WarrenI'm Warren Buffett Chairman of the Board of Directors, and I do welcome you to this meeting. I'm sure you recognize Charlie Munger, the vice chairman of Berkshire Hathaway. You can leave any time, obviously, as I've explained in the past, it's much better for him to leave while Charlie is talking. Over the years, we've had probably half a dozen people one time or another proposed that the creation of an all, Berkshire Investment Company or Unit Trust, in other words, an entity that would hold nothing but Berkshire stock, and then would parcel out its own shares in smaller denomination pieces to the public. Charlie and I were worried that a combination of Berkshire's past record, which cannot be repeated, and high sales commissions, and a low denomination and a lot of publicity, about Berkshire and myself, which, as you've seen this morning, we attempted to discourage. The, that the, a great many people would end up buying these unit trusts holdings without any idea, really, of what they were buying and with unrealistic expectations as to the future. So we came upon the idea of the class B shares, which would create. a supply that would match the demand for, in effect, split shares and that would be offered in a way that did not create special inducements or to create false false inducements to people thinking of buying. Our hope is that the Class B shareholders that we attract are of the same quality as the people in this room, that they have an investment attitude that, where they feel they are buying into part of a business that they expect to stay with it for the indefinite future, maybe the rest of their lives.
QuestionerIn looking ahead, do you see the trends of extensive outsizing, the offsizing, the offshoring, the downsizing, and the greater emphasis on the short-term, quick buck bottom line versus your commitment to the long-term investment of affecting your pool of investment possibilities and your decision processes?
WarrenWell, if you put it in reverse, you would say, name a business that has been ruined because it was over downsized. I cannot think of a single one, but if you ask me to name businesses that were half ruined or ruined by bloat, I mean, I could just rattle off name after name after name. It's gotten fashionable to assume that downsizing is wrong. Well, it may have been wrong to let the business get so fat that eventually had to downsize. I would expect that in five or ten years, it's going to be real tough to sell a paper encyclopedia,
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Questionerbecause at that time, you'd probably be able to buy the computer and the electronic encyclopedia for less than the paper encyclopedia. Have you considered selling your electronic business and just getting out of it?
WarrenIt may well be that it'll be a workable business for us, even though it isn't for anybody else, the jury's still out on that. But we're, we will not sell World Book. That I can just, I'll state that unequivocally, we will not sell electronic world book. We are in the business to stay.
QuestionerAs we move into the 21st century, do you see a need to re-envision capitalist premises towards original notions of democracy, justice, and humanitarian concerns?
WarrenI don't want to tinker with the market system. I don't think I should be telling people what they should want to do with their lives, but I do think that it's incumbent on the people that do very well under that system, to be taxed in a manner that takes reasonable care of anybody that is not well adapted to that system, but that it's a perfectly decent citizen in every other regard.
WarrenWe think we have some ability to find businesses where we don't think change is going to be very important. 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. We don't think it's an opportunity at all. I mean, it scares that. hell out of us because we don't know how it's going to how things are going to change it. We are looking, you know, when people are chewing chewing gum, we have a pretty good idea with how they chew it 20 years ago and how we'll chew it 20 years from now. We don't really see a lot of technology going into the art of the chew.
QuestionerHow would you respond to the question of a stockholder that's really concerned about Berkshire being a one-man show?
WarrenBerkshire is not a one-man show. It's a two-man show in terms of capital allocation. There's no question about that at present, but it's it's run by many managers. that are doing an outstanding job and that don't need any guidance from Charlie or me as they go along. Is Coca-Cola going to suddenly stop selling because some managers dead at Berkshire Hathaway? You know, are the people going to stop using Gillette razor blades?
QuestionerThere would be a disadvantage in that I think would be unreasonable to expect that a successor would be as good at making new investments as Warren has been in the past. That's just too damn bad.