WarrenGood morning. I'm really delighted we can have this many people come out for a meeting. It says something I think about the way you regard yourself as owners. Incidentally, if you hadn't figured it out already, this hyperkinetic bundle of energy here on my left is Charlie Munger or Vice Chairman. Obviously, the Internet is going to have an important impact on retailing. It will have a huge impact on some forms of retailing. change them and maybe revolutionize them. I think there are some other areas where the impact will be less. But any time we buy into a business, any time we've bought in for some time, we have tried to think of what that business is going to look like in 5 or 10 or 15 years. And we recognize that the Internet in many forms of retailing is likely to pose such a threat that we simply wouldn't want to get into the business.
QuestionerI know you like to buy into success stories, but you don't like to buy high tech. And it seems to me, say, in the case of Microsoft, that 10 years from now, they'll be doing software development, just like 10 years from now, Coke will be selling sugared water. And what I'm wondering is why you feel that way when it seems certain companies, high-tech companies, are predictable.
WarrenIf I had to bet on anybody, I'd certainly bet on Microsoft, bet heavily if I had to bet, but I don't have to bet. And I don't see that world as clearly as I see the soft drink world. I know I don't have that kind of knowledge. And I simply think, and I do think that it's, that you have a general knowledge of business over decades that you would regard the industry there in as less predictable than the soft drink industry. Now, it may also be that even though it's less predictable, that there's a whole lot more money to be made, so that if you're right, that the payoff is much larger. But we are perfectly willing to trade away a big payoff for a certain payoff. We were up in, we started in Alaska, and we were going down these canyons in a boat, and the captain saying, now, you know, let's go over there and look at the sea lines, and I'd say, let's stay right where we are, where we've got a satellite channel, because I was trying to talk on the phone all the time. But Charlie was in Hawaii, and we never did get a chance to talk during that whole period. I didn't want to bother him with a little thing like a bid for a hundred billion plus of securities
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Warrenand couldn't find him. So it was, we were in an awkward place to pursue that. I think it's possible that if I'd been in New York or Charlie had been in New York during that period, that our bid might have been accepted.
QuestionerMr. Buffett, will you groom a younger man or woman as your heir apparent?
WarrenWe have today the people to take over Berkshire. There's no problem about that at all. They have been named in letters that the directors have, and they are in place. Our death or incapacity, the timing of it will determine exactly who will. be the current person in that letter. But we have those people in place. They don't need to be groomed from this point forward. They exist. They're ready. They'd be ready to run Berkshire tomorrow morning.
WarrenI don't think you can get to be a really good investor over a broad range without doing a massive amount of reading. I don't think there's any one book that will do it for you. You might think about picking out five or ten companies where you feel quite familiar with their products, maybe, but not. necessarily so familiar with their financials and all of that. Just sort of immerse yourself as if you were either going to work for the company or they'd hired you as the CEO or you're going to buy the whole business. And you say, why did this happen? Who let it happen? You know, what's that chart going to look like the next 10 years? When he talks about why, that's the most important question of all, and it doesn't apply just to investment. It applies to the whole human experience. You want to get smart. The question, you've got to keep asking is why, why, why, why?
WarrenThe moat in the management are part of the valuation process in that they enter into our thinking as to the degree of certainty that we attribute to the stream of income, stream of cash actually, that we expect in the future, and the amount of it. If you have a big enough moat, you don't need as, you don't need as much management. You know, it gets back to Peter Lynch's remark that he likes to buy a business that's so good that an idiot can run it because sooner or later one will
Charliewell that's i mean he was saying the same thing i mean he was saying that what he really likes is a business with a terrific moat where nothing can happen to the moat and there aren't very many businesses like that important thing even in your work i mean is to an extreme extent it seems to me is who you do it with i mean it uh you can have if you're going to spend eight hours a day working the most important thing isn't how much money you make it's it's how you feel during those eight hours and terms of the people you're interacting with and how interesting what you're doing is and all of that
Warrenwell you know i consider myself incredibly lucky in that respect i can't think of anything i'd rather do and i can't think of any group of people i'd rather do it with and if you asked me to trade away a very significant percentage of my net worth either for some extra years online or being able to do during those years what i want to do you know i'd do it in a second