What is your next goal in life now that you’re the richest man in the country?
WARREN BUFFETT: That’s easy. It’s to be the oldest man in the country.
(Laughter and applause)
We have a big advantage in that, as contrasted to virtually almost every other
company, we, now and in the future, are willing — eager — to buy parts of wonderful businesses
or all of them.
I mean, most managements have a — most investors are limited to buying parts of businesses.
And most managers, psychologically, are geared to owning all of something that they can run
themselves.
We — you know, it’s like, I think Woody Allen said some years ago, the advantage of
being bisexual is it doubles your chances of a date on Saturday night.
(Laughter)
We can go either direction, in that respect.
(Laughter)
If somebody tells us the business is going to change a lot, in Wall Street, they love
to tell you that, you know, that’s great opportunity.
They don’t think it’s a great opportunity when Wall Street itself is going to change
a lot, incidentally.
(Laughter)
But they — you know, it’s a great opportunity. We don’t think it’s an opportunity at all.
I mean, we — it scares the hell out of us. Because we don’t know how things
are going to change.
We are looking, you know — when people are chewing chewing gum, we have a pretty good
idea how they chewed it 20 years ago and how they’ll chew it 20 years from now. And we
don’t really see a lot of technology going into the art of the chew, you know?
(Laughter)
Ben Graham used the example of “Mr. Market,” which is the — and we’ve used it. I’ve
copied it in the report. I copy from all the good writers.
And Ben said, “You know, just imagine that when you buy a stock, that you — in effect,
you’ve bought into a business where you have this obliging partner who comes around
every day and offers you a price at which you’ll either buy or sell. And the price
is identical.”
And no one ever gets that in a private business, where daily you get a buy-sell offer by a
party. But in the stock market you get it. That’s a huge advantage. And it’s a bigger
advantage if this partner of yours is a heavy-drinking manic depressive.
It takes the interests of parents and, frankly, it takes the interests of the well-to-do in
the school system to keep a first-class school system.
I’ve said that, to some extent, a public — a good public school system is a lot like
virginity. It can be preserved but not restored.
We are looking for people that have a passion that extends beyond their paycheck every week
or every month for their business.
Beyond this passion,
we’re looking for intelligence. We’re looking for energy. And we’re looking for
integrity.
If they don’t have the last, the first two will kill you.
Because if you hire somebody without integrity, you really want them to be dumb and lazy,
don’t you? I mean,
Being put on the comp committee of American corporations, as I’ve said, they’re not
— they’re looking for Chihuahuas, and not Great Danes and Dobermans and —
CHARLIE MUNGER: Yeah.
WARREN BUFFETT: And I hope I’m not insulting any of my friends that are on comp
committees. (Laughs)
CHARLIE MUNGER: You’re insulting the dogs.
(Laughter and applause)
You’ve just got to fill up your mind with various competing thoughts and sort them out
as to what really makes sense over time.
And then once you’ve done a lot of that, I think you have to jump in the water, because
investing on paper and doing — you know, and investing with real money, you know, is
like the difference between reading a romance novel and doing something else.
(Laughter)
I always tell the kids that come visit me, I tell them, “Go to work for an organization
you admire or an individual you admire.”
That means many of them become self-employed, but they — (Laughter)
It’s been, you know, a death trap for investors ever since Orville [Wright]
took off.
I mean, as I’ve said, if there had been a capitalist at Kitty Hawk he should have
shot down Orville and done us all a favor.
I sit here as somebody who, for the — in the last 30 years, one-quarter of all the
calories I’ve consumed come from Coca-Cola.
(Laughter)
And that is not an exaggeration. I am one-quarter Coca-Cola. I’m not sure which quarter.
I think there’s a lot to be said about being happy with what you’re doing.
If I’d been eating broccoli and Brussels sprouts, and all that, all my life,
I don’t think I’d live as long. You know, I —
(Laughter)
Every meal, I would approach, thinking, you know, it’s like going to jail or something.
(Laughter)
Charlie is always the one that gets the girl, and he has one explanation for that. But
I think mine is more accurate.
As you know, every mother in this country tells her daughter at an early age,
if you’re choosing between two very old and very rich guys, pick the one that’s older.
(Laughter)
I have avoided, all my life, the compensation consultants. To me it’s a —
I hardly can find the words to express my contempt.
(Laughter)
WARREN BUFFETT: I will say this. If the board hires a compensation consultant after I go,
I will come back.
(Laughter)
You know, at one time or another I said everything I know and a good bit more. So I’ve never
felt compelled to do it. I really feel that the annual reports are sort of a book on the
installment system.
Plus I think very few people write two books, and I have this kind of unwarranted optimism,
I guess, that the best is always yet to come and there are a lot more interesting things
that are going to happen, and I would hate to preclude commenting on those. So I think
it’s going to be a few years. But I may get around to it at some point.
But I think maybe it’d be a bad sign if it happened, because it might be that I really
thought that what I was writing about was more important than what was going to happen
next.
Charlie, are you going to write a book?
CHARLIE MUNGER: No, but your comment about why you are unable to write a book reminds me
of the Middle Western fellow who left an unfinished manuscript. And he apologized for
not finishing his book, which was entitled Famous Middle Western Sons Of Bitches.
And he said he was always meeting a new one — (laughter) — and therefore he could
never finish the book.
(Laughter and applause)
WARREN BUFFETT: As a courtesy, Charlie and I are leaving each other out of the book that
we write. (Laughter)
I noticed you were from Morganton, North Carolina. We had a business there, Carolina Shoe.
We made work boots. And I gave a talk at University of North Carolina some time ago. In fact,
I think they have a tape of it still.
And afterwards — I had mentioned in the talk that we had this business in Morganton.
And one of students came up to me afterwards. And there were a number of them, and I shook
his hand and, making idle conversation, I said, “Where are you from?” And he said,
“I’m from Morganton.”
And I said, “Oh,” I said, “Do you know Carolina Shoe?”
And he thought a second, he said, “I don’t know her, but I think I know her family.”
(Laughter)
Never forgotten that fellow.
I want to thank my daughter Suze, who does millions of things for me.
She does draw the line, occasionally.
A few years ago —
we have a
dinner at [Omaha steakhouse] Gorat’s
the day after the meeting.
And we were in having — the whole family was there — having dinner. The place was
packed and there was a big line that had formed outside.
Be sure not to go to Gorat’s unless you have a reservation tomorrow, because they’re
sold out.
The big line had formed
and it started raining cats and dogs.
And the waitress came to me. We were eating.
Waitress said, “I got to tell you,” she said.
“It’s raining like crazy outside and there’s a long line
and [Walt Disney CEO] Michael Eisner is standing
out there getting soaked.”
So I turn to Suze — and Michael and Jane [Eisner] are friends of my mine, good friends
— and I said to Suze, “Why don’t you go out there and help them out
before they get drenched.”
And she looked at me and said, “I waited in line at Disneyland.”
(Laughter)
I feel terrific. And — I always feel terrific, incidentally. That’s not news.
(Applause)
— this is a really minor event, and Charlie will tell you how minor it is.
CHARLIE MUNGER: Well, as a matter of fact, I rather resent all this attention and sympathy
Warren is getting.
(Laughter)
I probably have more prostate cancer than he does.
(Laughter)
WARREN BUFFETT: He’s bragging.
CHARLIE MUNGER: I don’t know because I don’t let them test for it.
(Laughter and applause)
WARREN BUFFETT: He’s not kidding.
(Laughs)
CHARLIE MUNGER: At any rate, I want the sympathy.
(Laughter)
I probably shouldn’t tell you this. When Charlie was having a little trouble there
on those last two words — I get a little worried about Charlie,
don’t know whether I should talk about this, but —
(Laughter)
I thought maybe he was losing his hearing and I didn’t want to confront him with it.
I mean, we’ve been pals for a long time, so I went to the doctor and I said, “Doc,
I’ve got this wonderful partner, but I think maybe his hearing is going on him.
“And I want to talk to him about it. I mean, how do you say that to somebody you’ve known
that long? And what should I do?” He says, “Well,
you stand across the room, talk to him in normal course of —
tone of voice, and let me know what happens.”
So the next time I was with Charlie, I stood across the room and I said, “Charlie,
I think we ought to buy General Motors at 35, do you agree?”
Not a flicker.
I go halfway across the room. I say, “Charlie,
I think we ought to buy General Motors at 35, do you agree?”
Nothing.
Get right next to him, in his ear, “Charlie,
I think we ought to buy General Motors at 35, do you agree?”
He said, “For the third time, yes.”
(Laughter and applause)
So speak up, speak up. (Laughs)