QuestionerI was wondering if there is anything subjective in yours and Mr. Munger's assessment of whether or not you like someone and how it is that you determine whether or not you like the Lord of the Castle.
WarrenWell, we spoke about agency costs, and there are two different kinds of agency costs. One, the guy favors himself at the expense of the shareholders, and the other is he does foolish things. where he's not trying to favor himself. He just is foolish by nature. Either way, it's very costly to you as the shareholder. So you have to judge those two aspects of human character, and they're terribly important. And on the other hand, there are some good businesses so good that they'll easily stand a lot of folly in the managerial suite. Much as we like perfect people, I don't think we've always invested with them. But generally, we like people who are candid. We can usually tell when somebody's dancing around something or when the reports are essentially a little dishonest or biased or something. It's just a lot easier to operate with people that are candid. And we like people that are smart, you know, that then I don't mean geniuses, but that and we like people who are focused on the business. It's not real complicated, but we generally, you know, there may be a whole bunch of people in the middle that we don't really have any feeling on one way or the other, and then we see some that we know we don't want to be associated with and some that we know we very much enjoy being associated with. Averaged out, we've been very fortunate. Very lucky.