Warren Buffett - A LIFE AND LEGACY 02

moved in in the summer of of 1943. My

dad first lived in Fredericksburg after he got elected and he got elected in the fall of 42. We moved family back to this area, but my dad thought Washington was

kind of a sin city. So, he thought that the that the three children should not be raised in in an area like Washington DC. So, uh we lived in Fredericksburg.

DC. So, uh we lived in Fredericksburg.

My dad had a little apartment up here.

It's about 50 miles away. And that did not work out well. And then that summer, the family decided that we were all going to live together and it was going to be in Washington DC. So my dad bought

this house. I used to store my money

this house. I used to store my money there. I might find some that I left.

there. I might find some that I left.

>> And you were a big booster and helped him get elected every time he ran. You

you were you and your sisters as a family all went all in.

>> Yeah. My one of my surviving sister I Birdie I is 91 now but we talk about that every week.

>> Well I mean you want to win. Sure. I

mean we'd campaign with we gone around to these these uh county fairs and and of course we had this one recording where we Doris Birdie and I sang America the Beautiful while my mother played it

on on uh on this little organ we had at the at the house and and it's a 15-minute program. My dad introduced

15-minute program. My dad introduced each one of us kids and he said there's Doris age 14 and she said something and they said then and there's Warren age 11

or 12 depending on when the date of it was and my line was just a second pop.

I'm reading the sports section and and that was my only line which I delivered flawlessly of course and and then at the end my sisters and I sang America the Beautiful and that ran on on WW and

there was just an outpouring from my dad from that. So they may have run it a

from that. So they may have run it a bunch more times and I'd give a lot to have a copy of that. Unfortunately, I

don't.

Well, one of the first things I did when my dad got elected, I said, I want to take out every book they have on horse handicapping from the Library of Congress because that's the only thing I knew about Congress was that they had

this Library of Congress that was famous for having everything. And my dad said, "Don't you think it's a little he might think it's a little peculiar for a freshman congressman to make that his first request at the Library of

Congress?" And I said, "Pop." I said,

Congress?" And I said, "Pop." I said, 'You'll be running for election in two years. I mean, I will look for you if

years. I mean, I will look for you if you're a kid. So, I ended up with hundreds of books on horse handicapping.

And >> really, that's what you took out of that?

>> Well, that was that was first. More

books on stocks came later, but I was particularly interested in horse handicapping at that time. And what I would do is I I got all these books and I was either a speed handicapper, a

class handicapper. Speed handicapper

class handicapper. Speed handicapper looks at the horses times that they've achieved and the class handicapper looks to their breeding. And I was making a

major decision at age 11 or 12 to be either a class handicapper. Speed

>> handicapp speed was you chose speed handicapper.

>> I was a speed handicapper. Yeah. And

then there was a place on North Clark Street in Chicago that would sell you a month of old racing forms which were daily.

Uh, and they had every they covered all the major tracks. And so I would I would buy these month old things for practically nothing. And then I would

practically nothing. And then I would test my handicapping each day doing 40 races, maybe eight

races at five tracks and test out whether I could my knowledge was superior enough to beat unfortunately which were very large expenses like

maybe 18% or something of the sort. And

that's a big big handle to beat. And and

of course in stocks you've got a positive something. they're earning

positive something. they're earning money, but uh but all you're doing at at the racetrack is trying to beat everybody else that's making judgments about what horse is going to finish

first. And so there is nothing being

first. And so there is nothing being created. There's just a take. So I went

created. There's just a take. So I went from the I graduated finally from the operation that had an 18% tandle against

it to something that's had a very dramatic positive expectancy in stocks.

And >> the Dow Jones average was 100. It

crossed 100 on the day I bought my first stock and now it's at 42,000 or whatever and it's paid dividends the whole time.

You can't find a horse that does that.

>> But what pushed you out of horses into stocks? Was there a moment that turned

stocks? Was there a moment that turned you sou? I I I like both of them for a

you sou? I I I like both of them for a while, but there was one time when I went to Charleston, West Virginia, and I had a couple of horses in mind, but I lost some money on the first race and

then I did the dumbest thing you can imagine was which I just kept betting every race. And when I went home, I was

every race. And when I went home, I was $50 poor, which was all I taken with me.

And that equ was equivalent for delivering 5,000 papers. I was

delivering papers during money. I made

about a penny each and so I had to deliver 5,000 papers for doing something very stupid and I went to the Howard Johnson's and I had a couple of dollars

left. I bought bought myself a fancy

left. I bought bought myself a fancy meal and just sat there and thought about it and thought about it in the trade and that was the end of horse racing.

>> Up next, did you used to tell people to go to hell a lot before that?

>> Well, I certainly did it more before I heard that advice afterwards. It's not

something you could shake immediately, but >> I would say in the beginning you probably were a little more hardressed to drive for the best deal

possible since >> our behavior on in business has changed over time and >> so >> but that is a product enormously of

bringing around the right kind of people. I mean when you

people. I mean when you get to be and I would pick out number one uh a student in effect or a partner of Thomas Murphy if you don't learn

something from that you don't you don't want to learn anything by being a partner of Bernie Mos you know and and I've been so so lucky starting with

working for well working for my dad but working for Graham and all all these people I' I've never had a bad boss And uh that's pretty lucky when you're 94. I

mean, and and I've had the best of them and and I just wish I'd met some of them a lot earlier, you know, but one way or another. And they fortunately most of

another. And they fortunately most of them lived a long time. So even though I met them at age 40 or something, I still had long experiences with with you know

people like Charlie Mer number one, but Tom Murphy in a different way. Uh uh but somewhere ways.

>> What did you learn from Tom Murphy?

>> Oh, I learned how to behave.

And he was probably the best business manager I've ever run into. But he didn't do it

by, you know, whipping people to death for eight hours or turning it into 12-hour days or, you know, it uh it he

he he brought out the best in everybody.

But he wasn't a polyiana. And uh if you'd done nothing but study him, you wouldn't have had to study anybody else.

>> What's uh what's just a lesson you took away? Maybe the first time you sat down

away? Maybe the first time you sat down and had lunch with him or something.

What how did things go? When did you realize that he was somebody special?

>> The first time I I did have lunch with him was when I was about 40. And uh I remember a couple

about 40. And uh I remember a couple things from that. But but it was just a stream. It was it was watching him too.

stream. It was it was watching him too.

I mean, he wasn't behaving inconsistently with what he said. But

he, you know, he he told me uh he says, "You can always tell somebody to go to hell tomorrow." No, I mean I mean just

hell tomorrow." No, I mean I mean just think of how much trouble that keeps shout out because you haven't lost the option. So don't feel that you've only

option. So don't feel that you've only got 15 seconds to say it or 30 seconds.

>> Did you used to tell people to go to hell a lot before that?

>> Well, I certainly did it more before I heard that advice than afterwards. It's

not something you could shake immediately, but I watched it work with Tom Murphy. I don't know anybody that

Tom Murphy. I don't know anybody that had more good interactions whether it was with you know buying businesses whether it

was operating businesses whether it was uh dealing with any person's problems that came to him. I mean, it's just it

was just built into his behavior in in every way and and uh uh there's a few letters or things I haven't written

because I remember that advice and I you know it's it's very human to want to tell somebody to go to hell. I mean,

yeah. Well, everybody, I mean, and when have you ever gained >> I mean, the only thing is you may have felt a little bit better for >> it can be really satisfying.

>> Yeah, it it is satisfying, but do it go go into a do it with a mirror or something, but you you can have a lot of satisfaction the next day if you just keep saying to yourself, you know, you

haven't given up. And uh I just watching him, he he taught me more about human behavior, but it was businessoriented to

a great degree, but it was beyond that.

It was way beyond that. And you find me anybody that dealt with him, worked for him, you know, girlfriends he broke up

with, you know, 60 years ago or 70 years ago. I mean anybody that has a bad word

ago. I mean anybody that has a bad word to say say about him but it was he wasn't a >> polyiana.

>> He made all kinds of big decisions.

Every lesson I learned from him was a good lesson. Doesn't mean I apply them

good lesson. Doesn't mean I apply them all but uh uh you know and you're just lucky when you meet somebody like that in life. And then it's like Charlie whom

in life. And then it's like Charlie whom I met you know when I was 29. I Charlie

and I had more fun on things that failed than succeeded. I mean, we just it just

than succeeded. I mean, we just it just struggles. She's humorous that a couple

struggles. She's humorous that a couple of guys like ourselves should make a big mistake.

It uh there's just a connection and my friends have all been quite intelligent, but they

didn't have to if they get up to a 180 or 200 IQ, you sort of the curve starts bending the other way sometimes. But but

uh but they were all intelligent, but they also didn't all think they had to outsmart the other person.

Murf never made a deal where he tried to extract the last penny. He always made good deals and he and there's number

that he didn't make that he wished he'd make, you know, and but he did all kinds of things for other people, especially me. You you said that you and Charlie

me. You you said that you and Charlie learned more from or had more fun from the things that maybe you made mistakes on.

What What's a project the two of you did together, a deal the two of you did together where things went wrong and then you had a good time as you were trying to figure out how to extract yourselves from it or pay back the

people?

>> All kinds of things. Well, well, we we bought a department store in 1965 or 6 1966 in Baltimore and uh >> with Sandy Goddisman.

>> Yeah, with Sandy Goddisman and it was his his wife's uncle that owned the business. I mean, in Baltimore and and

business. I mean, in Baltimore and and Sandy went in it and his firm took 10%, Charlie's firm 10 took 10% and my firm took 80% because we were larger in those

days than those guys, although we weren't very large. And Sandy and Charlie did not know each other ahead of time and but they both knew me. And

anyway, after we bought it, we we knew we'd made a terrible mistake. It was

just couldn't have been more dumb.

There's nothing like owning something to start. You spent your money then to see

start. You spent your money then to see what's wrong with it. You know, it's like buying a house and finding out that there's a whole bunch of things you don't like about it and except it's not

so easy. And uh and there we were owning

so easy. And uh and there we were owning Hosel going to Baltimore and uh we made a mistake and and uh we all three agreed

on that and nobody blamed the other one ever ever and and actually we had a lot of fun discussing our mistakes. I mean I don't mean that we sat around laughing

about or anything but but just just the very action it was like it's like being in a war I mean or something. just pulls

you together when you've got a common problem and and you've got wonderful people in a foxhole with you and that brings people closer together.

>> You have had an extraordinary um number of just spectacular friends. That that

can't be coincidence.

>> Well, it it No, you shouldn't be selective about your friends and hope they aren't too selective about theirs.

No, you should be trading up all the time, but but but you shouldn't be doing it in a deceptive man m man m man m man m man m man m man m man m man m man m man m man m man m man m man m man m man m man m man m man m manner >> how I mean do you do that conscious consciously or

>> I don't I don't think so. I think you're just attracted to people that I was attracted to people who were interested in the same thing I was to an extent >> maybe not as intense as I was about some

things or you know they had different backgrounds and all kinds of things. Uh

but you know I wouldn't have traded any of my friends for anybody else. I mean

you know and and we we ended up liking to do things together. I formed that so-called Graham group that >> Yeah. Just the Graham group was

>> Yeah. Just the Graham group was >> Yeah. That became a whole bunch of

>> Yeah. That became a whole bunch of different people from K. Graham who it wasn't named after. It was named after Ben Graham. And we we met for

Ben Graham. And we we met for close to 50 years about every year and a half or so on average. and and all of these people

liked each other and they were regarded in their own industry as you know unapproachable and they just they just melded together so well. We started out well, we only thought it was going to be

held once. Ben Graham was back in the

held once. Ben Graham was back in the country and I called 11 people and said, "Do you want to go to San Diego?" And it wasn't as easy to get

San Diego?" And it wasn't as easy to get to San Diego quite as now. And and and and none of us had that much money, although we all had more money than we'd started with. But I I called him and

started with. But I I called him and said, "Ben Graham's in town, and he probably won't be in this in this hemisphere, you know, in our future."

It's a rare opportunity to see him. So,

uh, he agreed that if we come out, he'll spend a few days with us. Charlie was

there and I didn't know Tom Murphy then.

Uh, but the person that introduced me to Tom Murphy was there and then a bunch of classmates, all kinds of things. And we

had such a good time that we decided to do it again. Well, Ben wasn't going to stay in the country anymore. He was

going back to France. But but the next time we did Florida and we and again we just had a lot of fun and so it became something and then I would assign

different topics you know that initially they'd be more financially oriented than they were as you could actually watch the sort of development of the the group

into uh new activities as I added people over the years and they all knew me but but most of them knew each other to some degree beforehand. and and we just had a

degree beforehand. and and we just had a good time for 50 years and people entered into it in a uh a really unusual spirit of no ballooning, you

know, I mean there was nobody that was more important than somebody else in the group or and uh >> but with the point of learning lectures to a certain extent extent

learning that on things >> well the learning is always interesting.

Yeah. I mean there's nothing more interesting than well there's probably a few things we're going to do but but long term learning is uh learning is

more interesting you know I mean the idea of a library just think of just a few hundred years ago I mean you know there wasn't anything to read by at

night and I when you think of what life was like compared to what it is now it's just it's wonderful now for it's still for a limited number of people. There's all kinds of people

people. There's all kinds of people particularly outside the United States, but I'd rather be born into almost the poorest family if I could were to be born today in the United States than to

be born any place else.

>> So, you think the American dream is alive and well?

>> I'd love it if Yeah. If it didn't come with the power to destroy the planet, I would I would say that there'd never been anything remotely

as interesting as being born in the United States today.

>> Do you worry about artificial intelligence?

>> Yeah. After a few times when people pretending to be me of going out and scamming people, we just found out about one of them. Even the the the the people that are smartest about said they don't

know where it's going. And and it's one thing to I guess say you don't know where you're going if you're if you're Columbus leaving for but you can always turn around and go back. But the the

genie is out of the bottle. I mean that if someone wants to impersonate me in a way that's

scam people 10,000 miles away or in Omaha, they can they can do it and they can imitate my voice and they can imitate my appearance and they can talk.

They can fool they could fool my my kids or >> what do you do to stop that? What do you how do you combat it?

>> Yeah. How do you put the genie back in the bottle? That's the same problem we

the bottle? That's the same problem we have with the nuclear weapons.

We know how to build them and we know how to build bigger ones all the time.

The problem is so do other people and and they've got no use except to kill people or deter the other guy from using his. I mean that is something to have

his. I mean that is something to have created in the world. But it was absolutely necessary to do it in World War II when I mean there wasn't any

doubt the Germans were working on it.

You can go to to to search and read the letter that was sent to President Roosevelt just a month before the

Germans in invaded Poland. I mean

doesn't mean I know anything about know about uranium 235 or anything. I I I I don't but but I I do understand human behavior. I mean it's hardly

behavior. I mean it's hardly complicated.

>> I guess when you think about your evolution in thought, we'll go back to this thread of how your views in business have changed and you've talked a little bit about how

your assessment of people um what you learned from Tom Murphy along the way, but just your evolution of thought in business, how would you sum that up? How

would you say you're different today?

>> A lot of things that I thought I was learning about business that weren't true.

>> Like what?

>> If you talk about boards of American companies, that's pretty important. I mean, you're talking

pretty important. I mean, you're talking about the whole country almost with public companies. And uh the people are

public companies. And uh the people are the independent directors are are not independent. Usually they're

they the money is useful to them and >> the money they get for being on the board >> being a director. Yeah.

>> I mean it's the best job in the world to get 250 300 maybe five even up to $500,000 a year for doing something that's quite pleasant. Usually they give you the transportation and they have

cars waiting to take you around everything and and everybody's polite and everybody love that job. I mean, who

wouldn't? I mean, if I didn't have any

wouldn't? I mean, if I didn't have any money and somebody said, "Warn, how would you like to be a director at the XYZ company and you'll make 300,000 bucks a year and all you have to do is

show up, meet some other nice people, and just don't don't burp.

Don't say anything. Don't don't screw it up." And

up." And I mean, if I go to that meeting and somebody else, you know, has had 10% of the stock of the company and

everything else, but they're they're not independent, you know, in theory. And uh

what's going to be in the back of my mind? I know how to get a raise from 300

mind? I know how to get a raise from 300 to $600,000 a year. And all I've got to do is when some

some somebody is called to come up with a quote good end quote director that uh they say, "Well, I know this guy in Omaha. He'd be a good director." And now

Omaha. He'd be a good director." And now you got two people that are out there that'll recommend you to somebody else because you didn't really cause him any troubles. And if you're the CEO and you

troubles. And if you're the CEO and you wanted to get paid more money and and so on, >> you may put them on your compensation committee as an independent director.

>> I mean, >> yeah. And the whole idea getting

>> yeah. And the whole idea getting independent directors is that they are independ that they don't have an interest and you couldn't have a more

obvious interest than doubling your you know if you aren't making any money you know you're you're head of a school someplace or something but they they don't pay you very much and everything

you make 300,000 bucks a year and you can quit that damn school that's paid in the neck and and they'll keep you around probably till you're 75 and if you're a berer you might get to 90 and be on the

board, but we don't pay that. Well,

but it incentivizes, you know, Charlie was always a huge preacher on incentives. And what do you incentivize by this? While I'm on the

subject, I mean, I'm looking at our proxy statement, which is 20 pages long, which we sent out the other day. And

when I started in the business, you actually got notice of annual meeting.

Sometimes it was two pages long or three pages.

Now almost everybody has a 100 pages or more and quite properly courts or ruling bodies or whatever

thought you know the shareholders are entitled to know how much the CEO earns and there ought to be an explanation. So

they stick in there one item that is how does your salary compare to the average person's salary? It's like 200 to one

person's salary? It's like 200 to one and they think that's going to embarrass CEOs. And of course what it does is if

CEOs. And of course what it does is if and I've been on 20 corporate boards uh aside from Bergkshire

CEO of ABC looks at this thing and he looks at the XYZ company and he thinks I'm smarter than these guys and I'm working harder. Whatever they get, I

working harder. Whatever they get, I ought to get that plus some more. And

then you get this ratcheting effect and the compensation committee, you know, is gets some expert that that the corporate secretary picked out who's got the same

interest. And and you couldn't you

interest. And and you couldn't you couldn't think of a way to incentivize people more to kick up their own salaries than have them read what somebody next door is making. You know,

it it it's just exactly the opposite of what what's intended. And

the independent directors are the last thing in the world they want to do is get kicked off a board. They'll never

get another assignment again. And they

they aim to please and you shouldn't expect anything else. You know, uh >> so Bergkshire does things very differently than other companies.

>> We do it differently because we actually thought through what we've thought through all our policies. That doesn't

mean we've come with the right answer.

But at least we've thought about them and we say what does it incentivize and what is an incentive at Berkshire incentive is obviously is to have a bunch of people who are thinking about

all the other shareholders and who do not really have anything to gain.

>> So you don't want Bergkshire to conform to what everybody else is doing.

>> I want I want Bergkshire to attract people that are smart about business.

You want them preferably with an investment that's significant to them which they bought on the same basis as the other shareholders.

Uh and you want to make the job interesting but not remunerative.

>> What else do you think is stupid in business these days?

>> A lot. Uh

well I would say I I'll give you one example. It's not quite current, but

one example. It's not quite current, but but I think it's very stupid for the CEOs or somebody represents the CEO

every couple of months to do the investor relations calls they do if if they conduct him in a certain way. I mean, I'm not saying

that all of them, but so many emphasize here's what we're going to do.

I'll give you an example I'm familiar with and and uh and I don't even know who started it, but at Wells Fargo many years ago, somebody thought it was

important to emphasize how many different services people signed up for at uh the company. Once a

CEO has done that for many months, a they really can't reverse themselves and say this really wasn't important or we find out that it backfired or that just doesn't happen in this world. And then

they hand the company off to the next CEO and the next CEO, they get on the first call and they say, "Well, gee, John Smith that ran this place was doing

it all wrong." You don't say that. And

so you continue the process and you keep emphasizing and nobody's looking at the fact that that's perverting the behavior of millions of people down the hundreds

of thousands that work down below. And

when you do it on, you know, on calls that go out to people that write stories about your about your call every time that takes place.

You don't want to stir people down the wrong behavior. I mean, it's it's like

wrong behavior. I mean, it's it's like with your kids. I mean, they're going to watch how you behave, not how what you what you say. And at first, they may give you a little leeway at first while they're learning the ropes, but after a

while, they they know they know what you're doing. And just think of that, if

you're doing. And just think of that, if they can put some more business in the last quarter or store up a little piggy bank to they're going to do it. I mean,

it's and they're serving their master, you know, in in effect. had. You don't

have to issue any instructions to that.

And believe me, having been at 20 companies, I've seen a lot of that by people. They wouldn't think of stealing

people. They wouldn't think of stealing your newspaper thrown on your on your door, but they they don't realize the impact of they like to play with

numbers. And once you start playing with

numbers. And once you start playing with numbers, you don't quit. And once you have somebody that handed you the reigns to a company and they've been playing with the numbers and you say, "Well,

we're going to give up playing with the numbers." I mean, you just don't do this

numbers." I mean, you just don't do this in that world like >> outside of the mag seven, Berkshire Hathway is now the most valuable uh

company took a long time >> in the S&P 500, but it's something you built. How how did things change along

built. How how did things change along the way as you got bigger and bigger? it

got more difficult and and I mean because it's harder to do it's harder to compound extremely large numbers than small numbers and I've always known that

I mean when I had $112 to buy three shares of city service preferred doubling my net worth was not a remote possibility I mean I just had

to go out and you know sell more bottles of Coca-Cola do something door to door so there's just no question uh we can't we can't do what we did before. That

doesn't mean we can't do anything, but we can't we just can't do it.

>> You you've gotten perhaps more conservative with time. I mean, you've always wanted a a buffer of cash around.

Um and that that number's gone up over time. I I remember when it was 20

time. I I remember when it was 20 billion, >> maybe 50 billion.

>> Well, that's external circumstances. I

mean, we believe me if if if after we get finished talking, you say, "I've got a great hundred billion dollars in your idea." Uh, I

would say, "Let's talk."

>> I don't.

>> Well, but uh that there's always the chance that tomorrow somebody will say that to me or I've got something >> because now you have I don't know what the latest cash amount is. It's over

300.

>> It's over 300 billion. Well over 300 billion.

>> It's well over 300. It

>> it's more it's more cash than the value of all of the stocks in the Footsie 100.

>> Yeah. And it means that when I look at the stock market, when I look at companies of a size that would make any difference >> to our total, I don't see anything of

Well, we're buying one or two things, but but it's peanuts.

But I'm willing to spend a hundred billion this afternoon.

Yeah. Glad I'm here today.

>> No, I I'd rather have the hundred billion in the really good business bought it at a sensible price than have 100 billion in cash. I know the cash I

mean it's zero levels necessary, but cash is not a good asset.

>> Yeah, >> you need you need oxygen. You know, you don't you don't need to be surrounded.

You don't have to pay a lot for it or anything like that, but you do need oxygen. And if you're ever without it

oxygen. And if you're ever without it for four or five minutes, you know, you will learn and cash is that way. So you

always you always need to have it available because you do not know what will happen. I do not know what the

will happen. I do not know what the stock market will do and I do not know what business will do. I started out with that assumption. You know, however many years ago it was and I haven't

learned anything about what the stock market is going to do. I didn't find it.

I may have read every book in the public library, but I didn't find the answer then to the question of what the stock market is going to do next week or next month or next year. I tried it all. I

did charts and lots of statistics, all kinds of things. I I was looking for something, but it turned out I was looking for something that in my opinion doesn't exist. And but I still found the

doesn't exist. And but I still found the game interesting. So then I looked at it

game interesting. So then I looked at it through a different set of glasses that Ben Graham handed me and I saw this was a game you could you couldn't you

couldn't lose really if you followed his rules.

>> Coming up, >> you know, he said if you're super rich, you should leave your kids enough so they can do anything but not enough so they can do nothing.

you have have said that you're going to have 99% plus of your money that is given away to try and solve some of those problems. >> It won't solve them, but it'll

it can help solve certain specific problems. If somebody's going, you know, can't doesn't have the money to go to school and and you know, and a scholarship does, I mean, it does some

good, you know, and and uh how well you administer something like that. And you

know, how you do the right thing, but there are certain problems money doesn't or can't solve. And when I first thought about philanthropy, I I thought that

essentially was the the threat that the Adam Bob presented. I mean Einstein in August of 1945 when I was 15 said that this changes everything in the world

except how people think but people have thought about it ever since and they still haven't the only progress they made is they've gone from what they thought was one country that would have

it and then when the Russians or the Soviets got it uh you know we were terrified with the idea of Soviets and the United States with two pretty sound

leaders I mean between between the Kennedy now we have eight going on nine and and we know we've got some people that scares the

hell out of you if they got a pop gun nuclear weapon and the game hasn't stopped but it was a lot better when only one country had it than one more I mean the difference between two

countries having a weapon that can destroy each other and one was huge but now since then you know Now, the two were the good old days.

>> Your your philosophy on on philanthropy again has changed. You mentioned that was at the beginning and you've gotten criticism your whole life for not giving away more money sooner.

>> You know, if you looked at the the people with their future and with funds, you should use the people who are going

to use their money unintelligently.

You should have them fund the current expenditures and you should have the people who are going to build the funds for the future uh actually accumulating your paper. have that accumulating their

your paper. have that accumulating their money because you're going to compound it into larger sums and you're going to have it more intelligently invested and that sounds very self-s serving which it

is you know and and and uh so we we did it much more slowly and I think I would still

do the same thing but I would have hoped for a better result and I gave up on the u in effect on the nuclear money >> solving that problem >> I don't know how money solves it.

>> I don't think I can drop dollar bills from the sky and get somebody to get rid of their nuclear weapons.

>> You now have >> if I if I could if I could lay out whatever I've got >> and north of >> and I could and I could pick out three countries >> that would permanently get out of the

nuclear game, I I'd do it in five seconds. I wouldn't wait around them.

seconds. I wouldn't wait around them.

I'd die or do anything else but just do it. I mean, that would really be

it. I mean, that would really be something.

Well, well, now you have north of $150 billion dollars and growing and >> well, when it's growing will depend, but I won't call it >> but the odds are grows.

>> Yeah. What do you want done with this?

You're not going to sell a single share of Bergkshire while you're alive. You

>> Yeah, but I'm not going to live that long, you know? I mean, I'm And my kids are willing to do it. I trust

them 100%. I I've sat down with your three kids uh recently and talked to them about how they see all of this, just the responsibility,

>> the enormity of it.

>> The three of you um your father has told the world are going to be responsible for figuring out what to do with all the money that he has built up in Berkshire

>> over the last 60 years. Um,

>> what did you think when he started telling you that when he started getting to you guys? When when did he come to you? What did he tell you? What were

you? What did he tell you? What were

your thoughts?

>> I thought, well, we better get along.

>> Yeah.

>> Two years ago. A little over two years ago.

>> Yeah.

>> Yeah. What? How did What? I

>> Yeah. I I don't know exactly.

>> You sort of started talking about it.

>> Yeah. I don't even remember.

>> It was probably Marchish two years ago, so whatever. Yeah. Um,

so whatever. Yeah. Um,

yeah. And you know, just the idea of, wow, you tap dance to work every day for 60 years and then boom, >> you're gonna >> There you go.

>> Yeah. Exactly.

>> And I don't really remember that it was like he some big announcement to us. He just sort of started talking about it.

>> Mhm. Yeah.

>> But he kind of >> there were hints kind of as we went through the wheels at certain kind. I

mean, it kind it kind of some of it evolved and then he just kind of decided, >> but I think there was a little bit of, you know,

>> um, telegraphing of some of it, not exactly what form or how it would happen, but, um, because we we went through mo, you know, when he would do a new will, we would sit down and he would

say, you know, you have any questions or ideas or, you know, whatever. He he

became really >> pretty open about discussing that like at least 10 or 12 years ago.

>> Yeah, he's been very open about because he's, you know, the will's gone through a few iterations over the years and >> he's always been really open about talking about it and,

>> you know, if we have any questions and >> I mean, I'm always have little notes written all around the >> I mean, he's been open about telling the world that, too, that he thinks it's the right way. Yeah. That that's the right

right way. Yeah. That that's the right way to do it. Especially when your your kids are older, you don't want to leave questions afterwards and you don't want them wondering why you did things.

>> As soon as you did that, all my kids called me and said, "When do we have our meeting?" No, I'm kidding. But

meeting?" No, I'm kidding. But

>> but the again, the big thing is he amassed this wealth. And so to not be left with a sense of this is what I'd like to see happen with it. I mean, he

thinks things through so thoroughly from the time he was in his 20s writing a friend saying, "I know I'm going to be wealthy and I don't want my kids to be," you know, he's known for for forecasting

what's coming. I mean, duh, in terms of

what's coming. I mean, duh, in terms of the work he does every day, but uh and really thinking it through and and so to put this out there without giving us any

explicit instructions. He's given us

explicit instructions. He's given us some sense of what he would like to see happen in a abstract sense, but there's never been and that, you know, again,

frankly, that's a little bit gee, I wish we could have a little more guidance because it's your money, you know, it's not ours.

>> Yeah. But that's consistent even in some of the things over the years with Bergkshire because he knows things are going to change, >> right?

>> And he can't predict.

>> Yeah, he can. And so,

>> you know, he he's >> provides what he feels confident will make sense at the time or at least thinks will make sense at the time, but not, you know, not try to predict it, not try to

>> that's Yeah.

>> He said years ago when he's talked about just about STB foundation work, he has said um you know this is way before there was as much money as there is now

and he has said you know this is what I think matters now my mother obviously was also clear about that but he's also always said I don't know if that'll be

true in 20 years after I'm dead or 10 years after I'm dead or whatever and so he's he's always I think not wanted to constrain us with >> you know here's what you have to spend it on

>> because he would say that may not matter and then something else will matter more >> yeah So what what guidance has he given you?

>> The only thing I've heard is what he's also said publicly really, which is he hopes that the money can go to

uh people, you know, what word do you use? less fortunate, you know, below the

use? less fortunate, you know, below the poverty, you know, whatever it is that it would >> uh in some way affect a population that that normally doesn't have the same

kinds of opportunities that certainly we have and and a lot of people don't have.

That's all.

>> Yeah. The biggest challenge will be >> uh balancing the fact but he he he has provided when I say this he's provided

some uh cushion on this but you know balancing the fact that he wants to see this money spent in 10 years

uh more or less and then balancing that with how you lose lose control over Berkshire voting shares. I mean that that that's the big impact. Yeah. That

that you know and you can't figure that out until you're in that moment and as some time starts to go by because there's going to be the dynamics change.

Um there's going to be things that happen that no one on that board, none of us can try to, you know, anticipate.

Even we can anticipate some things. Some

things will be obvious and others won't be so obvious and you don't know who they are, you know what they're after.

>> So, you know, that could affect how fast you want to lose or give up, right?

>> Um, >> you know, voting power, >> right? And it feels like you have a

>> right? And it feels like you have a little flexibility on that count too, just as >> it has gotten more flexible. Yeah.

>> Yeah.

>> What did you think uh when he said that you three were going to be doing this doing it together? It had to be unanimous and you're in charge of all of it. Did you want the job?

it. Did you want the job?

>> Nope.

>> Peter really didn't want >> I didn't want and I made that Peter >> and and honestly when I called him up and said, you know, I want to opt out.

Uh he said, I don't blame you.

>> Yeah.

>> We didn't say that to all of us.

>> He actually thinks it's kind of funny that we have to do this. Yeah.

>> And understands that it'll put us obviously enormous pressure on us. And

so the idea again like we've been saying around what are we going to do? It's

like there's too many variables. We have

no idea what we're going to do in this moment. And

moment. And >> uh and that's great that we all know and agree that it's we can't start saying this that this. Yeah.

as a parent and an outsider watching this, the vote of confidence in the three of you, how much he trusts you is the thing that kind of jumped out the most. Does that hit you, too?

most. Does that hit you, too?

>> Yes. And it's very nice.

>> I mean, you know, really it is it's a huge giant compliment. I think that um none of us you know so we have a very different

view of it growing up in the environment that we grew up with and how we see you know my dad now we used to see my mom so I think you know for us

in a way it's a a surprise and in a way it's not a surprise he knows 100% that we are going to try to execute exactly what he asks us to do and then

he knows that we've had a lot of experience now understanding um how to figure out the things that we don't know today and how to do those

efficiently and effectively in the future. So, you know, to to me um

future. So, you know, to to me um in one way because of how we grew up and the things that we listened to forever from him >> uh it was a surprise. Yeah.

And then in another way it's like I don't know he gave us this opportunity for several decades now to figure out how you give money away um how you do it

effectively how you do it efficiently and how to make those decisions. So in

that regard you know I would say it's not a surprise because he kind of began preparing us for it.

And I would just add the other part of this I think is that he he knows nobody can do it certainly perfectly and nobody is. So the only reason why he lets me do

is. So the only reason why he lets me do it but >> I mean there is the element of okay nobody's going to do this

it's unfathomable what what we will be charged with >> uh and why not us who's closer to the source and has grown up and all the

things. So um but

things. So um but >> yeah there's an element of it's it's a beautiful gesture and and it's a convenient gesture to some he would say that you know and okay yeah

>> but when you start trying to write 200 and $300 million checks >> you know only institutions can absorb

those or governments and I'm not I'm not a big fan of writing checks to institutions or governments >> um so you know some ways we're going to have to make some decisions that we

typically wouldn't make, but we have to make sure that the money's used and used as well as it can be used. So, they'll

be we'll be making decisions that we typically wouldn't have made today sitting here >> and we'll make some mistakes.

>> Oh, sure. Yeah.

>> Yeah.

>> I'm good at that.

>> And that's okay.

>> Yeah.

>> I do that all the time. Well, I mean, it's it's just it's interesting the the way your dad set this up that it has to be a unanous unanimous vote that everybody has to agree.

>> I mean, it's it's kind of brilliant, but it's also kind of like, oh my gosh.

Yeah. How do we >> I don't think that would be a problem, though.

>> No, it's really because the you know, social media when that first came out, I'll tell, oh my god, that's going to be my I'm thinking you're telling us more about your childhood than you are about ours.

>> So, there's that. Yeah. I I

>> you know and and we'll make some trade-offs with each other.

>> Yeah. I mean there's so much money. I

mean getting in a fight about it is ridiculous.

>> Crazy, right?

>> You know, pop culture has succession or you know these various shows that show all this stuff and that's what people love to feed on. It's like where's the

problem going to be and all the and we have had no trappings of any of that growing up.

>> So we're just not it's We're not that >> we grew we grew up expecting nothing to be honest. I mean to put it simply not

be honest. I mean to put it simply not to but I mean you know we we were told that we had to figure our own stuff out and we were allowed to fail and make

mistakes and then we understood the consequences. Um and so I think I think

consequences. Um and so I think I think Peter's really right on this that you know you watch the show >> you say that again.

>> Yeah I think you're right. Yeah you

won't hear it again but uh but you know it's it's like watching the show Dallas or something. I mean, that's been out

or something. I mean, that's been out there for a long time, but you know, all this stuff. And it's like,

this stuff. And it's like, >> we don't have any of that drama. We

don't have any of that. I mean, it's just it's not like it just doesn't happen. And so, I think people have this

happen. And so, I think people have this false, well, not everyone, but you know, some people have this false impression >> of what our family's like.

>> Uh, I think most people probably have a false impression's like.

>> And so, that would then, you know, >> it would extrapolate that into this whole idea that we're going to give away all this money. How the hell are we going to get along and do that? And I

just don't think it's going to be hard.

>> You know, my dad wasn't rich and famous when we were kids. We didn't we did not grow up like people probably think we grew up >> for sure.

>> And we didn't. So,

>> yeah.

>> How did you grow up? Describe it.

>> Around the stable. Normal.

>> Yeah.

>> I mean, we grew up, you know, we were certainly very fortunate. We didn't need anything. But, you know, we went to

anything. But, you know, we went to public school. We lived in a regular

public school. We lived in a regular neighborhood. We hung out with our

neighborhood. We hung out with our friends. We um didn't with the exception

friends. We um didn't with the exception of a deal Howie made with my dad, but we didn't get cars when we turned 16. I

rode the bus to school, >> you know, until Yeah. until I got out of high school. We didn't we just we grew

high school. We didn't we just we grew up in what I would call sort of a normal >> middle class on the upper side of middle class, but it we you know, we weren't living in the rich neighborhood. We

weren't It was pretty normal.

>> You didn't even know what your dad did at one point.

>> None of us we didn't none of us really.

>> You have the story. Yeah.

>> Yeah. Well, that was in first grade when we had to fill out those census cards or second grade and I wrote my mother told me to write security analysts and I thought he checked burglar alarms.

>> So, there's that. And then in my career, most people thought it was related to Jimmy Buffett.

>> But, you know, we used to I mean, not that there's any big deal, but you know, we we earned this allowance for, you know, cleaning out gutters and cutting the lawn and rigging leaves and stuff.

But he but but but Warren got pretty clever and he started giving it to us in quarters and then he bought a slot machine >> dimes.

>> Yeah. Dimes dimes at first. Yeah. And

then he bought it all back every time.

>> Yeah. And then he bought the slot machine. So we would he would get most

machine. So we would he would get most of his allowance back. At least with me he got a lot of it back. But I mean >> we were all up there. The neighbor kids would bring their dimes over.

>> Yeah. He trying to get three watermelons when you pulled the lever.

>> Yeah. So you know >> So teaching you about gambling along the way too, right?

>> But but we never did. I mean, I'm about the most anti-gambling person there is.

We, you know, >> because you lost all your dimes, >> right?

>> Yeah.

>> But we all had jobs, too, when we were get, you know, I mean, it was pretty, it was >> pretty normal, which I'm grateful for.

Now, >> I think Susie made this point that, you know, we weren't uh we we weren't my dad wasn't rich growing up, >> you know. I mean, we when we grew up, he was driving a Volkswagen for a while.

Then he had to start picking Yeah. He

started having to pick business associates up at the airport. So, you

know, he he upgraded to, you know, a Cadillac. But, you know, I mean, it was

Cadillac. But, you know, I mean, it was only because he had to. It wasn't

because he wanted a Cadillac. He didn't

care what car he drove.

>> Yeah.

>> Yeah. And my mom used to drive, gosh, she would take me to my after school stuff in Uncle Freddy's old beat up station wagon and I was so embarrassed because it was so it was like it's like gonna break down any time. But, you

know, she I think she did it to prove a point to me. Like, it just doesn't matter what you show up in. I mean, you know, >> what what do you think that that did to all of you? I would imagine at the time you may not have been super appreciative

of it, but what what do you think how what impact did that have on who you are today?

>> Well, one thing I think that had really a huge impact was just my living in the house with my mother in general.

>> Yeah. you know, she was so uh active particularly in the North Omaha community, but she was very active in the volunteer things she did. Also,

Planned Parenthood. She was president of Planned Parenthood. Um, and she just and

Planned Parenthood. Um, and she just and she lived it. She didn't just write the check, she lived it.

>> What lessons did you learn from your first wife, Susan?

>> Oh, well, I mean, she she well, she understood people in life way better than I did. I mean, I I knew a lot about stocks. I I knew about a lot

of things, but she knew a lot about human beings. And uh but she wasn't

human beings. And uh but she wasn't interested in money at all. She wanted

to be sure we had enough. I mean, leave it to me to be sure we had enough. But

if I told her we were living on $175 a month, which I think was the original sum, I mean, that that was fine. But uh

she would occasionally he asked me, "Are we rich yet?" and and I would say, "Well, we're getting close, but just give me another year or two of copout."

But, uh, it it didn't really mean anything to her. And she would use it for other people, you know, in an instant. And she would not only give her

instant. And she would not only give her money, but she'd give over herself. And

so, she really meant it. And

fortunately, the kids took after her.

>> What's an important lesson you've learned from your wife, Ostred? She came

from a much tougher life and and she and Susie were very close and Susie did not want to the life of being the just Mrs.

Big in Alma or something like that and and so Ashton moved in and the three of us lived happily ever after. But but

it's it was a very strange arrangement but it it it worked for all three people. But Asher would do she would

people. But Asher would do she would rather do something for someone else than do it for herself. I mean it's genuine. It's not contrived that if she

genuine. It's not contrived that if she looks that way for a week or a month that somehow it'll benefit her later on or anything of the sort. I mean, she is

she is exactly what she seems to be and and uh she's the same person that I started living

with, you know, but 19 78 or thereabouts and and uh that's who she is and that's who I like to be with.

>> Part of your thoughts on philanthropy evolved over time. You and Susie had some thoughts that you talked about when you were very young.

>> Yeah. If you look at my will from I've got one will that goes back to when I was 30 or something. Susie and I both only agreed on what should be done with

money. And and I said and uh that I

money. And and I said and uh that I would compound money better than most people. And so that that that it made

people. And so that that that it made sense for me to be a saver during my life because it uh typical saver would not accumulate what I was going to

accumulate and that she would outlive me and disperse it. And now we did some things before that but that's when the big money would hit and uh then she died

first but the idea was that uh she along with help in doing it and everything but that and we never dreamt that the sum would

get so large but I dreamt it would get a lot larger than she dreamt it were and it didn't really make any difference to her and and and she would have done it

earlier but she understood that Jenner stood the math of what I was saying. She

just wasn't as impressed by it as I was.

>> How much did you think it would eventually be to give away?

>> Well, I didn't think I'd live to be 94.

You know, let's say I died when my dad did at 60. I know it. You just don't know what. But I did think that. Well, I

know what. But I did think that. Well, I

I always thought we would be rich by general standards by the time I was 30 or thereabouts and which turned out to be true. Uh but it wasn't super

rich at all. But I also knew that it would just keep it would keep growing but I didn't you know my dad had died at 60 and if I

died at 60 it would have been a fraction of what it what it is now. But an awful lot of people would be using the excuse never to give it away. And and

I I never I didn't I didn't feel that way. I mean, we were always you look at

way. I mean, we were always you look at the the wills I wrote. I mean, that we provided for the foundation we had,

which was penis. And and and uh we did change our ideas on how much the kids should have.

>> You had to drastically rethink things when she passed away, though.

I have roughly 14 and a quarter million shares of BT stock and by letters which were delivered earlier today I've committed

uh 12 million50,000 shares. They're earmarked held by me.

shares. They're earmarked held by me.

But every July, I will be giving uh a million shares to

the Bill of Melinda Gates Foundation. Uh

did I say 10 million? I meant to say 10 million. And a million shares to the

million. And a million shares to the Susan Thompson Buffett Foundation. and

350,000 shares each to the three foundations headed by my children Susan Howard and Peter and uh that will continue

throughout my lifetime.

>> What what has your I mean your dad has evolved over your whole lives with him in terms of the basic ideas of what he wanted to do which was to give the money away but how he wanted to go about doing

that has sort of evolved. At one point it was the Bill and Meinda Gates Foundation where it was funneling a lot of this the money. Um what's your view of this evolution and his thinking through this? What's it been like from

through this? What's it been like from where you all sit?

>> It just seems natural to me to be honest with you. I mean it's not

with you. I mean it's not >> he don't you think he's I think he's really he's mellowed. He's evolved. He's

grown. I'm trying to think what other adjectives, but since my mother died, >> um I think um I I keep saying to people, you know, he

he turned out he was listening that whole time.

>> Yeah.

>> Um it was just fascinating to me how you could kind of see the wheels turning in his head in various ways after she died. I think he knew he needed to step

died. I think he knew he needed to step up.

>> Forced him to change.

>> Yeah. and he needed to step up and Yeah.

And he had to he mom wasn't there to >> to be the person who was >> the buffer >> the buffer the person talking to us the I I always say the governor. I just

think it's been so interesting to watch him evolve through all this. And also,

you know, she died in 2004, so 21 years ago. And um I think his his thinking

ago. And um I think his his thinking about things comes from a lot from her.

Um and now uh well with the gate, you know, with the gates when he when he gave the money away in 2006, we were how many

years younger? Almost 20. Horrifying,

years younger? Almost 20. Horrifying,

but true.

>> Yeah.

>> Um you know, and we had very little experience. And I think he's watched us

experience. And I think he's watched us over the last 20 years.

The other thing that I think has helped um first of all it's easier to get along when things are set up the way they are with three separate foundations. I've

encouraged friends of mine who have a lot of money who have their kids in a in a foundation to split it up. You know,

everybody because some people have said to me, "Oh, but I think they'll it'll help them get along better." No, it'll help them not get along better is the truth. Um, so I think that was really

truth. Um, so I think that was really smart on my dad's part to do it. Well, I

guess mom was alive when that happened.

She probably was the one that thought of it.

>> I'll give her a lot of the credit. How?

Um, and so I think that was a really smart thing to do. And I think that's helped us because we've all been able to do what we want to do. And I think I think

it's safe to say we all >> get why each other likes and cares about the things we all care about and we all respect it. You guys have done this for

respect it. You guys have done this for a long time. It's not as easy as it looks. Tell me a lesson, something

looks. Tell me a lesson, something you've learned along the way that people on the outside would be surprised to hear.

>> Well, things sometimes don't work out the way you think they will. Sometimes

that's a good thing.

>> I was going to say that can be a good thing >> or can even better than you.

>> Yeah, >> we call we call those successful failures.

>> Sometimes I mean you learn enough.

learn, you learn from it and sometimes you just learn that it didn't work and you couldn't have done anything else.

But sometimes you learn it didn't work and here's why so you change it, right?

>> You know, so I I >> we did a complete annual report about our failures one time, maybe 10 years ago or something. You should have seen what it took to get information from our

partners. I want every bit of bad news

partners. I want every bit of bad news if there's bad news and and it makes the it makes the nonprofit nervous >> and the evaluators think, "Oh, if I tell them it's bad, I might not get hired

again." And you know, you have to get

again." And you know, you have to get super clear with people about >> uh you know, it's okay.

>> It's okay. We want to hear everything.

And also to what Susiey's saying, the performance aspect of all of it. It can

just be >> uh something to navigate and figure out where all the distortion is because people are telling you things they think you want to hear or you'll say something and they'll just be listening for that

word that they need to use to get the thing. And it's

thing. And it's >> and I would even say in in Omaha with you know my staff has said to me many times

it's so refreshing to be in a place where we can screw up we can make a mistake.

>> I mean one thing you have to do I think to develop leadership within your own organization is to give people enough space and enough responsibility to make mistakes

and then how you react to that is super important. Yes.

important. Yes.

>> Um >> not you're fired.

>> Yeah. Yeah. So I mean you know that but that if you're going to build a competent staff and people who can learn the kind of judgment you want them to have um

>> and you're sort of charged with taking risk. So there's you're bound to Yeah.

risk. So there's you're bound to Yeah.

But at the end of the day, you know, and and they've probably done this, too.

But, you know, we I have been in places where I've made a $50 million decision right there after a two-hour meeting.

And, you know, it's like, we want to do this. We're going to spend the money.

this. We're going to spend the money.

And people are like, >> "Okay, let us know when you make the No, I'm making the decision. We made it.

It's going to happen." Now, you have to follow our rules in terms of, you know, how we give the money and all that, but usually that gets done. So, you know, I >> that's the other thing that's unique, I think, >> it's a huge luxury.

>> Yeah. Because most foundations, the staff isn't allowed to, you know, make any decisions or or even say, "We're interested in this. We might want to do this."

this." >> And then they have to have a board meeting, >> right?

>> And then the trustees have to look at it and they vote on it and decide if it's going to happen. It's and it just it it drags everything out. slows the process >> and the performance, >> right? It just changes the whole way

>> right? It just changes the whole way everything works. People are always

everything works. People are always amazed that we just do it just like how I said it's like, >> "Yeah, we can do it.

>> It's fun actually."

>> Yeah, it's fun.

>> Hearing you all describe that. It It

just occurs to me that it sounds an awful lot like the philosophy that your father and I guess your mother used with you.

>> Yeah. There's way more of that at work than I think people >> And it's also the philosophy I think he uses at Bergkshire. Yeah. I mean, he makes decisions like that.

>> What I just heard from you three, >> I I cannot believe how much you all are so much like your father and how you do this. Like, it's really so much like

this. Like, it's really so much like your father and how you take these operations. It's the same way he does.

operations. It's the same way he does.

>> We taught him a lot.

>> I was listening to it. Never it never occurred to me until I was sitting there listening. I was like, "Wow."

listening. I was like, "Wow."

>> Yeah. And then you throw our mother in there and you've got a pretty potent.

>> Well, if I always say if it weren't for my mom, I'd be in jail. So, you know, good people.

>> If it weren't for my mother, my dad would be in jail.

>> Yeah. So,

>> if it weren't for my mother, I wouldn't be here.

>> I didn't realize until sitting down with them how similar they are in terms of how they think about things. all

different areas of interest and expertise, but how similarly they view things in relation to how you view things. I was actually very surprised um

things. I was actually very surprised um >> well that surprises me a little too that they uh well they would disagree with me on a lot of minor points but they don't disagree with me on major

points and they don't they didn't disagree with their mother. I mean they they were raised in a household that

behaved generally inconsistent with what their parents live. They

didn't they didn't have to watch hypocrisy. There's a lot of things that

hypocrisy. There's a lot of things that they were affected by favorably that they didn't see. Uh, now they had all kinds of gripes with and and uh, you

know, I was I was tougher with them than I should have been probably looking back, but I just kind of couldn't imagine how well they would all all three of them would turn out. And of

course, I didn't imagine that they would be the ones that would disposing the money. I thought Susie Senior would be

money. I thought Susie Senior would be doing it.

>> I I guess some of the things that struck me as being so similar to you is how um, your children view running their organizations. They are all running

organizations. They are all running large charitable organizations that give away a lot of money with very small staffs. Staffs the size of

staffs. Staffs the size of >> but a lot of personal involvement >> and a lot of personal involvement.

They're on the ground making every one of those decisions.

>> Um they don't like bureaucracy I think anymore than you do.

>> No. No. That's one thing that >> they've seen it now. They hadn't seen it when they were 20 or 30. You know, I mean, you should be wiser in the second

half of your life. I should be my kid should be there's nothing that that really is important with money that they can't they can't do. And on the other end, they can't sit around doing

nothing. And that goes back to the line

nothing. And that goes back to the line that I think that I think King Graham may have said this to me, but she'd from but you know he if you're super rich you should leave your kids

enough so they can do anything but not enough so they can do nothing.

>> I get credit for that line. It was not original with me but I don't know who said it first.

>> Still ahead.

>> There's nothing magic. You just have to think a little and use a little discipline.

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>> You know, Warren, over time, you became so much more than the CEO of Berkshire. Um, I can think back to times like after the financial

crisis when you would come on our air and and basically try and calm people down. They were worried about what the

down. They were worried about what the stock market was doing. They were

worried about what was happening to their money. They were worried about

their money. They were worried about what was going to happen to their jobs.

>> They weren't just worried. They were

scared.

>> They were scared stiff.

>> That happens periodically in civilizations. And

civilizations. And >> it doesn't happen to me in terms of of uh making business decisions. I mean I mean where else when you can buy

something good cheaper you get upset about it.

>> But I I wonder when it occurred to you that you could be the voice of authority that could come on the air and calm people down. a fireside chat sort of to

people down. a fireside chat sort of to I mean that's that's much more than just >> I always like I always like to talk and and I like I always like to talk to older people. I can't find older people

older people. I can't find older people anymore but that's another separate problem. But I used to, you know, when

problem. But I used to, you know, when I'd go over to choir practice or something at the Dundy Presbyterian Church, I'd have a kind of a little route of women who were washing dishes

or doing things that they had to do in those days. And I would just make stops

those days. And I would just make stops and and uh and I would do most of the talking.

And then for one reason or another, something happened. I was I still was

something happened. I was I still was the same way privately, but I got so I was terrified of public speaking and uh

so I took a course when I was I actually took the course when I was 21. I guess I I actually signed up for

21. I guess I I actually signed up for the course when I was Columbia, the Dale Carnegie course and I'd written them a check and I stopped payment on it and I just I was terrified of speaking in

public. I couldn't breathe when I

public. I couldn't breathe when I said everything was fine, but I just couldn't breathe. And uh I don't know

couldn't breathe. And uh I don't know what caused that. I obviously had I've got a theory, but I uh obviously I had some something that happened that I got

must have gotten embarrassed in front of talk in front of the people because I could still talk to people individually and couldn't stop talking to them practically. Uh, but that happened and

practically. Uh, but that happened and then I I knew that if I didn't start talking in front of people, I knew I would revert back to where I was. I

didn't want that to happen. So, I went out to the University of Omaha, which is now University of Nebraska in Omaha. And

they had night classes and different things. And I just said, I' I'd like to

things. And I just said, I' I'd like to teach here. And I said, well, you don't

teach here. And I said, well, you don't have a PhD. And I said, well, I barely have a master but but I'd still like to teach.

And fortunately, I didn't know it at the time, but the three judges of whether I would be allowed to to uh uh do this

with Dean Thompson, who was I was going to marry his daughter a little later, and he really liked me. And Dean

Helmsteader, and his daughter was the first girl I kissed and and and Dean Lucas. He liked me, too. And I I liked

Lucas. He liked me, too. And I I liked his daughter too, but that was not so so I think I I probably got a

unanimous vote there. And and then I I kept teaching every year essentially for 67 or 68 years, something like that.

And I I I did it every I mean, I did it with college students. I did it with uh groups of women that Kraton University got together. I did it at the Scarsdale

got together. I did it at the Scarsdale Adult School. that it, you know, I just

Adult School. that it, you know, I just couldn't stop talking.

>> And you felt the need to teach because >> I I loved it.

>> And it, you know, it appealed to my dadic uh uh style and and uh I liked my own ideas.

I just had fun teaching and I still do except I ran out of gas a few years ago.

>> Is that you think what made Warren Buffett? I mean, becoming Warren

Warren Buffett? I mean, becoming Warren Buffett, you are more than just the CEO of Berkshire. You are

of Berkshire. You are >> I've been a teacher.

>> You've been a teacher in a national idea. And I I when you talk about

idea. And I I when you talk about teaching, that's what you've done with the shareholders for years and and probably why you have 40 50,000 of them show up for these annual meetings.

>> Yeah. And in 2008 n everybody was terrified and it was a scary time understand you know but but actually George Bush got it. I mean, he went out

there on the on the lawn and basically said, "I don't know what the hell is happening, but it ain't good." You know, and he said it more colorfully than that even. And

even. And >> so he turned it over to guys that that were very able, Tim Gner, and and but probably Hank Bolson more than anybody else. And

else. And >> and he gave him a lot of authority.

He was restricted in how much authority he could give because he had a Congress that really had the power of the person.

And luckily that well and Hanky had somebody that just he needed to ignore the rules. He he you know he found

the rules. He he you know he found something to hang it on, you know, but but but he did what was necessary. He's

kind of like Paul Walker was at the Federal Reserve. Same exact type except

Federal Reserve. Same exact type except Hank made a lot of money and Paul Walker never made any money.

>> But the the thing that has always struck me is anytime there's a crisis, you're getting calls from the government.

You're getting calls from the players who are in big trouble when the financial system's in trouble. You're

going on and trying to calm down investors and and make them realize that I won't say anything I don't believe.

>> You always do speak very honestly and I think that's why people >> That's why people listen. You sure

>> and why they listen.

>> Yeah.

>> This is a mantle that's developed over the last 60 years. Did was there a point where you realized that this was a mantle you were carrying? Well, it

became evident after quite a while though that because I started investing well I was started out as a stock broker then I went to work for Graham and then

I came back to Omaha. Uh but then I actually I have seven members basically of the family that said we want you to we want to know what to do with our money. It wasn't that much. It was

money. It wasn't that much. It was

105,000 uh hours and in total. And uh they said I said, "Well, I'll do it on these terms." And I wrote out something. It

was a limited partnership agreement. And

and then it sort of in we never have a single a single institution. I mean,

it's just the I it's just a different game than than that. These were people, you know, like my dentist and the dental assistant that was there, you know, put

in $5,000 and and uh and then I got out of it in 1970. But but the people stayed with me, a lot of them in terms of Birkshire and so it

life life takes funny turns. You don't

know what they're going to be. So, if

somebody, your dental, your dentist and your dental assistant put $5,000 with you when it was just your your partnership and they stayed with you through it, what would that be worth today?

>> A lot.

A whole lot. And some of them, you know, they added to it. take the Davis family that introduced me to Charlie, you know, I mean, they I told them I would

wouldn't tell them what I owned and uh they could get out twice a year or once a year and and not

to ask me what how things were going and and I because I didn't want to I didn't want to be under pressure to try and do something I couldn't do.

>> So, I I ran I'd like my own money.

Warren, I I think people come to you because you've seen so much. You've

experienced so much, and you're so willing to share what you've learned along the way. If you go to the annual meeting, people might ask you about what

happened at the BNSF last quarter. They

might ask you about GEICO insurance.

They might ask you about your thoughts on US Treasuries, or they might ask you what's the most important lesson to to to life. I mean, you you get a pretty

to life. I mean, you you get a pretty wide variety. Those philosophical

wide variety. Those philosophical questions come at you pretty fast.

>> Yeah. Well, if they ask me that last one, I'll need help. So,

but uh no, in the end, it's just you you're talking to you're talking to one person that asks the question. I mean,

in the end, and every now and then, somebody wants to sandbag you in some way, but over time you'll learn how to handle that bas, you know, basically.

But those people aren't coming to sandbag me or that.

>> So they they came because they wanted to hear your advice and Charlie's advice.

>> Yeah. They come and ask about, you know, who do I marry, >> right?

>> Yeah. And and uh say, "Well, Charlie's the expert on that." But Charlie uh uh I mean, those are important questions. And

Charlie answered, you know, you marry the best person that'll have you. I

mean, it was a very practical answer.

So, what what do you tell these people who come to you looking for advice on these things? What's the the

these things? What's the the toughest question you've ever got and what's maybe the best answer you've ever given?

>> That's a good that itself maybe the best the toughest question. No, I mean I I I have the ability to some extent

because of where I am in life that people will listen to me and they'll hear the same damn thing they would hear from somebody else, but they they'll just pay more attention to

it. You know, they know I don't have an

it. You know, they know I don't have an axe to grind. I'm not selling them time by the hour. I'm not doing anything. I'm

and and and I I've got this dactic streak. So I I I will if I like them I

streak. So I I I will if I like them I will I will talk to them. You know it it uh and and I like to talk to big groups.

That's why did the college students I would I just love the idea of we had 200 schools you know that that wanted to come every year and and they would ask

me great qu and they'd all have a good time and I'd have a good time. But one

of the things I would tell them, I it's kind of simple advice, but I would say, you know, let's just take the class you're in back at whatever school it may

be, and maybe there's 300 students in it, you know, and you could get 10% of the earnings for the lifetime of five of them. Which would you pick and

why? And you won't pick the one with the

why? And you won't pick the one with the highest IQ. you won't pick the, you

highest IQ. you won't pick the, you know, the best athlete and won't pick the best looking, you know, all kinds of things. And and and just examine that.

things. And and and just examine that.

And then I would tell them, you know, now let's say you got to sell short.

This is more fun.

And and five of them, who do you sell short, you know, and then and then of course I explained at the end, you can be the person that you would buy, you know. I mean, there is nothing

know. I mean, there is nothing impossible because it isn't whether you can, you know, throw a football 60 yards and it isn't, you know, There's all kinds. It isn't the one with the highest

kinds. It isn't the one with the highest IQ. You can be one of the five and why

IQ. You can be one of the five and why not? So, you want to be on that list and

not? So, you want to be on that list and I I just have fun. But

>> giving advice. It's kind of obnoxious, but it's >> You've got a long line of people waiting to ask you questions like that. But if

there was one word, maybe two words on on what it is that creates success, what is it? If it's not IQ, if it's not your

is it? If it's not IQ, if it's not your athletic abilities, if it's not u how much homework you've done, what is it?

>> Well, it depends how you define success.

But if you define it as you know, many people it's it's how much they earn, you know, in life that determines an awful lot of things that happen with

their family and everything and and you know, it's luck a lot of it. And if you choose the right parents, you're rich when you come out. I mean, you have won

the the lottery. the ovarian lottery.

And and if if you're born rich, your father's established a trust fund for you already. You're creating a dynasty, you don't have to do one thing

in this life, and you can live better than all kinds of people who work their tail off. And I don't like that, you

tail off. And I don't like that, you know, myself. But uh uh but that is a

know, myself. But uh uh but that is a reality. Uh so the easiest way to come

reality. Uh so the easiest way to come become rich is to pick the right right wound to come from. But uh an awful lot is luck.

>> But when you're telling students who come to see you, hey, you can be that student that you would like to bet long on by doing what?

>> Well, you can do it by being a good person, by reading a lot, by by spending less than you take in. I

just tell them, you know, you can spend 110% of what you earn once, then you used it up. I mean, in the rest of your life, you're underwater. And why in the

hell you want to be underwater and why do you want to borrow money on credit cards? And we own credit card companies.

cards? And we own credit card companies.

I mean, that, you know, people people love spending beyond their income, a lot of people, and just forget it. And uh

nothing wrong with a mortgage on a house that when you're, you know, at some point But even that be careful and you know the people that aren't worried

about money on balance are quite a bit happier people are worried about money and there's nothing magic it you just have to think a little and

use a little discipline and and of course who's inclined to use a lot of discipline when they're teenagers or in college I mean you know

I I uh I understand that But I'm just I will tell you that don't get in debt.

And uh you know I used to I used to tell students was back many years ago when when I I could make 150 bucks a month delivering papers in the morning. Well,

what it take an extra hour and a half just get up an hour and a half earlier have 150 bucks. Charlie Charlie used to sell himself the best hour of the day.

He was charging $20 an hour for his legal advice and he just decided that his best hour was from 6:00 to 7 in the morning. So, he was just going to sell

morning. So, he was just going to sell himself that hour. And uh that's not crazy. And and you know, your future is

crazy. And and you know, your future is your future and you can't expect anybody else to do it. And and beyond a certain point, if you get in a hole or anything,

it's it is difficult to dig out. It

isn't that it's impossible. I give

credit to people who do it, but do it the easy way.

>> One of the things about you is that you have stayed so much the same over the years. You're

still living in the house that you bought 60 years ago.

>> Yeah.

>> Yeah. 60

>> 65 >> 67 years.

>> Okay. 67 years ago.

>> Yeah. Yeah. 30% of the life of the country or something.

>> Why haven't you changed? Why haven't

you?

>> I wouldn't be happier any place else.

And Susie was going to be happier in Omaha. And and that likely meant that

Omaha. And and that likely meant that our kids were going to be happier in Omaha.

>> What are you proudest about with your kids?

>> Oh, I just the fact that they took it after their mother.

No, they really they uh it it was a good thing. Probably a good thing that well we weren't rich early.

They never saw us behave like we were extremely rich or anything. Although

they saw us fly off to New York and do different things. We have plenty of fun.

different things. We have plenty of fun.

They saw me very intense about about investment management and obviously proud of the results and all kinds of things like that. But they didn't see us

craving money just to say to show other people that I've got money and you don't you know type of stuff and and uh and they didn't see any

dynasty building whereas they saw it some places some other places in in Al.

They had a good feeling of about what life was about.

But they still a lot of crazy things but of course I did too.

No, you you you're going to do crazy things when you're one thing you should it's a difficult thing because you should be very forgiving of yourself but

not totally forgiving of yourself. But

but there's no sense looking back and saying you know if I had done this if I had done that everything it's just forget it in life you know nobody nobody

cares I mean it is history you can't change it you could change your behavior going forward but uh and your second half of your life should be better than your first half the problem is you don't

know what it's a half of what but uh you should be wiser when you get get older and I think my kids have have all become quite a bit wiser and I think they were

always intelligent.

They all showed the same kind of things that that uh that kids show. I mean my dad was always very forgiving of my

misbehavior. He just say I know you can

misbehavior. He just say I know you can do better. And uh

do better. And uh that's pretty that was very powerful stuff. I mean that uh because I could do

stuff. I mean that uh because I could do better. I mean I knew it. He knew it.

better. I mean I knew it. He knew it.

And and uh and I was behaving like a jerk for a long time. And uh it's nice to have somebody have faith in you. If

you want to have good children, be a good good parent. I mean, you just care about them, you know. But you don't expect you don't give them lectures about doing bad things when you're when

you're doing the bad things and they're actually just acting like teenagers.

You're still you feel good.

>> I feel terrific. Yeah, but I know it won't last forever, but then I know it never would last forever. And 94 I I won a game I didn't deserve to win.

Well, that's fine. I accept that. You

know, this is our kind of world, folks.

But you know the one quality that I measure people by enormously because everybody can everybody can do

it and that's whether people are kind. I

mean that is something that really doesn't cost you anything you know it it is an act that uh doesn't

belong to any religion doesn't belong to anything and uh why in the world uh wouldn't you be kind? I mean and and

some people are and some people aren't but but uh you feel better if you're kind. I think too

kind. I think too Johnny Johnny Yelli one time. I only met him one time. Johnny Anali of you know the Fiat group and he was really he was

quite a guy and I met him one time and he said you know when you get old he says you got the reputation you deserve.

He says you you can get away a long time with the other and he was reflecting you know but it's true. I mean, if you look at those

it's true. I mean, if you look at those people I named, you know, whether Tom Murphy or Sandy got wer, they have the reputation

they deserved in the end.

But of course, if somebody dies at 40 or 30 or you know, I mean, it's a different situation, but if you live a long time,

you've got it. And and uh kindness is it just doesn't cost anything. You haven't given up anything.

anything. You haven't given up anything.

It's just so easy and you get it back >> with interest.

>> Warren, we've covered a lot of ground.

Is there anything that you feel like we've missed out on? Anything?

>> Oh, I would I would I would just ask anybody to challenge me on whether being kind could hurt them in any way and whether than the happiness of the world.

Wouldn't be better if they just if every if every morning they said to themselves, you know, I have things that are good and bad that happened to me today, but I can't be kind to anybody.