WarrenMorning. I'm Warren Buffett, the chairman of Berkshire Hathaway, and on my left is Charlie Munger, the vice chairman of my partner. And we'll try to get him to say a few words at some point in the proceedings.
QuestionerNow that you've become this media darling, how can you assure us that you're still keeping your eyes concentrated on the proverbial ball?
CharlieI've been watching Warren for a long time, and people who are concerned that he will change have a huge appetite for needless worry.
WarrenThe odds that I will change are about as good as the odds that Charlie will change.
QuestionerI'd like to know if you have a plan, a succession plan, to be executed in the event, God forbid, something happens to one or both of you, which would remove your input to the strategic decisions.
WarrenI think few business operations have ever been constructed to require so little continuing intelligence. in corporate headquarters. An idiot who was willing just to sit here would have a very good record long after the present incumbents were dead. We have a big advantage in that it's 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 management's have a, most investors are 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, it's the advantage of being bisexual is that you doubles your chances of a date on Saturday night.
QuestionerYears ago, you said you loved the newspaper business, and then over time I said it declined a bit in how much you loved it, and I'm kind of wondering how you feel about it now, and if you can prognosticate a little bit for us at all.
WarrenThe economics are still exceptionally good compared to virtually any business in the world. They aren't quite as good as they were 15 years ago. I think it's obvious. The newspaper proprietors are getting a touch of paranoia for the first time. I mean, they worry about the electronic revolution. They worry about the fact the young people, you know, don't read. It's not as much fun going to newspaper conventions as that you to be. They're still making exceptional money. I mean, that's the interesting thing.
QuestionerAh, but they, I've heard you say a dozen times people don't seem to care what floor they're at
[2:48]
Warrenjust whether the elevator is going up or down. That is true. People feel better when they're on the second floor of an elevator that just come from one than they do, when they're on the 99th floor coming down from 100. There's no question about that.
QuestionerWhat are the fundamental rules of economics you used to make money for Berkshire?
WarrenWhat we're trying to do is we're trying to find a business with a business with a, wide and long-lasting moat around it, and protecting a terrific economic castle with an honest Lord in charge of the castle. We are trying to figure out what is keeping, why is that castle still standing and what's going to keep it standing or cause it not to be standing five, 10, 20 years from now. What are the key factors and how permanent are they? How much do they depend on the genius of the Lord in the castle, and then if we feel good about the moat, then we try to figure out whether, you know, the Lord is going to try and take it off for himself, or whether he's likely to do something stupid with the proceeds, etc.
QuestionerWhat is the absolutely first question you ask yourself when you look at a potential investment?
WarrenNow the first question is, can I understand it? And then the second question is, you know, does it look like it has good economics? Has it earned high returns on capital? Yeah, we tend to judge by the past record. By and large, if the thing has a lousy past record and a bright future, we're going to miss the opportunity.
QuestionerCould you consider availing a videotape of this meeting to us to shareholders?
WarrenThe thing we're worried about in connection with that is discouraging attendance. I mean, we'd hate to have two people here asking questions and then send it out to tens of thousands. So, in the end, when I make sales go down at the jewelry store.
QuestionerYeah. Yeah. Is that a yes or a new?
WarrenIt's, it was a no. It's a no.