Warren Buffett Interview #2 - Becoming Warren Buffett

well a berkshire hathaway uh shareholders meeting is partly a um uh a class in business it's partly a fun festival it's sort of a mardi gras for people that come every year it's a chance for us to have a lot of fun and meet the people that have entrusted us with their money and we want to make sure they have a good time and we hope they learn more about the not only berkshire but just the attitude they should have uh toward investments in general we're a berkshire as a corporation but it goes beyond that in in in in terms of our our feeling toward the people who are shareholders we regard them as our partners uh charlie and i are the managing partners uh the others are are are silent partners but uh the attitude is partnership they're they're not some uh faceless group of people and that's why at the annual meeting i you know i love seeing forty thousand of them or so it's it it gives real meaning to what we're doing every day you know i i'm probably one of the few ceos that actually enjoys writing the annual report or as some writers say i enjoy having written them having written the the the actual process of writing could be a lot of work but i want to uh i want to tell them uh uh or talk to them about what i would like to know if our positions were reversed and they were running the company and i was the shareholder so i i mentally envisioned my two sisters doris and bertie they're very very smart they have a very high percentage of their net worth in berkshire so they're interested but they're not following business day to day so i i pretend that they've been gone for a year and i'm bringing them up to date about the kind of things i would like to to know if they were running the business i was uh the silent partner yeah ted williams wrote a book called the science of hitting and ended he had a uh a picture of himself at bat and the strike zone broken into i think 77 uh uh squares uh all the way from the letters down to his knees and the width of the plate and he said if he the most important thing in in batting was to wait for the right pitch that if he waited for the pitch that was really in his sweet spot he would bat 400 and if he had to swing at something on the lower corner he would probably bat 235 and and in investing uh i'm in a no called strike business which is the best business you can be and if if the count on ted went to 0 owen two or one and two he and that ball came across the plate in the in that corner where he only batted 235 he still had to swing or he would have been called out in investing there are no call strikes i can look at a thousand different companies and i don't have to be right on every one of them or or even 50 of them or even 25 of them i just the only the only way i can have a strike call is if i swing and miss so i can pick the ball i want to hit and i can wait there and the pitcher can throw pitch after pitch and if they are not in my sweet spot i don't have to swing and that's an enormous advantage over most businesses the problem of course is that if you have an audience that says yelling swing you bum while you're waiting there with a bet on your shoulder time after time you may get tempted to swing at the wrong pitches so you have to make sure you're that you don't psychologically get in the position where you feel you have to swing at pitches that really aren't in your sweet spot yeah probably probably if i make one great decision every two years i'm you have to make very very few right decisions in investing in your life you might say that a person who bought berkshire hathaway 50 years ago only had to make one decision and and there's a temptation for people to act far too frequently in stock simply because they're so liquid they know they can't buy and sell farms every day or buy and sell apartment houses every day they can buy and sell stocks and that's and in a very liquid market with very low transaction costs and that should be a huge advantage but people turn it into a disadvantage because they think the availability of the opportunity to trade uh is something that they have to uh take advantage of every day and actually active trading just costs them a lot of commissions the main thing to do is buy into a wonderful business and just sit there with it i don't i would say i get very very little hate mail uh uh i i get a lot of requests for money and i had one fellow that would ask me for 1.3 billion he broke me about 70 times and he never dropped his price i kind of admired his position of non-negotiation but i uh there may be a social but probably when i uh wrote about taxes i got i got a few letters saying you know why don't you just uh send all your money to the u.s government if you think it's so wonderful but i i would say there's very very very little hate mail well omaha and nebraska are home to me and and and uh uh i had a great time uh growing up here until i was about 12 and we moved to washington i made lots of friends uh everything about it seems like home i go back uh i've probably gone back at least a half a dozen times to my grammar school rose hill and i go there for fairs they may have occasionally i might even talk to a great school class or two i uh there's a lot of continuity there's a lot of community there's a lot of friendship uh i know the i probably know the parents the grandparents now a lot of people i meet but if i go to a restaurant here there's there's a lot of people just say hi warren to me that that either i know or that that they're just friendly my children had a good time growing up here they had their aunts and uncles and grandparents uh living within a mile or two uh uh so it's been it's a very solid place and friendly place uh in which to uh grow up in in which to conduct a business uh we have 25 people in the office and if you go back a year ago to our christmas party we're going to take a picture of the 25 this year it's the exact same 25 as a year ago the exact same ones now we have a company with 350 000 employees and here in the headquarters i don't think there's another company in the world that probably didn't have that we didn't go up one we didn't go down one and we didn't change one well working in omaha certainly maximizes both my enjoyment and my output in terms of work i mean everything is is made to order i live five minutes away from the office and i've been making that five-minute trip back and forth now for what um 53 years uh uh you know there's no stress i have i have no stress whatsoever in business that uh i think it's probably helped me not only live longer but and certainly live happier as well i had a when i came back from new york in early 1956 uh i had no idea what i was going to do i knew i was going to take some classes at school i knew i was going to do a lot of reading i had no idea that i would set up an investment partnership but a few months after i came back some members of the family uh said what should we do with our money and i said well i'm not going back in the business of selling stocks but if you would like to join me in a partnership uh somewhat along the lines of the one i'd worked for when i was with ben graham i said i'll be glad to do it so within a couple of months after coming back i set up the first partnership and i was then renting a house i never owned a house to that point and i was renting a house at uh a block and a half away from the family grocery store and it had a little tiny room off the bedroom and that became the office and then two years later i bought the house i live in today in 1958 and that too had a room off the bedroom and i worked out of that room for about four years so there was about six years in which i uh worked at home i drove down and picked up the mail i wrote checks eventually i was running 11 partnerships finally i wrote all the checks individually i filed 11 income tax returns i took delivery on stocks for all the different companies i i was a one-man band there for six years there came a time at the start of 1962 i i moved to kiwi plaza they were just building the building then and finishing it and i hired two people one one was a secretary and one was a a fellow that analyzed investments with me bill scott bill and i are still friends he still lives in omaha and and we started to look like we were really were a business by the time i moved to keyword plaza we had seven million dollars in invested we started the first partnership started with a hundred and five thousand one hundred dollars i put up the hundred and the other people put up the hundred and five thousand and then as as people came along uh and saw what was being done in the earlier partnerships i made this mistake of forming new partnerships so i had this multiple uh multiple checks multiple tax returns and all that sort of thing finally it just made sense to put them together so when i put it together in january 1st 1962 we had 7 million and a lot of that was new people that had come in over the years and and some but fair amount was profits i closed down the partnerships well just one partnership by that point i closed down the partnership at the end of 1969 because i really wasn't seeing uh opportunities in the investment world and and and there were some crazy things going on in the late 60s and i didn't want to do i understood what people were doing but i didn't believe in what they were doing so i didn't want to join that game on the other hand i didn't like sending it out and having having my results look bad so i decided to give the money back to the partners i didn't think i didn't want my competitive juices to to force me to play in a game where i really didn't think i had an advantage anymore uh so uh it was a it was a lifestyle decision i had all the money i needed and the partners had all done well and i had a way of providing for their continued uh shepherding by a couple of friends of mine that were very good managers the i had various social ideas too but the two were not in conflict i could have gone on on on a double track throughout the rest of my life and and in a certain sense i have uh but not in i didn't have that all planned out back in 1969 when i decided to wind up the partnership there was a time in in the late 60s when my wife susie said to me she said i don't mind being married to the next to last guy in the country to have a crew cut but she's i really wouldn't want to be married to the last guy so at that point at that point i left the crew cut style we had a we had a terrific and susie was great at planning parties and so she was very imaginative we had loads of friends uh and uh uh so i like i liked the stage delicatessen in new york so when we were in new york i'd we'd always go by there susie and i uh so she decided to have a stage delegation party in in omaha and uh i don't know how many people we had we had a lot of people over that uh that night and everybody had a lot of fun it was it was the it was the 1960s and and she was imaginative about parties and and and she was good at it she she threw herself into it and came up with a lot of great ideas and i just went and ate the food and paid the bills the partnership had acquired control of berkshire hathaway in 1965 and although i never took the chairman's role or the president's role i was in charge of berkshire hathaway we owned control of it so i made all the decisions i bought national indemnity i bought this on newspapers for it the fellow who operated the textile business checked with me on buying new equipment and so i was the ceo but i never saw there was no reason to take the title malcolm chase who was chairman was a wonderful gentleman who had helped me in acquiring control of berkshire so there was no reason to change his title he would remain the chairman but he he was not running the business he he let me run the business and there was no need it was clear that buffett partnership was the controlling shareholder when we dissolved the partnership at the end of 1969 and distributed the the berkshire stock uh i took on the title of chairman just to formalize it going forward now that the control block had really been broken up with our various partners but nothing really changed in 1970 from 1969 well i think i think the desire to participate in uh some of the conversation on things like civil rights or or uh the right to family planning or something like that i mean it if i can't speak out on who can i mean you know i can't be damaged in terms of my employer firing me because i made some talk someplace and and uh uh so i've i've had strong feelings on certain social policies uh you can't pop off too too often i mean there's uh some very very rich guy who goes around the pining on everything can get a little get a little boring after a while so i i don't want to do it too often but when i do see myself paying a lower tax rate than anybody else in the office i mean that bothers me then that the degree of inequality in our in the richest society that the world has ever seen uh bothers me i don't want to throw away that greatest society that's ever existed in the process of changing things but i uh i get i feel like speaking out i like running berkshire but i but i can't i can't pretend i'm not a citizen either when i've said at the shareholders meeting that uh i'm willing to work for a very small salary but i'm not willing to i'm not willing to put my morals in a blind trust and uh that does not come with a job so if if people that are shareholders of berkshire are bothered a little bit about me speaking on taxes or something of sort you know they'll either have to accept it or go elsewhere because i i really don't feel i should give up my citizenship just because i have a a job as as head of a major corporation america america has been unbelievably good to me and the and my family i you know there were there's 7 billion people in this world only 320 million plus in the united states i mean i was very very lucky to be born in this country and have and and and in the time when america's prospered like never before so it uh and it isn't because i'm a better person than the guy next door i just i'm wired in a certain way that enables me just like some people to go to chess some people are going to bridge some you know some people are good at writing musical scores i happen to be good at something that pays off enormously in this society would have paid off that well 200 years ago it wouldn't have paid off that well in many other countries so america's been extraordinary for me and and it's going to be even better in the future overall so i just i would like to see everybody participate not equally at all but but nobody should have a bad economic future in the united states we can afford for everybody to have a who's willing to work to get a decent result in the society well the best the the best gift i was ever given uh was to have a father that i had when i was born i made it you know i had nothing to do with that uh i was also i i was genetically blessed with a certain wiring that's very useful in a in a highly developed market system where there's there's lots of chips on the table and you know i happen to be good at that game and other people are wonderful with their hands in medicine they could do things surgically that i never could do other people couldn't be out magnificently there's all kinds of different gifts but i happen to be given one that that has enormous commercial value at this time in this country uh so i would uh but where i've really been blessed is is with the people that i've come in contact with some of them i i'll give myself a little credit for for choosing to be associated with but if you start off with my dad i had no no no uh no voice in that and and just think of this you know wonderful start that gave me in the first 20 years of my life for really as long as he lived well charlie munger has been a wonderful partner he uh he's ungodly smart he's he's he's got a much broader intellect than i do he's he's he's he's a smarter guy in about 100 fields than that i am and he's he's magnificent at being able to condense important ideas into just a very few words and uh he's always honest in in in what he tells me so i i listened to him in fact i just changed my behavior on something last week because of uh of uh probably a 10 word sentence he he said to me in investing he had a big impact on me in in moving me somewhat away from ben graham and looking for really wonderful companies at fair prices rather than fair companies at wonderful prices so so he he moved me toward quality businesses and that was enormously important because it enabled berkshire to scale up in a way that would have been impossible buying the kind of of lower grade businesses we bought at cheap prices originally well susie uh when i was in my teens uh uh i developed uh really pretty decent skills in terms of business or but but i hadn't really come to terms with the world exactly and uh i was an unbalanced individual i may still be but but she uh susie really put me together and uh she was the one that had the little watering can and i was the seed in the uh in the soil but that it took the watering can uh from susie to uh to help me really grow up and mature she was a wonderful person and uh she believed in me she she she she put me together and i would i would not have been uh i would not only turn out to be the person i'd turned up me but i i would not have i actually wouldn't have been as successful in business without that uh she made me more of a whole person she never cared about money or or business at all one time we had dinner with a friend of mine her wolf in new york and as we were coming back on the subway to manhattan he lived out out of ways she said warren she said how many hundred thousands are there in a million uh and at that time i i knew i shouldn't turn the checkbook over well i don't know that you know you'll have to go to rogers and hammerstein or somebody to figure out exactly what happens when you meet somebody and you know that stranger across the room or something of the sort but but i knew she was for me so i i didn't waste any time i i uh i wasn't getting any place for but my pursuit was was avid and and uh so she she married me when she was 19 and i was 21. i bought the ring i told bill gates when i was trying to sell him a rig when he was going to get married in 19 he got married on january 1st 1994 i said i spent six percent of my net worth on my ring for susie so i think when you come out to our jewelry store that that's just it's a guideline but uh you know you might bury it a little bit but six percent is more or less the standard amount the wedding gate was kind of interesting because i was a member of the national guard uh here in nebraska and on april 19th in 1952 the missouri river was coming up over its banks and i was getting married at three in the afternoon and at noon i got a call and the guy i answered the phone and fellow said corporal buffett and i said yes sir and he said this is captain murphy and he said what time are you getting married i said three o'clock he said well we've been activated so be at the armory at five so that was uh that was not an auspicious start for the uh wedding day and then a little while later i got a call from the commanding general of the 34th division and he said i'm countermanding captain murphy's orders so go and have a great time on the honeymoon uh fortunately my uh the original call from captain murphy captain murphy stuttered somewhat and otherwise i would have thought it was one of the the ushers in the wedding or something playing a game out of me i might have i might have made some comment that would have landed me in the bearings for a few months i did not wear my glasses in my wedding i can't i couldn't then i think one of the eyes has been corrected somewhat but uh i couldn't see anything without my glasses and i was so nervous that i i just decided take off my glasses and i wouldn't i wouldn't be able to see all those people out there well she had a fantastic voice and and uh she always likes to sing i like to sing too but unfortunately i didn't have the voice she had but uh so she decided in the mid 1970s that she'd like to try and uh do it in front of crowds and it's no fun initially singing in front of crowd but i encourage her to do it and and she started performing uh her locally some and then she also did a little a little bit in in new york my friend bill rowan we started calling him broadway bill because he went around greenwich village and places lined up lined up gigs for uh she was very very good well i like to eat everything that i had at my sixth birthday party i thought that was i thought the menu there was superb you know with hamburgers and hot dogs and and uh coke and uh chocolate sundaes and so i found what agreed to me at a very early age and i've continued now to age 85 and it still seems to work i've i've really never eaten i don't see any reason to eat your 40th favorite food when you can eat your favorite food and and uh uh i've really found i've had 500 meals or maybe even thousand dollar meals and i found they're not as good as you know what i can have when i get a good hamburger and some fresh fries and a coke so i i don't see any reason to uh to eat what other people like and i know that if i'd been eating broccoli and spinach and brussels sprouts and asparagus all my life that that i don't think i'd have lived this long i i think that uh i think that it would have seemed like a long time but i uh i think my diet has worked very well for me i'm not advocating it for others but but uh it seemed to work very well for me well my mother had a tough time i mean her mother ended up in a mental hospital and and and she already she carried a lot of the burdens of her family her her brother who she worshiped died very young and and and she was looked at as the mainstay and and uh uh you know she followed my dad obviously to washington she pitched in on everything involving my dad but but uh uh she had uh i'm almost sure that they were migraine she they had a different term in those days for him and and so she she uh she had she carried a lot of the world's burdens on her shoulders and and uh she uh she would she could be difficult sometimes and then she could be wonderful other times but but when she uh when she got difficult the three children felt it she was very very bright and she was very gregarious she was a good campaigner for my dad but but uh she'd gone through a lot of strains i mean she after she graduated from high school she worked for a couple years before to get the funds actually to go to the university of nebraska where she met my dad and i think there was a lot of unhappiness which she never talked about you know in her growing up that uh uh affected uh uh her attitude to some extent and i think they didn't call them my i forget the terms that they used in those days but uh but i think they were migraines and and she was in physical pain a fair amount of the time well he had various nicknames for me he'd call me fireball sometimes and uh it would you know i got very interested in the stock market so uh jesse livermore was a famous stock speculator sometimes he called me that he had he had a lot of different names for me that uh that uh but he probably fireball was the uh number one term i had a lot of energy is you know i i still have a lot of energy when i'm doing something i like and and uh i was i was inquisitive and and uh and i like to talk to grown-ups a lot so anytime his friends came over uh uh or the family's friends uh i would have a great time uh uh talking uh i i usually would talk to the men when they came over but if i was wandering around the neighborhood i'd go in and talk to housewives various places i uh and i had a lot of energy and ideas and you know and i'd start little businesses or something of a sort and and i think he was entertained by it and i think maybe that's where the fireball came from well when i first first books i read on investment were actually in my dad's office i would go down on on saturday to he would have lunch down at johnny's cafe uh with us either one or two partners uh uh at the south all my feed company and so i would i i love to go to those lunches but i get down there early and i'd be reading the books in the office and pretty soon i read all the books in the office so i started going over to the public library and i i i you know i love to just run go to the stacks where the business books were and i read them all uh all the investment books um well before we moved to washington when i was 12 and read some of them more than once and uh you know i i basically loved reading and uh the library uh uh we didn't buy books in those days uh the library was uh was a great place for me and i would take the street car down often and go to the ymca and go to the library and and then go home uh around dinner time uh uh i actually got locked into the what was then the university of omaha library one time when i got i got uh terribly enmeshed in in reading in some stacks that were way in the back and they locked the place up and i couldn't get out so i it took me several hours before i could rouse my father-in-law who was a dean there and he got a janitor to finally let me out of the library well when we were in omaha but before i was we moved to washington i would say i was quite gregarious and i was but i was gregarious with adults as well as as kids i was i was certainly shy with girls although that was not unusual in those days but i did i i've always i've i like being with people focus has always been a strong part of my personality if i get interested in something i get really interested and and that was true um about any subject i mean my if i get if i get interested in new subject i want to read about it i want to talk about it and i want to meet people that are involved in it and and uh but that's true of most of my friends i mean charlie munger is a very focused guy that uh for example and and uh uh i don't think i could have done remotely what i've been able to do in business unless i if i hadn't had that really intense focus i mean i i i would go through a 2000 page moody's manual you know page by page at night you know looking at companies and thinking about them and and it it really it paid off my my my two sisters uh uh about equidistant on each side of me a couple years older with doris a couple years younger with birdie and and uh we actually we had a lot of fun together uh uh they you know as they as they grew older that uh you know doris got interested in boys first because she was the oldest and and uh so they were the age difference to some extent affected the relate the precise relationship we had at any time but but but uh i really liked both of my sisters a lot and and uh we were competitive in certain ways uh we used to have spell downs in grade school where you'd have six from each class and you'd go to the next class upward then those 12 would spell words until they're only six remaining and then they would go up to the further class it was always my ambition to move up past doris who was a couple years ahead of me and i'm sure bernie's ambition was to get past me so uh but we you know we had we had fun driving in the cars we had fun singing a whole bunch of different things it was uh i was lucky to have the sisters i had when i was born in 1930 the difference between being a male baby and a female baby was was huge at birth that my sisters are fully as smart as i am uh they've got better personalities than i have certainly they didn't in our younger years particularly and uh no one ever said my dad mother loved us all equally that the teachers took equal interest in it in us but but the expectations were just different because i was a boy and they were girls i mean the the the the thought was for them that you know they should marry well and maybe learn to be a secretary or whatever it might be if they wanted to have some temporary employment before they got married and started having children the expectation with me was that that the sky was the limit and uh it it was just night and day and that that struck me very early on as as really incredibly unfair uh and uh uh and of course i continue to see other examples in my life but the the initial examples really were my sisters i mean here were here were two human beings that uh terrific personalities very bright you know you couldn't have better people and the teachers never said to them you don't have the same opportunities as warren my parents certainly never said anything like that but it was there and it was there throughout the society well in the investment world uh you really if you if you're emotional about investments you're not gonna you're not going to do well i mean facts are facts and reason is reason and and you can develop all these attachments or or or angers or whatever about your stock i mean you may love the ones that go up and hate the ones that that's crazy i mean the stock doesn't know you own it you may have all these feelings about the stock the stock has no feelings about you it's going to reflect what the company behind the stock does so uh our charlie mongers and my investment decisions and our business decisions don't have emotion in them we have plenty of emotions for other situations i mean it's not that we're unemotional about about about the people we care about or anything of the sort but business and investment decisions uh if you get emotions in the equation you're going to do a lot of dumb things i really think that business in america uh obviously the country's developed new products come along and all of that but i i think uh the role of managers really hasn't changed significantly i mean you want people who are leaders you want people who can who can see over the next hill and people are willing to follow them uh you want people that are always dissatisfied uh with the status quo and figure there's a better way of of making that widget or getting to market or whatever it may be uh the market system that this country has enjoyed is is remarkable in terms of unleashing human potential and and it continues to do that decade after decade and that's why in my lifetime alone the real gdp per person in the united states has gone up six for one in one person's lifetime i mean it's when you think of the centuries that in the past where humans at the end of the century were living exactly the same as at the start of the century and then you see the galloping uh uh pace of progress in this country since 1776 it it makes you realize we really have found the secret sauce in a market system now there's a lot of things that that also need some tempering in a market system but but it does lead to more and more uh goods and services that people want than than any any other system in the world the nature of an advanced market system is to concentrate greater and greater rewards on the people that happen to be adapted very well to it and to leave a greater and greater distance between them and the people that absolutely are necessary to their success further behind so the gap will widen uh absent taxation or other government policies that that treat the people that do something to emil ameliorate that difference between those who have market skills of enormous value uh you know just an arbitrary juror in new york who makes you know tens of millions of dollars a year spotting little discrepancies in price compared to a soldier in afghanistan you know is getting shot at for for a pittance per month so it it's a wonderful system for turning out the market system is a wonderful system for turning out lots of goods and services uh it's going to distribute them more and more unequally as it progresses it's a natural phenomenon it's not because people are evil or anything of the sort and and so there there have to be has to be some countervailing activities primarily by government to make sure that in an incredibly prosperous society that people who work hard and are good citizens uh don't end up uh uh really being left behind in a true in an abysmal way the philanthropy comes uh from the realization that money that has no utility to me it can't be a buy me one thing i've got everything i want and i could have everything i want with one percent of the net worth i have or even a tenth of one percent of the net worth i have uh on the other hand that money has enormous utility other people it can it can save lives it can educate people it can do all kinds of things so it's silly for me to not transfer that utility over to uh to people who can use it that it's doing me no good well i wouldn't say that i would say the greed has gotten me in trouble i uh i don't i don't think greed is a big part of of investing i mean investing is an attempt to put capital into places that where it's going to produce a very good return and but i think i think usually greed has some aspect of perhaps of nd in it it's the aspiration just to have have money for its own sake uh uh money really doesn't it doesn't do you any good beyond a point so it's it agreed would be sort of an illogical uh pursuit uh uh i want to do intelligent things and i want to do them i'm doing on on my own behalf i'm doing on behalf of the shareholders of berkshire uh i i would not want greedy partners i mean if i've got greedy partners i've got a problem uh i'd like them to go elsewhere i would like people to be my partners who expect a reasonable return from intelligent decisions made over a long period of time i read the omaha world herald i read the new york times the wall street journal the financial times and and i also read usa today uh well probably the the worst the worst mistakes involve not understanding other people as well uh as you might i mean i'm not as smart in a technical sense uh i'm not nearly as smart as i was 50 years ago if you gave me a test involving memory or you know ability to pick up new ideas or do math in my head or whatever it might be i would not score as well uh as i would have when i was 20 or 30. i think i know a lot more about people than i knew when i was 20 or 30 so that i wish i'd known as much about people when i was 20 as i think i know now and would have been helpful in a lot of ways well there are going to be crooks in every society i don't think our society breeds more of them than other societies but they're they're people that for one way or another uh um go down the wrong path and uh they do that in the business world sometimes they do it in the investing world and uh i think that just because of my background sometimes i can spot the people that are doing it in the investing world sooner than the authorities end up catching up with them so there have been times when both charlie munger and i have pointed out certain activities that we think are either distasteful or dishonest or uh and and but that will that's that will be with us forever i mean that there there's big money in investing in finance and business huge money and there are various ways to cheat and people figure out nuances as time goes by and and sometimes the authorities are very slow to catch on to what's going on uh they there tends to be more of that i believe you can't prove it uh during bull markets than than during ordinary markets people's people's morals seem to loosen up as as stocks rise rapidly in price and and there's a feeling that kind of anything goes uh and that the other guy's doing it so why shouldn't i and that was what was going on in the late 60s when i wound up my partnership there were a lot of people getting very rich by playing games basically in stocks and i didn't like i didn't like my results being compared with their results they were going to beat me in the game and uh and then i didn't want to do what they were doing so uh that's one major reason i wound up the partnership the first time we had our meeting of the graham group was in 1968 and when the 11 of us met with ben graham you know basically we were saying to ben how long can this go on because there are all kinds of games being played on wall street and and the press applauded them and investors applauded them and these people were becoming heroes and basically they were you know they were they were engaged in creating mirages with accounting and uh ben said it could go on a long time but it'll come to an end eventually and of course that's what happened it has to be there honesty is uh you know first of all i have to be honest with our shareholders i've got i think over a million shareholders of berkshire hathaway they're my partners and they have entrusted me with the money and and it's one reason in the annual report i try and tell them about mistakes i've made as well as you know i believe it's an annual report not an annual sales document uh and i it's a lot easier than as charlie says and you know you don't have to remember what you said if you have here if you're really saying what's the truth as you go along when i'm no longer around uh berkshire's culture is so deep and some i wouldn't call it unique but it's certainly special uh uh and it it permeates our board of directors it permeates our shareholders base that permeates our manage managers so i think it would be very difficult to come in and change the culture in any major way i think that that it would be rejected like a like a foreign object uh uh so i i think uh we're so big that we can't have percentage results anything like we've had in the past but we can be a very decent business and i think it can go on uh for a very very long time without changing its its character uh the sums involved will get larger as it goes along but the basic principles around berkshire it's one of the reasons i stick them in the back of the annual report i've written the principles of of the economic principles of berkshire i've put in the annual report for 35 years or so nobody else does that in their reports but those are that's the way we look at at the company and we want our partners to understand that and and i'm not only boxing myself in when i put those in i'm sort of boxing my successor to and to some extent i try to write in the annual report certain things that will box in my successors to some degree but uh because berkshire berkshire has to have to fit it has to be a certain kind of structure and operation uh over the years and i've had 50 years plus to uh to build that structure and i i think that uh i'm sure uh virtually that my successor or more than one will will follow the same general path they'll do things differently obviously but they will do things differently in terms of our the basic tenets of the business i've been very lucky in family i've been i've been lucky and been lucky and didn't want to you know i've been lucky in geography i mean i've been lucky in the time when i was born i mean it would not have been as much fun being born 200 years ago i think about that every time i go to the dentist it's a different world now than that i mean just think of childbirth you know a few hundred years ago or something of the sort and we are very lucky that uh you know at least i consider myself very lucky i was born in 1930 rather than 1730. there's an enormous amount of life how you're wired you know whether i was born female or male 1 was whether i was born black or white i mean it was i mean that was huge you know in in 1930 it's still big but it was it was night and day in terms of the opportunity i was going to have if i've been born black and i would not have you know who knows where i would have ended up but i would certainly would have been you know i would have had a whole different life that had nothing to do with me

Channel: Kunhardt Film Foundation

Views: 37,754

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Id: cd-w9H0G6nQ

Length: 47min 52sec (2872 seconds)

Published: Tue Jul 20 2021