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WarrenMorning. Good morning. I'm Warren Buffett, Chairman of Berkshire, and this is my partner, this hyperactive fellow over here, is Charlie Munger.
QuestionerThere seem to be great values in the technology sector that meet most of your criteria, philosophy and investing. Would you ever consider investing in companies in this sector in the future?
WarrenI don't know where Microsoft or Intel. I don't know what that world will look like in 10 years, and I don't want to play in a game where I think the other guys have got an advantage over me. This is not like Olympic diving. And Olympic diving, you know, they have a degree of difficulty factor. And if you can do some very difficult dive, the payoff is greater if you do it well than if you do some very simple dive. That's not true in investments. You get paid just as well for the most simple dive as long as you execute it all right. And there's no reason to try those three and a halves when you get paid just as well for just diving off the side of the pool and going in cleanly.
QuestionerIn your opinion, what effect will the year 2000 completely? client issue have on the U.S. stock market and the global economy.
WarrenI don't think it's going to affect Berkshire in any material way, and I certainly have a feeling that the world will get past it very easily, but it is turning, it is expensive for some companies and it's going to be very expensive for governments. Charlie?
CharlieYeah, I find it interesting that it is such a problem. You know, it was predictable that the year 2000 would come. Yeah.
QuestionerWhat criteria do you use to sell? stock. I kind of understand how you buy it, but I'm not sure how you sell.
WarrenYeah. Well, the best thing to do is buy a stock that you don't ever want to sell. I mean, that's what we're trying to do. And that's true when we buy an entire business. I mean, we've bought all of GEICO or we bought all of Seas Candy or the Buffalo News. We're not buying those to resell. I mean, what we're trying to do is buy a business that we will be happy with if we own it the rest of our lives and we expect to with those.
QuestionerI'd like your advice on how to understand annual reports, what you look for, what's important, what's not important.
WarrenThen we see from that report whether the management is telling us about the things that we would want to know about if we owned 100% of the company. What you seldom see in an annual report is a sentence like this. This is a very serious problem, and we haven't quite figured out yet how to handle it.
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WarrenBut believe me, that is an accurate statement much of the time. In the past, you've often said that the insurance operation is the most important business in Berkshire's portfolio. Is that true? And what are numbers two and three?
WarrenInsurance, as far as the eye can see, will be by far the most significant business at Berkshire. It will be accident, to some extent, over the next 10 years, what ends up being the second or third or fourth largest. That'll be determined by opportunity. We have no predetermined. course of action whatsoever at Berkshire. We have no strategic planning department. We don't have any strategic plan. We react to what we think are opportunities. And if it's a business we can understand, and if it's particularly if it's big, you know, we would love to make it number number two. I also want to say proudly that we have no mission statement.
QuestionerEverybody in this room's got to be wondering the same question. Who in your opinion? both of you is the next Warren Buffett. Charlie, who's the next Charlie Munger? Well, let's try that first. That's a more difficult question. There's not much demand.
QuestionerMr. Buffett, from your perspective, as an investor, what keeps you awake at night?
WarrenI would say that I would, and I think I speak for Charlie, all of them do it, but we really don't worry. You know, if you're worried about something, things can do is get it corrected and get back to sleep. And I can't think of anything I'm worried about at Berkshire.
CharlieWarren likes the game. I like the game. And even in the periods that look tough to other people, it's a lot of fun. It's a lot of fun. It's a lot of fun. It's a lot of fun.