Warren Buffett | Charlie Rose | Pt. 1 | July 10, 2006

warren buffett is the second richest man in the world worth about 44 billion dollars he is chairman of the berkshire hathaway corporation he made headlines around the world on monday june 26 2006 when he announced he was giving 31 billion dollars of his wealth to the bill and melinda gates foundation together they have created a foundation which will have more than 60 billion dollars to give away it was an act of extraordinary generosity born out of friendship shared values and mutual admiration i admit it i am prejudiced about warren buffett he is a friend he and his family have given me access and time to talk about his life his business his values and his philosophy his philosophy about everything we have talked many times since our first interview in 2004 at the annual meeting of berkshire hathaway his is a life worth talking about because of his candor about it and his remarkable intelligence and yes his stunning wealth warren buffett owns 31 of berkshire hathaway a company with a stock market value of 140 billion dollars his share is worth 44 billion dollars berkshire hathaway owns part of some of america's most famous brand names coca-cola the washington post company american express and procter gamble and all of fruit of the loom sees candy and the nebraska furniture mart he is the subject of many many newspaper and magazine stories and more than 20 books have been written about him for a man so famous and so rich warren buffett has led a remarkably modest lifestyle in his hometown of omaha alma's home always been home always will be home a lot of friends are here but i just i feel good here i mean my my kids are going to the my grandchildren are now going to the same public high school that my kids went to my wife went to my dad went to i mean with almost 100 years and there's a lot of continuity here it's it's a great life you feel like you're part of a community i live in a house i bought in 1958 you know that's 46 years i'm happy there you like the house and so if they yeah this office i've been in for 42 years and and it's it's everything everything falls into place i do two things call it asset allocation in other words we have somewhere between 100 million and 150 million dollars a week coming in to berkshire and that's after all the needs of the operating businesses are taken care of because i let you know if they build plants or anything that's up to them but then the remainder comes into almost my job is to allocate that among anything in the world that makes sense to me i can put it in marketable securities i can put it in bonds error equities i can put it and i can put it in whole businesses i can sit temporarily within cash but that's my job nobody i mean that is my sole responsibility we don't do that by committee we don't do it by advisors that's my job second job i have and this is easier if you kind of get the ball rolling and that's to have talented high grade managers running our businesses who are happy running them so when i buy a business i'm usually buying the manager with it because i don't know how to run the business so i when somebody comes along we've got and says they want to sell their business i have to look them in the eye and i have to decide whether they love the money or they love the business now it's okay to love the money to some but they have to love the business they have a passion for it why am i running down here every day you know and hardly wait to get to work for the money it's because i get to do my job the way i like to do it i get the paint on my own canvas i feel like i'm michelangelo down here and i'm doing the sistine chapel now nobody else may think so but they don't say use a little red paint instead of blue paint or something like that i get to use whatever paint i want paint whatever i want i love it second thing is that they want applause i want applause i mean i like i like it when people say that's a good job and our managers are just the same way they got a lot of money most of them and they they want to be treated fairly so you don't want they don't be taken advantage of they want to paint their own painting they love that and they get it at berkshire like no other place and they want applause and when they get applause from me they're getting applause from a knowledgeable observer i mean it is not it is not uninformed applause so you know that that keeps them and and you know we've had remarkable success in keeping managers over the years let me just talk for a moment and about your skills here's we can do that in a moment you think one moment's enough well i'll stretch it out let's assume we talked about energy and intelligence you know and integrity let's give those values and skills to you yeah all right uh you have an extraordinary capacity to focus absolutely yep you read a lot yeah and you focus yeah a lot of people i know that have done well in their own areas focused in fact just about the first time i met bill we were at a place with 15 people eating dinner and his dad asked going around the table and asked everybody what they thought the most important ingredient they brought to their game was and i answered focus and i saw bill nodding his head across though you knew all right there we go yeah we were able to mate yeah no it it's it's focus yeah what do we mean by focus i mean just concentrating on what's important i mean you have to know your game i was i was listen i was lucky i was born wired a certain way you know i didn't have anything to do with it at all i was born at the right time in the right place huge capital markets america couldn't have been anything like it any place in the world so here i am wired for it and by focus i mean using that wiring basically and trying to get it so that there's you know little fewer flickers here and there and that sort of thing he was born on august 30th 1930 his parents howard and leela lived on barker avenue in omaha this is barker avenue parker avenue tell me about this photograph well that's that's my that's my mom and dad at 4224 barker and that's where i spent the first five or six years of my life my dad in until 1931 was working for a bank and he was selling securities and then the bank went broke in august of 1931 in fact just about on my dad's birthday and at that time my dad was paying as i remember 55 a month on this house he had no job had two little kids i was what one year of age at that time and my grandfather had a grocery store so there was at least a little food around but it was it was a tough time it was a tough time it was the beginning of the depression it was the beginning of the depression yeah yeah this one is that would be myself that was my sister doris and and me together yeah yeah and this one this has to be yeah my i was big on costumes when i was a kid my dad would go to new york and and when he came back he'd usually bring concerts he'd been bringing a costume so i'd be a fireman or a cop or whatever a cowboy or a cowboy yeah right did you have uh an entrepreneurial spirit were you the kind of kid that wanted a paper out and and wanted to sell lemonade and wanted to do all those things yeah i did i i i enjoyed it and and i many years ago i read about a study and i don't know whether the study is any good or not but somebody was trying to correlate business success with various factors whether it was your grades in business school or you know what your parents did anything and they said it correlated best with the age at which you first got into your own business and when did you first get into your own business well i'm not sure exactly but it was probably when i was maybe six or something like that doing what do you remember uh well i would buy uh i would buy six packs of coke for my grandfather's grocery store for a quarter and sell them for a nickel each that's and i had the whole coca-cola company behind me pushing it howard buffett his father was elected to congress in 1943 and the buffett family moved to washington he was your hero absolutely yeah because i i you know just every everything about it i mean growing up with him and uh we were pals you know and i never saw him do anything in his whole life that he couldn't put on the front page of a paper why did he get into politics well he was a man of political ideas but i don't think he ever had any ambition to get into politics he was introverted he basically didn't like to give speeches or anything of the sort but he had strong ideas about about about political systems and about the individual and and about service and yeah yeah and and he had a strong political philosophy and a philosophy of life and it was it was religious based to a significant degree and and he he he he was uh he he thought the government should play a very minor role in people's lives and and to almost an extreme degree and and he may have gotten a little more extreme on his event over the years i i didn't agree with him totally on political philosophy even as i was growing up and then i grew further from that but it didn't change my feelings about him what do you see in yourself that most reminds you of your father well i certainly listen if i could be three quarters of the man he was i'd i'd be very pleased with myself why do you say that because i just think he was the best human being i've known best human being when he came back to omaha he met susie thompson the buffett family knew the thompson family oh my yes they were like this the parents the parents the children didn't know each other because warren and his sisters lived in washington from the time he was 13. his father was a congressman right yeah so when you first met him i first met him i was going to be his youngest sister's roommate at northwestern so i walked into their house and he was sitting this chair in the living room and he made some sarcastic clip i hadn't even met him so i made one back i thought who is this jerk and that's how we met yes here is the story he chased you and you were dating other people he would come over to the house right here my dad sit with your father yeah and you're going off on a date right my dad fell in love with him listen warren is smarter than you even though he my dad had um a mandolin up in the attic warren said doc get out your mandolin and i'll play with you with my ukulele so they played together and my father fell in love with warren and he kept saying to me you don't understand this boy he has a heart of gold no pun intended and that's what went on for quite a while you know i i mean but doesn't warren always get what he wants susie and warren buffett were married and they soon moved to new york to study and work with ben graham a professor at columbia university next to his father ben graham remains an intellectual influence and a hero there are half a dozen that had a tremendous influence and certainly ben graham influenced me enormously in terms of giving my me the investment framework to work to go forth i wouldn't be remotely where i am without without ben graham but graham gave you the principle he gave me the he gave me the foundation and you read the book first i read the book and said i want to meet this guy yeah well i was where i was but i i wanted and i didn't i didn't understand he was teaching charlie when i when i read the book and even when i finished nebraska and then i was leafing through a a catalog of columbia and his name popped out at me and that's when i wrote and said will you take me but i had no notion about it why were you willing to leave omaha and go to new york was it that this guy knows something oh yeah no i wanted to you know if i was going to be a disciple i wanted to see the messiah and you sort of viewed it that way i did in terms of investing sure when you read the book you said to yourself i said that this makes sense makes sense it makes sense nothing up till then it really made sense and the principles are still the same principles are absolutely the same having changed what though as you change circumstances well you just see more ways to apply them and i mean the applications come up in different forms but the principles remain the same help me understand the operative idea about ben graham and i value investing well ben just says look at a stock not as some thing that wiggles around or is quoted in the paper every day or is up there on a ticker says look it as a piece of a business figure out what the business is worth if you can't figure out what the business is worth you've got no business buying the stock and i'd never thought of it that way and and so i started looking at businesses instead of stock charts and volume and all that kind of thing and it was amazing what kind of an edge that gave me and then secondly he said the stock market is there to serve you not to instruct you so you don't look at stock prices as telling you whether you're right or wrong you're you're there to take advantage of stock prices when they get out of line with reality and then thirdly he said always have a margin of safety that don't try and drive a 9 800 pound truck across a bridge that says limit 10 000 pounds leave yourself some room for air because you don't know everything so you'll always leave that margin of safety buffett works in this office building with a staff of 16 and a collection of memories this is gillette safety razor company right this goes back to the the patent for the razor uh going back i guess well this is this is 70 years ago roughly on that particular razor and how did gillette come about and why did you decide to get involved well gillette you know here's a company that after 100 years of being in the razor and play business has 70 or so of the value of razors and blades throughout the world now when you have that kind of permanent advantage obviously with the consumer it's not going to go away in a few years and it's not going to go away in decades i mean this is a company that really has something this meets the buffet it makes the test it makes it a durable competitive advantage durable competitiveness and all night as you go to while you're sleeping you know when i sleep at night i know that hair is growing on the faces of billions of men around the world and that hair is growing on twice as many legs of women around the world but i don't think too much about the women's leg i wouldn't get to sleep here is the the omaha royals yeah maybe 10 or so years ago maybe a little more even the owner of the omaha royals was going to sell and and probably moved the team out of town so at the time it was the union pacific railroad and walter scott and i bought the team primarily to keep it in omaha and it's still in omaha it's still in omaha and you suit up ever oh yeah yeah i know they count on me well i've seen pictures of you in a uniform i've started i've started several games but they they seem to pull me after one pitch before the first pick that's right we have a change in the starting lineup buffett will not be pitching today nobody's gotten hit on me that was the first purchase you can barely read it because the the ink has gotten faded on the partnership first this first purchase purchase of berkshire stock by the partnership in 1962 and this is the trading record of a firm called at that time tweety brown and riley yeah and they were the brokers i used a wonderful fellow named howard brown bought all my berkshire for me at this small firm called tweety brown and and then many years later they pulled out the trading card relating to that first purchase and sent it to me this is what well tom osborne has signed this yeah and frank sulwich too and that's the record of nebraska during the davanni osborne 1962-2000 it was quite a record they won a lot of football they want a lot of football games right that's a passion university nebraska well yeah i mean you're not allowed to reside in nebraska unless you're a little bit of an addict on the subject when you take gates to a game in which they're watching playing against washington he doesn't really respond very well but in nebraska i mean when there's a divorce in nebraska they don't argue about the kids they argue about the football teams here we have the new york stock exchange and this is let it be known that berkshire hathaway incorporated omaha nebraska yeah listed on the new york stock exchange we had a problem doing that because of the price of our stock and everything it took a little special action by the exchange which i appreciate it explain that to me well it's just that they had some round lot requirements and all that that that were designed for lower price stocks and we didn't have the number of hundred share owners that were required at the time so they redefined it a little bit to allow berkshire to be they're always people who want to know why you've never split the stock well we don't split the stock because we're not we don't want to encourage the kind of buyer who is excited by stock splits and this way it keeps it more of a of a business atmosphere and less of a day-to-day stock atmosphere around it and there is any sense that the people that you want to invest in berkshire hathaway you want them to come in for a long time and you want to think seriously the decision to buy berkshire hathaway we wanted to join in the business with us with the intention of holding it forever now all kinds of reasons why they might not but that's that's that's the goal right do you check this price of the stock every day i probably know about it sometime during the day uh maybe it's a close but i don't know i'm not checking and if there's some movement you're not interested in why there's no one who might be selling or who might be buying the domain of everything they're making a difference so on this wall uh it was tom murphy and you you win a soap op i was in about four soap operas but that's because every time i got invited they hadn't seen me earlier and susan lucci was terrific i mean she she tom murphy and i were there and we couldn't remember our lives or anything she carried us through now you played yourself uh yeah muffin and murphy show up on the set of all my children right i introduced my friend warren buffett oh my i am so thrilled to meet you i have been such a fan of yours for such a long time but i must tell you that your your photographs just do not do you justice at all mr buffett please call me warren well thank you if you'll call me erica susan lucci the long time star of that show right now they paid you for this they paid me for this uh i tried to negotiate for more but i didn't have much luck you'll notice there's a wardrobe allowance which they gave me for ten dollars and that was in 1991 i i haven't spent it yet someday something will come along this is funny this is a story of about gorbachev when he was ousted hardliners declare emergency tanks roll into moscow streets and the man that they are assuming to be gennady yanayev is not in fact it is warren buffet he but this was the day after i took over solomon and i thought some of the comments hey they got my picture mixed up then there's hardliners declare emergency vows to overcome prices it would this is you batting against bob gibson bob gibson right yeah i only i only play you take your life into your own hand don't you play against the best one of the fastest throwers there's ever been we're friends but i wasn't sure how far that would carry me and so brokaw sends you a note saying a copy but gibson gibson object or somebody may object to something is baseball i've always liked baseball i mean i don't follow it the way i used to when i was a kid but i bet baseball is you know i love sports generally everywhere i look there's you in a uniform there's a hockey thing over there here is a man that you refer to uh because of of his approach to hitting right represents what do you as a metaphor ted williams was all about discipline and hitting uh he said the most important thing was waiting for the right pitch and he illustrated in his book the science of hitting he illustrated that and and you know he he looked at hitting as something that he thought about morning noon and night you know and and always was looking for how to do it better but discipline he said swing waiting for the right pitch is the most important thing in batting and you think about morning noon and night berkshire hathaway in in in what way well we keep waiting for the right pitch and we're not going to swing at some pitch that some other fellow might like i mean if our favorite pitch is two inches above the naval you know some other guy likes it you know around the letters or a little lower or something that's that's fine but in in business unlike baseball there are no called strikes so you can sit there and the pitcher can throw you ibm at 62 or general motors at 28 all kinds of things and nobody's gonna call a strike if you swing at one of those pitches when it comes across berkshire hathaway at seven and three eight you know and you miss it's a strike but but it's it's a terrific game that way because you can sit there and wait and wait and wait for the right pitch and and there are not many things in life where you get that option and that's exactly what you're doing now that's that's what i do before in anticipation uh of this annual meeting you have to say to the stockholders i've been waiting for the right pitch and i haven't seen it that's right that's right and and some pitch somebody else can hit out of the park you know but i don't think i can you know that's my that's uh my problem but i'm not gonna you know i'm not gonna think i can hit a pitcher i can't does it kill you to know that you got 40 billion dollars there not earning huge interest rates in today's market yeah well i don't like it but i like it better than swinging and missing and and the problem for most managers is that they've got all these people up in the in the stands yelling swing you bum yeah you know but we've got a group of shareholders who not very often yell out swing you bum in fact they're yelling at swing when you when you're ready i mean that's the confidence as you develop that's right why did they come to this annual meeting i think they have fun i mean it's you know they they see people they like i think they they they they learn more about berkshire it's kind of a reunion for many of them and there's all kinds of little clubs develop and friendships develop out of it and shopping on the side i have shopping on the side and i get to see a free movie in the end yeah that's about it though we don't we don't give them goodies or anything like that i mean they come because they want to come and and here is babe ruth yeah that's that's the hall of fame after the second year minus ty cabba was late this is up here simply because you love baseball well i just think those are you know those are the champs they were the first people put in the hall of fame and ty cobb he was late for the picture whoever took it wouldn't wait but he he actually knew your great friend carol loomis he dated her right right bear in mind we didn't know to be honest about it i mean he was 40 or some years older than she was at the time but his nephew called her and said my uncle ty has been watching you on television she was on a quiz show and he would very much like to take you out and she went a couple of times i said it's worth getting to know jack right right so here's when tiger woods is what do warren he says i thoroughly enjoyed our day together and look forward to doing it against your your friend tiger um was he caddying for you no no i was catting for him and if i had my back here on the back of it it says woods i mean that was a barrier oh i see and then on the 18th hole he said now warren he said i understand you play this game and i said not the game you're talking about he says we're going to play the 18th hole and we're going to play it for serious money and i said tagger all money is serious to me he said no we're going to play for five dollars i said let's serve his money and then he got down on his knees he played me on his knees so every stroke he hit was on his knees i mean he was all the way down under his face and how did he do well he hit his drive about 260. on his knees on his knees it was unbelievable straight down the ball it's out like this yeah i mean he didn't even adjust himself after he was down and so i went over and i handed him five dollars and then i said tiger i think you're forgetting something he said what's that i said the caddy gets ten percent of your winnings i'm still waiting for the 50 cents you have one day of catting he's a terrific guy he is one terrific guy i can tell you that he it was part of a charity deal and i mean he went all out to deliver value to the people that bought the right to play with him and as jack nichols says he plays a game i'm not familiar well i remember when he said yeah if you go to omaha nebraska to see warren buffett one of the things you might end up doing is going to garage restaurant one of his favorites we did that and we talked with him about a typical day walkthrough day for me the day is you wouldn't believe the day i mean i i come down and i i what time well i i do some reading i usually read a lot of the papers at home so i get up around 6 4 6 45 paper on online uh mostly on regular paper but i but i also click on some things uh you have a favorite list too yeah right i've even got the charlie rose show up there i want to see who's out of here but i really do but uh so i i get up about 6 45 usually yeah but i may get to the office at nine o'clock no i make it there at eight depending on what's going but i have no schedule to speak up i mean you know here's here's my date book you know just just take a look you know i mean can i do this this is not grant jim appointment eight o'clock nine o'clock i just don't do it so i don't want to live that way uh you decided that a long time a long long long time i decided back when i was delivering papers you know when i was a kid i mean i i knew what i enjoyed and what i didn't enjoy i like delivering papers i'd still be able to deliver a paper run but i don't want to be ahead of ibm or general motors or then why not because your life is too taken up by things that you don't really have choices about it yeah i just don't want to do it you look good take me 945 you get in it whatever i do more reading i read five newspapers a day yeah i read all kinds of annual reports and magazines and 10ks and 10 cues and so i would say i spend 75 percent of the day at least maybe 85 reading and i spend the the rest on the phone and i make it okay i i buy or sell any other stocks or bonds or foreign currencies i mean i but uh but that doesn't take much time because we're not doing that in on a broad scale and then i go home and i play bridge or read some more you go home and what five six o'clock yeah although that can be there is no i don't i don't like you there's no schedule i don't like to be structured if you want to go home at three you go on three you want to go home at seven you go at seven exactly and still read more yeah usually or play bridge now more online online i would pay and and i don't mind saying this to the people that own it because they don't know how to get it from me i would pay five million dollars a year for the ability to play online bridge 12 hours a week it's worth it to me you know if i compare it to the cost of a second home which wouldn't mean a thing to me to speak up or a boat or whatever it might be i mean what you need something you would be able to play if you deliver 12 hours of enjoyment playing with my sister in carmel or whoever may be you know doing it in a few seconds clicking on great you know interface on it i'd pay it but they they can't figure out so i'm paying about 95 dollars a year principal joy get is that and and bridge and friends those yeah and and the bridge and the friends intersect of course and i mean well this saturday i'll play with bill and then at ten o'clock uh my time he'll be eight o'clock is time we'll play for a couple of hours and you always win no i tell you so but you check with him and then there we go the notion of investing for you what are you looking at for when you read you're looking for an interesting company you're looking for i'm looking for a business i can understand i'm like a basketball coach and if i walk down the street the first thing i look for is seven footers you know and now once i find the seven footer i still got to figure out you know whether he's coordinated whether i can keep him in school and all those things but if some guy comes up and he says i'm you know he's five six and he says you know where do you see me handle the ball and all that i'm not looking for those guys yeah when i first started i used to find a lot of seven players harder to find seven footers now because my universe isn't as big right right but i look for things i can understand i think i know what the economics of the business will look like five or ten or 20 years from now and it doesn't mean that you know i understand what a computer does but i don't know who is going to be making lots of money off computers 10 years from now any more than i knew who was going to be making a lot of money off of television sets back in 1960 turned out nobody wants you've always always taken the position that really you only don't want to make speeches except to business students and to kids just the students yeah what's the idea the idea is that they listen and and you may change some lives i mean i the things i heard when i was 20 from somebody i wanted to listen to changed my behavior in ways and the people i listened to at age 74 you know i want to be entertained and all that you know but i'm not going to change they're not going to change anything so if i talk to a bunch of 50 or 60 year olds basically they want to be entertained and they want predictions and but if i talk to 20 year olds a they ask their 25 year olds they ask me the questions it's what's on their mind and they really get to what's on their mind and they listen and you can see it in their faces and then they write me afterwards and and so it changes some lives the biggest thing i we talk about and what i know resonates with them because a lot of them are thinking they ought to go into this line or that line because they're looking on their resume or they get a little more experience you know i tell them if you wait till you're 80 to do something you like i say that's like saving up sex for your old age you know you want you want to have a passion for what you're doing why go through life you know waiting for the big moment when you're preparing for something else yeah right it doesn't make any sense it doesn't make any sense so i tell them you know basically unless shirley maclaine's right you only live once you know what then and we go from there no evidence yeah she's right i talking to students about life and business is one of warren's passions he does it more and more these days from all over the world they make a pilgrimage to omaha one such appearance that was filmed for public television was at the university of nebraska in lincoln where he appeared with his friend bill gates hi my name is nicole brockhoft and i am a senior business administration major here at the university and i was just wondering what is the best piece of advice you've ever been given and how has it impacted your personal or professional lives i think that you know i got an awful lot of good advice from my dad and he didn't he didn't lay it on me i mean he just you know you you you picked it up from him but there was never any of this you know do this do that uh type of thing at all but but i think he really taught me that it's more important uh in terms of what's on your inner score card than your outer score card i mean some people get in a position where they they're thinking all of the time of what what the world's going to think of this or that instead of what they themselves think about and if if your inner score card if you're if you're comfortable with that i think you're gonna you're gonna have a pretty happy life and i think the people that strive too much for the outer score card sometimes find it it's a little hollow when they get all through hello my name is kim martin i'm a senior finance major here at the university my question is how do you instill ethical leadership throughout your organization and to begin with how do you know that the management one level below you is making decisions that would parallel your own we have all the money we need you know we'd like to have more but we can afford to lose money but we can't afford to lose reputation not a shredder reputation and therefore i ask the managers i ask them to judge every action they take not just by legal standards although obviously that's the first test but also by the test what i call the newspaper test how would they feel about any given action if they knew it was to be written up the next day in their local paper to be read by their family by their friends by their neighbors written by a smart but kind of unfriendly reporter and if it passes that test it's okay and i tell them if anything is close to the lines it's out and they can always call me if they wanted to check something but if they call me there's something wrong with it probably anyway and that's about it in microsoft's case our top management team the majority of them joined us as right after uh whatever degree they got if any i should mention that that i am the only college grad up here you've made a point to see almost any group of students will come to omaha what is it about that what do you get out of it and what do you think they get out of it well i like teaching i mean i taught my first class when i was 21 and i just enjoy it i enjoy the interaction i mean it's fun to sit there and have them throw questions at me and you know and so i've always i've enjoyed doing it and and i do as much of it as i can where is their curiosity where is it yeah what is it they what questions are they a lot of that well a lot of them they're business students a lot of them but and so they're interested in markets and business but they're also interested in their own lives and that's when it gets the most interesting i mean they they ask me personally a lot of personal questions i i answer them and and it's interesting to know what's on their mind because they're they're groping i mean they're looking they're looking for the road they're going to take in life and a big part of that is the business and making some money and all of that but that isn't the only part of the road and and then and we have good discussions about that and i enjoy it and about values about about the notion of friendship and the notion of yeah and how you're going to feel about yourself when you're 70 years old and what you know looking back what you'll feel good about about and how you get there i mean i i i wanted to reverse engineer their life you know basically to look at what you would like for it to be at the end and ask yourself work backwards how do i work buffett also tells students about the inherent advantages of where you were born let's imagine that it's 24 hours before you're born and the genie comes and he says charlie you really look like you've got good judgment you know so i'm going to give you an enormously important task i'm going to let you design the world into which you're going to be born in 24 hours and you say that a genie appreciate the responsibility you picked the right guy but what's the catch i mean i've been low the genie says there's just one catch before you go out of that world after you've designed the rules you're gonna go over that big barrel over there there's six billion tickets in it and you're going to pull a ticket out that ticket may say male female may say rich poor what kind of a world do you want to have not knowing what tickets you're going to get now i call that participating in the ovarian lottery i got a ticket to say the united states you did too you know i got a ticket that said smart about certain things you know all of that helped me but i say you should design a political system that will deliver lots of goods and services to people but then we'll search for fairness in how those are distributed so i come into this and abundances just showered on me because i have the you know a talent now gate says if i'd been born at some other time or some other place he'd a long time ago i've been some animal's lunch because you know i don't run very fast i can't climb trees you know so i'd be talking about friends about allocating capital you know that dinosaur would be coming right at me and he offers a profound definition of success let me tell you a story it gets there uh i have a friend here in in omaha she's my wife's best friend 60 odd years ago she was in auschwitz she's a polish jew the whole family did not come out if you talk to her today and you ask her about friendship she would say she would define it as who would hide me she said that's the bottom line now i would say that if you get to be my age or much younger for that matter and you have a lot of people who will hide you the people who you want to have hide you would do so you're going to feel very good about your life it's the real test i mean it's it's it's a referendum on how you've lived your life and and you can't you can't you can't fake the ballot box on it i mean it it's it's it's it's all important and you certainly want to feel that way with your kids but it's wonderful when you feel that way with your business associates and those who worked around you friends real friends are important to warren buffett and here are three of the closest tom murphy former ceo of abc capital cities charlie munger vice chairman of berkshire hathaway and don keogh chairman of allen and company warren would never take advantage of anybody he's never looking to make a bad deal for the other guy and he's completely honest and fair with everybody it's the nature of life that as the old germans say you're too soon old and too late smart and anybody that helps you get smarter a little earlier enormously improves your life and all we do is prove these simple old adages like that german saying warren got me smarter in some ways a little earlier and that helped me how close did you live to the buckets well i lived across the street across this turn across the street we i bought a house there in around 1959 a three-story house brick house tile roof paid thousand five hundred dollars for it and there was a young fellow living across the street in another house good big house he paid thirty thousand i think for his his name was warren buffett he wasn't uh nobody knew who he was uh he was a nice guy he had i think he and susie had three kids we had four working on five and uh you know i got to know him he wasn't easy to know because he he didn't see much of him but my kids did you know of course the real story is that he came across the street one day and he said don i love your kids i said i know and he said you know i was thinking about college you know you know getting kids through college isn't easy i said warren i'm working on grade school right now i'll get around to college a little later he said i've started a little fund people putting a little money into it and if you gave me say ten thousand dollars uh i think i could build that up into something well charlie i didn't give it to him for two reasons one i didn't have it could have borrowed it from my father but uh i went into mickey and said can you imagine giving ten thousand dollars to a guy who doesn't get up and go to work in the morning the uh that was one of my great decisions of my life if you had given him that tension don't ask yeah probably over 400 million yeah 400 you've talked we're still friends since today susie buffett warren's beloved wife unexpectedly died in 2004 one month after she sat down with me for only television interview and talked about their unique relationship according to him to me he would not have made it without you you gave him something well i feel really good about that charlie because whoever you are in this life you don't want to think you've wasted a lot of your energy and love and time on something useless warren is phenomenal and i felt that the best thing i could give him was unconditional love and i have and he said he said you're like a little watering can you know and i'm a flower and and how can you not feel good about that he made you feel needed very important and you knew he loved you oh i don't know that anyone's ever been more loved it fits me to be needed and to know that what i have to give is the right thing and if you have two people we just have a lot of love and respect for each other and that's never changed again i can't help but relate it to art because any great novelist painter musician is going to need the room to allow that to grow and and something's going to grow if it's in the right soil and my mother gave him the soil that's really what it is did you get more mothering than fathering because he was so meant to reading and yeah yeah i mean my mother was there and she was there um and and more present in the sense that my dad was you know sitting in his office or room doing a lot of reading why did you move away from omaha i'll tell you i am a person who likes a private life and i thought you know i would like to have a place where i could have a room of my own it would be nice because you see a physical proximity to warren doesn't always mean that he's there with you i mean you can there hasn't been any change in anything because which he had it took him a while to figure it out but he figured it out i said i'm not leaving you because i'll be wherever you want me when you want me but most of the time when you're in the same house he is or whatever he's up reading and you're that's why i learned to have my own life we were two parallel lines and but very connected when he was open to connecting you just got this sense that there were two people that were very much in love but were sort of becoming um disconnected in a certain way because my mom loved life and my dad loved what he's always loved you know his work and absolutely and so i think my what my mom was starting to see coming was this idea of you know i don't want to be mrs warren buffett in omaha because she doesn't she just can't think of herself that way she's an independent strong-willed giving human being that needs to be connected to a lot more things than what omaha i think would have to offer after her kids were gone i mean she really gave us and my dad everything are you responsible for astrid well yeah i mean well i'll tell you i call her aya that's a term of impairment you call it what i yeah it's a term of enjoyment when i was singing at the french cafe in omaha i was the maid of the year the woman that met you at the door and she is a very um helping a giving person and between sets she would always bring me tea and we sit and talk and we became very good friends then when i moved to san francisco i mean it would have been all right for some other person but warren can't find the light switch and it's probably my fault but i don't take all the ball for that so then i called after i said astrid will you take one make him some soup go over there and look after him because he's not going to make it i mean he's different than a lot of guys because we see each other all the time and we do things but he just can't uh no he can't function yeah so she went over and yeah and stayed and that was she's done me a great favor let me know she took care of your man for you she did and she takes great care of him and he appreciates it and i appreciate it she's a wonderful person and they go out and dinner and everything he's a companion they do what they do you know i mean i think it's true they loved each other i think i know astrid loved my mother and my mother adored her yeah so your mother's death was tough for her too it was very hard for her yes but even more important for her to be strong because yeah it's one of those things that's so strange it works that's exactly right i mean i always think you know this is one of those things that unless you're in it you may not get it but it works and it it's great she knew that that my dad would need somebody certainly and and i don't know or i don't remember the exact details but i do know that there was essentially a you mind making them chicken soup and one thing led to another you know basically uh which is phenomenal i mean it it is a uh it's extraordinary how that worked out i think for everybody he was devastated by susie's death oh oh that's an understatement yeah couldn't even get out of bed well he did get out of bed i was proud of him i didn't know if he'd be able to get out of bed for a few months but he did i mean he was just because it was so sudden it was a huge shock i mean my mother um you know she got sick in october of 2004 went through this really awful operation and very difficult radiation and recovery and was doing really well it was slow but she was doing really well and she'd had an mri i think just a few days before she died and she was very excited she was doing great and um and didn't die and cancer died from a stroke no she didn't die from the cancer you know i think that um for any of us it was hard to imagine her ever being gone and i'm sure that's probably natural he said to me he thought he would go first i think we all thought that i mean i would have i would have said the same thing if you'd asked me that question and i don't know why that is but you know she was the true matriarch of the family and so i think we just for some reason we felt that way and no for not any logical reason but we you know that was just uh i've never asked susie or peter how they felt but i mean that's that would have been my answer to the question is that i just thought that she would have been around uh towards the end and i think that you know he's still adjusting to it i mean it probably takes years five years he said i'll be the same he told me five years now feel the same way yeah and that's probably true can't talk about it though well that doesn't surprise me i mean you know she was something very special it has he changed i think he has a little bit he's never too busy or uninterested which is fantastic and and that has only increased i think that's the biggest thing over time and specifically since my mom's death uh that he's more available great well just greater interest in being in touch uh you know my show was on the mall in washington when the smithsonian opened their national museum of the american indian and i called him up and i said you know normally i call my mom and i tell her how excited i was and she'd call you and tell her how excited i was so i'm calling you and telling you you know because she's not here anymore he has said that there's nothing more important in life than to have someone you love who you know loves you back well i mean he would know that with her there's no question about it this is a remarkable woman yep you know and the pictures of her every picture i would see of susie she's smiling it's gonna be hard to talk about i know but you gotta talk to me about it because she talked about you charlie i'd like to talk about but i can there's no finer human being than who he is so i overlooked the money two years later warren buffett decided to give 31 billion dollars to the bill and melinda gates foundation and six more billion dollars to family foundations what surprised you about the reaction then i'll tell you what surprises me well it just surprised me that there was so much reaction to it the whole thing but when you think about it i mean it has so much drama that the second richest person wants to give his money to the first richest person i can see that angle yeah yeah i mean that makes it funny yeah if it was the 20th or something like that it wouldn't have had the same impact yeah i mean and it's so far ahead of everybody else that it's just you know it's that that makes it the other thing that surprises me we haven't heard from the salt in the brunei accidentally yes exactly where is he the other thing is everybody asked about the kids as if somehow the kids are going to be pissed off it is the most surprising thing to me that somehow and to know your kids and how much they love you and what a great family it is it's like a thought never occurred yet everybody wonders what about the kids they think it's the best thing that's ever happened two of the three kids have told me in the past i'd set up these small foundations seven or eight years ago for them and they've added a little they have told me they they would rather have me give more money to the foundation than to give that same money to them they are more they'd say they don't need money you know and they're they they they consider themselves ungodly blessed and they love working with the foundation that literally two of the three have said come up to me you know at a christmas time when they thought i might have been adding to the foundation they said don't give money to me give the money to the foundation you also had a wonderful marriage right has the things that have happened since 2004 given you a sense to put all that in context and you know it's always tough charlie yeah but this in a sense it seems to me and i've said this on a premium conversation we had here at this table is so in touch with the spirit yeah it's the right it's the right thing to do and so they would have thought it was the right thing to do when you think about the future um is it just continuing to paint the picture absolutely it doesn't get any better than this i mean i don't know how long you can do it but you know you're just playing lucky in life if you get do something that you love doing with people that you love being around tomorrow how warren buffett turned a nine dollar per share investment into a company worth ninety thousand dollars a share

Channel: Investor Archive

Views: 29,435

Keywords:

Id: Gm1FqNO4taM

Length: 51min 46sec (3106 seconds)

Published: Thu Nov 12 2020