to ask you were talking about that you love reading I wanted to ask you if you have a particular book that it changed your life like the way you think about things and I also wanted to ask um what is the thing that you I'm admire the most about each other I do bill about Warren and the other way around thank you they sort of touched on the on the second question but going to me when I add to it books though first changed your life well a book did change my life and it was a bio fellow who taught here at Columbia and that Benjamin Graham and I read the book when I was 19 called the intelligent investor and I I had been interested in investments since I was maybe seven or eight but I never and I'd read every book in the public home all public library but why do you think you were interested in investing when you were seven or eight because I was too dumb to get interested in for my dad my dad had a very small investment firm and I was just gonna read all the books that he had there waiting to go to lunch or whatever it might be and then I went over the public library in front of all and and it just was a fascinating subject to me and and but I didn't have any I I knew but everybody thought all of that at an early age but what Graham wrote made sense I just happen to pick that book up at a bookstore in Lincoln Nebraska but but to investing per se did is there something about your core competence that made investing the perfect place for you to be yeah I mean I looked it was a question of zeroing out all the other in competencies I was left with one thing I was actually wired in a way that was this would be something I would be good at what so what wired in what way I I can't tell you precisely but I I've got the right temperament for it which is more important than IQ if you've got more than 120 points of IQ so sell the rest of it somebody else you don't need it investments but you do need the right temperament you do it you do have to be able to think for yourself and getting back to you know the earlier question the first question I asked myself when I look at the businesses you know is it important and easy what I couldn't determine about this business and a lot of them don't make it now bill is looking for hard questions that that plagued society and where intellect and money may make a difference they may not for a while and but he's taking on the tough things I take my job is to find easy things I'm looking for one-foot bars to step over you know rather than 8-foot bars to jump over okay and but that's not irrational if you're if you're looking at the investment universe but reading is key it on the biography on the on the book thing I know I will tell you a wonderful book to read I can tell you a number of intelligent mr. wood obviously if you're in the investment field but Katherine Graham's autobiography there's a Marvel smoking that's absolutely honest told by a incredible woman who had an incredible life and then wrote honestly but and and someone who you knew very well and interested with and and she was a bit reluctant and had to be assured yeah you know that she was afraid of me actually look what makes that book so much it just it is such a broad range of human experience honestly told I mean you couldn't have a nobody in Hollywood could write up you know a scenario that she lived through and and just just see that world develop how she reacted to it every night you can learn so much my partner Charlie Munger just loves Ben Franklin you know I mean he I mean you know it you can learn from other people and and their mistakes and and I find me a biography was my favorite part of the reason you love biographies Barney part of the reason you love biographies where is a card right here just come here I'm having a hard time seeing the card so that right here she where the hands are raised I'm a senior here at the college I'm also getting them scholar my family over here I'd like to ask so what both of you doing Ross a lot of risk and sometimes you have to face the fear of failure with that risk so I'm asking how did you overcome that fear and what steps did you take to do that well I think I was very lucky that when I was in high school the computer was brought in there and I developed a fascination for it and became kind of fanatical about it so that you know I didn't view it as risky I viewed it as this kind of fun hobby even when I went to college which I didn't finish but I spent time up in Cambridge Massachusetts the I wasn't sure that would be my life's work now as the chip came along and made it mainstream it became very obvious that something dramatic was going to happen and so my my passion my hobby and the area I could start this company right at the beginning of the the revolution that coincided in a nice way and I never felt it was risky I you know if Microsoft had failed I didn't have kids or anything I could go back to school and you know finish my degree and you know go get a job somewhere I was very risk-averse in in running the company I always made sure we had enough money in the bank to pay everybody for at least a year if nobody paid us at all because this idea I was hiring people who had kids and families and they were moving to work there and here I was you know 19 20 years old and sort of telling these people I'd be paying their salaries so I I was actually very conservative on a financial point of view and one of the few arguments I had the Steve Ballmer who came in and played a phenomenal role in the success of the company was how many people could he hire because I was trying to be so conservative but I let him go full-speed and you know it turns out our financial success meant that we never had a conflict about that but you know I think it's great to be risk-taking particularly when you're young trying out different things fields that you know aren't very popular that you might enjoy but I never got into a position where I I was taking him actually in any meaningful sense I was taking a big risk coming the risk of you would not to have acted because you felt the train was leaving the station yeah and it was so clear that you know this was gonna happen this was so much fun I mean you know I was a fanatic I didn't believe in weekends I didn't believe in vacation my mom had to negotiate whether I'd come once a week for dinner no matter who the guest was that's right but Warren you have often said you still tap dance to work average you can paint with your own colors yeah I I get I'm just excited about tomorrow in terms of what is gonna happen as I was when I started I was having a lot of fun when I started but I'm having just as much fun now and and I was when I was here at Columbia I had this terrible third I was impossible for me to speak in public I mean I wasn't able to do it I actually read an ad Newark times I went down to midtown signed up for a course gave the guy had checked and then stopped payment on the check I mean it just I just petrified but finally I and actually after you get through here hearing me today maybe you'll wish I'd stayed afraid of public speaking but that's another question then when I got out to all my I finally decided I just had to do it so I gave a guy a hundred dollars in cash and once I borrowed another dollars in cash I jump off the Grand Canyon to get my money's worth so but it change it changed my life but I would say this don't fear failure almost everything that's turned out I got turned down by Harvard - the best thing ever happened among other there's some good things that happened it seemed good at the time don't worry about and don't don't let it eat as you look back just keep going because you're gonna have some things and forget them go forward I want to go to the back of the room right back there wherever number three is hi my name is Matthew man I'm a first year at Columbia Business School both of you had a moment where you went out on your own and I guess my question would be if you were to do it all over again you're in our shoes what industry would that be in where would you start your own business today I do the same thing yeah one thing I'd be a failure than anything else probably no I mean I've had I had fun one is it my 20s my 30s now I'm 86 I'm having fun and so I I advise students as much as possible look for the job that you would take if you didn't need a job I mean don't sleep walk through life and don't don't say it's all gonna be great you know I'll do this and I'll do that you know I'm just marking time don't need to be older that I've told people that's like saving up sex for your old age I mean it is not a good idea yeah what are you urging them to do guess what I'm talking about [Laughter] you really want to be doing what you love doing and you can't necessarily find it on your first job right but don't give up before you find it bill you've had the unique experience pick a because if you curiosity because of your involvement in global health to see the impact of a lot of other areas whether it's biomedicine or whether it's you know a whole range of other things other than computer science if you were gonna drop out of Harvard today know which field would you be most likely attracted to well I love the hard sciences and there's some phenomenal things that people will get a chance to be part of I'd still probably pick computer science because the work in artificial intelligence today is that a really profound level you know our ability not just to play games but that is a profound milestone the alphago work that the deep mind people at Google were able to achieve and that kind of technology is and all the leading companies a lot of universities with AI creation of agents the ability to read and understand material it is going to be phenomenal so anything connected with that I think would be an exciting lifetime career I also think in energy we have the imperative to have energy that's reliable cheap and clean and no system available today can provide that whether it's for rich countries or for for poor countries and so the innovations there will be profound and there's many paths that could provide that solution finally I think biology it's the most thrilling time you know we are going to figure out obesity cancer even things that are very hard like depression because the you know the mind is is is even more complicated than other parts of the body I see this through the lens of the disease of the poor the infectious disease where new vaccines new drugs we are moving faster than ever and some of these are platform technologies like DNA vaccines that are gonna give us just that one thing will give us lots and lots of solutions and so working in that space is is phenomenal now I say this you know to my children and you know they they may not want to do hard sciences the the one who's picked wants to counsel patients and and be a doctor and even more than the science piece that relationship with patients is what grabs her so everybody has their own taste but in terms of big impact those three hired science problems would be at the top for me alright next right here right next to number one hello thank you guys for being here also thank you to mr. gates I'm also a good scholar and without your foundation I wouldn't be here many industrial based communities have been severely affected with higher levels of unemployment due to the increasing utilization of automation which ends up displacing workers what do you believe it what do you believe is a possible solution to unemployment arising from automation it's a good question now because there's a lot of talk about globalization and all of that and a lot of other people step forward and and talk about how technology and the impact technology is having on jobs and and the demand for new kinds of skills yeah we were here at 1800 and conducting this and somebody would point out that eventually tractors would come along and and better fertilizer and everything and that 80% of the people are now employed on the farm and in a couple hundred years it's gonna be two or three percent and what are we gonna do with all these people we'll the answer is we release them we Keynes wrote something about it in something called essays on persuasion he wrote in 1930 about what a more prosperous society would become like and he actually postulated that in a hundred years and we're now eighty-seven years away from them that there would be four to eight times as much output per capita and you know he's remarkable but he didn't quite get how it might get distributed but the idea of more output per capita which is what the progress is made on productivity that that should be a harmful beside is crazy I mean the distribution may be a problem but if one person could push a button and turn out everything we turn out now is that good for the world or bad for the world you know you'd have to figure out how to distribute it but but you'd free up all kinds of possibilities for everything else so you every everything should be devoted initially to getting greater productivity but people who fall by the wayside through no fault of their own as the goose lays more golden eggs should still get a chance to participate in that prosperity and that's what we're government comes in right they'll int they add to that yeah the problem of excess is a different problem than a problem of shortage you know if all the tractors and computer stopped working then we would have problems of shortage there and you know we just wouldn't have enough people to to make the output a problem of excess really forced us to look at the individuals affected and take those extra resources and make sure they're directed to them in terms of re-education and incomes policies and the need for labour in terms of smaller class size helping handicapped kids reaching out to the elderly the demand for labour is not at zero if you ever get to that point fine you can shorten the workweek and you'll you'll be just just fine with that and so the this idea of taking an individual who during their generation is affected I think there's a lot to be learned about that a lot of thinking we have to do but the macro picture that it enables is is is an opportunity number two also I'm urging people at the back so you have a chance and we want to go back up to the balcony as well so when I see number six will come to six after two yes hi my name is Sam I go to Columbia College and my question is what steps you think need to be taken in order to improve public education particularly in economically depressed areas of the United States yeah I think this is a super important issue because the dropout rates although they've gone down a little bit they're still very high and and very based on income and even kids graduate a lot of them don't enter college or they do enter college and they end up in these remedial courses for their reading or math capabilities and those people have an extremely high dropout rate from higher education and you know they can incur debt they have a negative experience so we have a long ways to go in education there are some very strong points of light like here in New York City some of the charter schools are with even less resources than schools at large doing a phenomenal job of educating kids there are a lot of countries particularly in Asia who spending way less of their GDP on education are doing a great job educating their kids and it's not just the top 20% their bottom 20% is pretty phenomenal in the case of China South Korea and Singapore and so looking at what we've learned in charter schools in terms of building the culture giving teachers feedback what is good teaching look like do we give teachers a chance to learn from each other about that you know development that makes the subject seem relevant and important there are great teachers but spreading those practices is has been very very tough and so I'd say it's a top priority and we've take our foundation has that for our work in the United States education is is the top priority whereas outside the US we take on health it's a tough problem because the institution of Education are fairly resistant to change and people are not yet convinced by various approaches very easily but we need to keep at it we're gonna you know stay and even actually put even more money into trying to help help create models okay up number six Hey first I wanted to thank well I witnessed I found all of your foundation and eliminating polio in India and I'm really thankful for that my question is more on how to set the basic level of debate in any any public sense like there are many trade-offs how do I explain climate change policy for people who are losing losing jobs in the coal sector how do you balance the current current short-term economic goals with a long term peaceful transition to the renewable sources of energy now it's a good question and the certain topics are so complicated like climate change that to really get a broad understanding is a bit difficult and particularly when people take any of that complexity and trying and create uncertainty about it and you know for example India's kind of paradigm attic in that they want to electrify for all sorts of good reasons having to do with health and reading at night and quality of life and the question of should they delay electrification for climate issues is is going to be very difficult the ideal is to innovate in such a way that they can go full speed ahead on electrification without emitting the co2 that a the natural path them today which is coal is the way to go in so we have a lot of cost reduction to do because rich countries may be able to buy premium electricity when you get to middle income or lor that's just just not going to happen and you know democracy has this allocate these resources in terms of investing in the future and things like research and investing in in the present and when you have a problem like the financial crisis then you do get a little bit of more of short-term thinking and I'm hopeful I think it's better for the world and for the country if we can get back into a little bit more of a focus on the long term we have some questions from Facebook one a central tenant of your investing is invest for the long term and this comes from Brian white who says how my bill and warrant convince investors to think beyond short-term returns to encourage world-changing innovation well I've spent my life trying to convince people on investing for the long term and listen if I know how to double my money tomorrow I probably and those with the short term - it's much it's much easier to invest for the long term if you're just talking pure and that's not because you know what's going dead and I my view be very high probably what's going to happen 10 and 20 years from now in a major way and I don't have the faintest idea what's going to happen tomorrow or next week but you get if you're talking about societal it's very tough because politicians face elections either every two years or six years and the way the way bridging like congressional districts have been organized primaries have become more and more important and so it's very hard to have politicians think of something that's wonderful for the country for 20 years but will cost them the election two years from now and that that's a basic problem and a democracy and it gets to be more of a problem as as we get arraigned we've arranged congressional districts so the primary dominates because a very limited number of people turn out on their motive tend to be on the extremes of both parties so it it's not easy whether you're gonna make an investment in a company or whether you're gonna buy the company now what are the factors that you have to be that you're looking for what test I'm looking for durable competitive advantage I'm looking for something that has a moat around it for a considerable period of time and I'm looking for an honest and able management Toronto because I don't know how to run it myself and I'm looking for a purchase price that's not excessive but it's better to pay a little too much for something that's a very good business than it is to buy some bargain but believing a company but not much of a future and I don't know I don't have a ability to predict with a higher high probability of success the future of most companies so I'm looking for the exception but the nice thing is if there's thousands of companies out there and we don't have to be right on a couple I mean it's exactly the opposite of baseball where you have called strikes and the pitchers trying to throw it to it the worst part of the strike zone for you and if he succeeds in getting into that corner two three times and you don't swing you're out and and investing it's a no it's a no cold strike things I can sit there all day and somebody can throw me one company after another and finally I got one of my sweet spot both of you have chosen both wives and partners well charlie munger added what Charlie Munger changed my views are we he'd be find them in a huge way in terms of looking for the quality companies and and and looking further the ability to make an investment that would work out well for five or ten or twenty years as opposed to something might there might be one I call it cigar butt investing where there was one puff left in the cigar butt the cigar was free so he picked up these disgusting looking things and got one puff out of and went on to another one and that worked okay but it was small-scale and it really doesn't build something satisfying so so he he kept forcing me in the direction of saying you know existed a really a business we want a home for forever and do we want to get a Soviet it's like a marriage I mean you want to get associated with this person forever and it's a great way to look at things build your wife Melinda has added what well she's going for children because she is your partner and she was there in the philanthropy I would say one at Microsoft I had two partners who were amazing I had Paul Allen in early days and then Steve Ballmer's that company got bigger and we would not have achieved anything what we did without those partnerships because you know when things are tough when you're making big decisions having somebody who's really in there with you committed you know for me I I couldn't have done without that for the foundation Melinda is an amazing partner she thinks about the people issues better than I do she you know knows when I get over excited about the science she can you know make sure we're being realistic about it and it makes it fun you know last week I went to Europe to build economic formers she went to Nigeria and then this weekend we just sat and talked about okay what did we see what does that say about the work we should do and so you know I don't think I did enjoy it without a partner and particularly someone amazing like her it's more fun with a partner I mean Charlie and I've had more fun working together than neither one of us would've had individually and we have never had an argument after working together for 58 you could talk every day not anymore because we know what the other guy's gonna say we just run we talked it all out 50 years ago so if you see Charlie and he says why am you calling you'd say well I knew what you say anyway right there let's say noir - hi my name is Molly Zanger I'm a student at Barnard College I guess what I'm basically wondering is what your main considerations are when you're choosing where to donate on what causes to donate to you and what the main challenges are that are associated with that yeah I wholesale look because I made a choice that I wanted to have well originally my first wife and I planned that I would pile up and she would unpiloted that was plan number one but she she died in 2004 and then I had the problem of figuring out the best way to distribute book which turned out to be a lot of money and I wanted I wanted some people who had similar values and summer objectives what I have I also wanted people who would pour in intelligence and energy and case of Bill Melinda a lot of their own funds work at a full time but who really saw society as I saw it which is that every life is of equal valuing and that if you start with that and then you figure what you might be good at changing whether it's a medicine or education or early learning or whatever it may be you know that was my answer was the the wholesale and retail philanthropy would drive me crazy but hotel philanthropy everybody like Bill yeah for our work at the foundation the belief in innovation which both Melinda and I saw it Microsoft our question was okay how do we bring that kind of innovation to help the world's poorest and we learned that coming up with new vaccines that although you can pay a lot to have them created the marginal cost comes down to less than $1 so great getting a new vaccine for the main cause of diarrhea or pneumonia that can be a phenomenal thing so you're looking for these super nonlinear dramatic things because as a you know perp or person are compared to government funding philanthropy is actually quite small and yet funding vaccine projects the government isn't as good as that as a philanthropist who assembles a team and over time it's learning how to do that very well and we had models in a Rockefeller Foundation was a phenomenal foundation the Green Revolution is just one of many things that they did which raised agriculture activity and saved avoided hundreds of millions starving and so studying the other foundations that have taken these big breakthroughs and created model out of those that was very informative to the to what we've gone after what's the most important lesson you've learned though about making investments from the foundation today that you learned along the way well I think when we started out I thought that just coming up with a new vaccine or drug alone would be enough and that the world would then take that and get it out to all the children of the world you know partly through field this as I did that Melinda did looking at the statistics that delivery system it doesn't get out to a lot of the kids and so having to figure out how people were hired or how that was funded and measured this what's called primary health care we were drawn into that out of necessity it didn't fit the normal sort of in the lab you know come up with this great concoction and and yet in order to achieve our goals we needed to to think about those delivery pieces in fact sometimes the state of the product actually had to be simpler in some ways in order to get through that very limited delivery capacity and now we're getting to eighty-six percent of the world's children with vaccines it was about 70 percent when we got started so that's good increase we still have have 14% to go well about mil good to have amazing convening and persuasive powers as well so I mean they they bring something far more to it than just money I mean they they work incredibly hard as do my three children and our foundations but they work incredibly hard at getting governments involved in vaccines or whatever it may take and that that just is you know it's it's an extra dimension that I think very few people have in the field yeah I mean it's a hands-on it's a travel to when Melinda is in Africa and she's holding a little baby I mean she is actually thinking you know this kid needs to be back that it has a decent chance in education all that I feel the same way about the kid but what I really think is isn't gonna pee on me so I you know there's just a difference in that human touch makes a big difference I'm halfway in between I think he's closer to me my number three and number four first one then three then four me at the Columbia Business School if the current government were to ask for your advice on immigration or health care reform what would you recommend to them well I'm on immigration yeah well immigration I mean this country is built on it I would say the people that are anti-immigration let's put it in retro actively everybody leaves this country if you think about it I'm little Ferguson before from me but we are sitting here in part because of two Jewish immigrants who in 1939 in August signed the most important letter perhaps in the history of the United States and you can you can go to the internet and go to search Bing and just type in Einstein Roosevelt 1939 Leo Szilard and Albert Einstein two immigrants came here they both they came directly from Germany's the Lardon came from Hungary before that and they told President Roosevelt that the Germans were likely to develop an atom bomb which was likely to work it's less than a full page and we'd better get to work on something fast and that the Manhattan Project came out of that and have it had been for those two immigrants you know who knows whether we'd be sitting in this room immigration I mean right it's this country has been built on the west exactly by immigrants and you can take them from any country you want and they they've come here and they found something that unleashed the potential that the place where they left did not and and we're the product of it let me the question also was about health care I mean what can you tell us about health care that you think is important in terms of the consideration of what might happen I mean if you were building a health care plan for America what would be the elements that you would want to include well there's no doubt that in order to provide decent health care the percentage of GDP devoted to it is going to go up over time it's already very high and yes there's some efficiencies to be gained in that you know 18% are so number but as society ages as we come up with new things like joint replacement organ transplant which are going to create lots of human benefits we're going to have to have more resources overall including more government resources for health care and so it's a tough problem because you have both access problems today and you have cost problems today and you know I whenever I look at a problem I have this one simple lens which is those innovation should help here but in this case innovation while it will provide breakthrough drugs that will save costs like if you can cure Alzheimer's which we certainly haven't done yet that will save on huge long-term care costs so we have these chronic diseases that we've made less progress on then than some of the others and you know the market mechanism to get Pharma to go after those things and the basic research because funds I am quite optimistic that we'll have some advances but they'll also give us some very expensive things that will mean where we're spending more money against it and I do hope you know that at some point that we really are calling on the best minds to look at the incentives for the breakthroughs the most efficient system we have here I think there's a lot of unhappiness in the country now stems from the fact that the health care system isn't delivering and yet you know people are saying less government more government you know I don't think they're being given the depth of education about why it's so tough that over time will help them vote the depth of explanation I mean let me go to Facebook in just a moment but where was I promised three four and six three is there and six is up there so quote three six and then we'll go to Facebook hi my name is Josh Shaffer and I'm a dental resident at Columbia my question is for future doctors in genesis of America what what advice you have in giving about having a proper balance of providing that health care but also mastering the concepts of Business and Economics well I told gowanni is you know incredible Walter he in the current issue of The New Yorker has a the latest in wonderful articles about the health care system and he's talking about the people who do sort of heroic surgery like himself are paid twice as much as the the people who are on an ongoing basis and a great incremental way learning about the patient and and seeing what works for them and he it's a calling choir to say hey though that part of the system needs to be run better needs needs more resources and you know so I think it's brilliant that he's saying that and it also corresponds to what what is working in in some other countries six so you both have invested a great deal of money abroad but there is a prevailing belief by some that there are pressing issues in America there are poor people here there are sick people here and we should deal with that first before even tackling anything abroad so what are your thoughts on that my own personal thoughts is that every life is of equal value and in many ways in many ways if you have a little bit number of dollars you actually can do more for more people outside the United States and we do have greater resources here for our 320 million people than exists around the world for seven billion people so if if you you can improve the lot of more people by intelligently spending a billion dollars or any other number in other areas of the world actually and then here and I get you know I coming from Omaha and having the money I have people can say well why not spend it all in Omaha you know you grew up here and almost done all kinds of things for you and I absolutely knowledge that but in the end if I've got X dollars to spend I can make life better for more people if I can have it intelligently allocated in other parts of the world actually than the United States and that draws a fair amount of criticism but you know I live with it because I read it's what I believe in all lives have equal value is really the driving force I mean I found a I'm an accident I won the ovarian artery when I was born in the United States in 1930 it was 40 to 1 against me I was male that now it's 80 to 1 against being a male in the United States in 1930 I was just plain lucky my life had been far different bill always said if I'd been born a long time ago I'd have been some animals lunch because I can't run fast and I can't climb trees and everything no and I'd be think I allocate capital it wouldn't work and I was lucky but a 79 out of the 80 weren't as lucky as I was at that time go ahead bill yeah in terms of the helping people in other countries the foreign a bunch of the u.s. is is 0.8 percent of the budget and there will be in in the years ahead a discussion about is that we're doing it saves lives for typically about a thousand dollars of life saved and in terms of stability and countries eventually being self sufficient to meet part of the world economy there are some some huge benefits to that so if we were talking about should we spend 20 or 30 percent overseas okay you know that would be a very interesting discussion but what we're trying to preserve is something that's gotten smarter and smarter all the time as proven benefits all of which are things that our foundation coin vests invest in the same things like like the polio thing is is 0.8 percent so I'm hopeful that in a big world that can remain a priority let me go to another Facebook question this is from Nadia Rockwall says how my bill and Lauren encourage innovation particularly among teens and young adults how do you encourage innovation well I think you have a market system to provides rewards for it and we have it I mean we we have an incubator for innovation in the United States and you know Bill can drop out of school Andy Grove can come from Hungary and I mean this just welcomes it and thank God I mean that's why we have the kind of prosperity that we have I mean the question of how it gets divided is a secondary question and that does not get solved as well by the market system but but our system is just designed for then look at what has happened all right number one so also I want to make sure we get to people the back so we don't only have five minutes left so there's a couple of hands up in the back so please recognize it hi my name is ah here I'm a senior in the engineering school as men of such great influence I'm curious and we touched a little bit about this in the last question but how you deal with reconciling your convictions with maybe what is believed by the public maybe even a majority considering that you have the wealth and power and fame to make such great things happen either well I don't see you know the the convictions I have you know I love sharing them and talking to people understanding you know where people disagree I you know I can be overly science centric about things I you know there's all sorts of causes that are super important that our foundation because we have limited resources we don't get to go and do there's there's lots of diseases there's aspects of Education you know part of the strength of philanthropy is its diversity and and and so just by sharing the fact that it's fun it really can have measurable impact I hope that sets an example for all of philanthropy I don't happen to believe that you know my voice should be that much louder than other people you know so you know some of these big political donations you know at least you know I and I'm worn as well you know we've chosen not to have that be a huge way that you know we're spending our money that's a personal choice you know the monies being saved for not for the megaphone but for the the work of the foundation we get a podium of a certain sort you know and but people do not with a partner like Charlie Munger you don't have to worry about my use being accepted automatically point out the shortcomings the the influence of money in politics I really think is bad news for this country I think citizens united was a terrible decision and the idea that somebody can for millions and millions of dollars into a campaign and in certain cases it not even be identified I think really kind of goes counter to the kind of America I believe in the two of you created along with blend and others created the Giving Pledge how's that going going terrific good day Atlanta these kind of a little color it is exactly yeah okay this is you know we love philanthropy of all types and part of the strength of American clamp is actually people with very little who are incredibly generous here though we said for the people who are super lucky have over a billion dollars we want a group who are working together who are committed to give the majority their wealth away to learn from each other what's worked what hasn't work how do you involve your kids how do you hire staff and they'll find areas they're working on together and cooperate but we're not pulling any money and we thought we'd get you know twenty twenty-five people together and in fact now we're at one hundred and fifty six so it is a wonderful yearly event I've made some great people I do think that the quantity and quality has gone up because we're getting together we'll never be able to measure that in a direct way in we're making special efforts in China and India because now we have a lot of welfare that wasn't there before and in their own way I think they by having a strong philanthropic sector that will help those countries and and therefore help the world what's interesting now building I are having dinner actually with a group tonight for example but if you go back 100 150 years people got wealthy by making some money from the first oil refinery or still a mill and building another one that Henry Ford would build a plan to build cars and then it would be from actually from retained earnings which eventually turned into cash now you can get rich very young just by having an idea and you can get that idea monetized and capitalized in a way that you cannot believe so we are particularly interested in getting younger people interested in flying because they there will be huge there are huge fortunes by people that are now in their 20s and 30s and just think about those the potential for that group and so on this thing has worked out way way better including getting younger people to join us number six hello my name is Christina Nunez I'm a fellow dental student - Josh thank you for speaking with us today I'm curious about your insight related to relationships I'm personally given a desire to honor myself and respect other individuals have found it difficult throughout life to discern which relationships to really foster and invest in and accept challenges from and which to kind of forego and abandoned because they're more harmful than helpful so are there any major life lessons that you to have learned through your personal experiences it's a very important question and the more you will move in the direction of the people that you associate with so I it's important to associate with people that are better than yourself and actually the most important decision many of you may not all of you will be the spouse you choose and you really you want to associate with people who are the kind of person you'd like to be and you'll you'll move in that direction and the most important person by far in that respect is your spouse I can't overemphasize how important that is you're right the friends you have they will form you as you go through life and make some good friends keep them for the rest of your life but have them be people that you admire as well as Wykeham don't do that to that yeah some friends do bring out the best in you and and so those it's good to invest in those friendships I and you know some friends challenge you about things you're doing and that you know that level of intimacy is great I wouldn't say that I'm you know I was so obsessed with work I didn't invest I'd say in my 20s and 30s as much as I should have it's really through Melinda and seen you know other people I realize okay that is you know it's really worth the investment to have those people as you're always there to help them and and vice versa you

Channel: Motivation Madness

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Id: PX5-XyBNi00

Length: 76min 54sec (4614 seconds)

Published: Mon Sep 11 2017