WarrenGood morning. I'm Warren Buffett, the chairman of Berkshire Hathaway, as you probably have gathered by now. I had a real problem last night. I was losing my voice almost entirely. I think I'll do all right, but we've always got Charlie here to... He's always done the talking. I just move my lips, you know.
WarrenIt doesn't make any difference to us, whether the volatility of the stock market, you know, is that average as a half a percent a day or a quarter percent of a day or five percent a day. In fact, we'd make a lot more money if volatility was higher because it could create more mistakes in the market.
WarrenBen Graham used the example of Mr. Market, which is the, and we've used it, I've copied it in the report. I copy it 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, or buy 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.
WarrenWhat do you do to keep you from making the same mistake twice? The best thing to do is learn from other guy's mistakes. I mean, you know, it's like Patton used to say, you know, it's an honor to die for your country. Make sure the other guy gets the honor. So our approach is really to try and learn vicariously, but there's a lot of mistakes that I've repeated. I can tell you that.
WarrenThe biggest one, probably the biggest category over time, is being reluctant to pay up a little for a little for a business I knew was really outstanding or to continue to buy it at higher prices when I knew it was outstanding.
WarrenWhen you get into consumer products, you're really interested in finding out, they're thinking about what is in the mind of how many people throughout the world about a product now and what it's likely to be in their mind, five or 10 or 20 years from now. Now, everybody has something in their mind about Coca-Cola. And overwhelmingly, it's favorable. It's associated with pleasant experiences. Now, part of that is by design. I mean, it is where you are happy. It is at Disneyland, a Disney world, and it's... It's at ballparks, and it's every place that you're likely to have a smile on your face, including the Berkshire Hathaway meeting, I might add.
[2:47]
WarrenAnd that position in the mind is pretty firmly established, and it's established in close to 200 countries around the world with people. It's share of mind. It's not share of market. It's share of mind that counts. You know, they say in this world you can't get something for nothing, but the truth is money managers in aggregate have gotten something for nothing. I mean, they've gotten a lot for nothing. And people, investors have paid, and the corollary is, investors have paid something for nothing. When are you going to write your book? You know, at one time or another, I've said everything I know, and a good bit more. So I've never felt compelled to do. I really feel that the annual reports are sort of a book on the installment system. Life is a whole series of opportunity costs. You know, you've got to marry the best person who is convenient to find. have you. You know, is much the same sort of a process.