OtherThe meeting will now come to order.
WarrenI'm Warren Buffett, Chairman of the Board of Directors of this company. On my left here is the ever-animated Charlie Munger, our vice chairman. When we look back on this era, you will see this as a period of enormous amounts of wealth transfer. But in the end, the only wealth creation comes about through what the business creates. There's no magic to it. If a company that's not worth anything sells for $20 billion, at 5% of it changes hand, somebody takes it. a billion dollars from somebody else. But investors is a whole gain nothing. It's the same principle as a chain letter. I mean, if you're very early on a chain letter, you can make money. There's no money created by chain letters. In fact, there's the frictional cost of envelopes and postage and that sort of thing. So the net, there's some money destroyed a little bit. And there's money destroyed by the frictional costs of trading and investing, that that comes out of investors' pockets. If you mix the mathematics of the chain letter or the Ponzi's scheme with some legitimate development, like the development of the internet, you are mixing something which is wretched and irrational and has bad consequences with something that has very good consequences. But you know, if you mix raisins with turds, they're still turds. In terms of these tech stocks, you say that you don't understand them, I can't imagine you're not understanding something. Oh, wait, we understand the product. We understand what it does for people. We just don't know the economics of it 10 years from now. I would say that on balance, for society, the Internet is a wonderful thing, and for capitalists, it's probably a net negative. So all of you can be happy that the progress of the species will affect your economic futures for the worst. No one, no compensation committee in America will be listening to a consultant. who walks in and says, I think your management should have an arrangement that ends up in them being in the lower half. And if no one wants to be in the lower half, believe me, the median is going to move up. I mean, there is no way around that. I mean, these people meet yearly more often. And they sit there with a proxy statement of every other company in their business, and they say, well, gee, we need a management at least as good as this and how are we going to attract people and all this other stuff. And it can only go, it'll only
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Questionerratchet upward. I don't think it's money so much. Sometimes I just think it's ego. They just can't stand to see some guy that they think is batting 280 and they're batting 300 and he's getting paid more money. And, you know, and that process is endless. And I'd like to hear a little bit more on your philosophies now that Berkshire Hetherway is more and more buying companies on this, how you make sure that it's true love and how you pick people.
WarrenI'll tell an owner this. I will say to them, you've built this business lovingly for 50 years and maybe your parents before you, maybe even your grandparents. And I tell them, you know, if they want to put it in our museum, you know, we will make sure, A, it doesn't get resold, that it gets the proper respect, and that you can keep painting it. We like to think that we're the metropolitan museum of businesses and that we can get really outstanding creations to reside in our museum. our culture is very old-fashioned. In other words, I think it's Ben Franklin and Andrew Carnegie and it's very old-fashioned. And what I think is amazing about Berkshire is how well these very old-fashioned ideas still work. We don't get imitated much. I mean, we're imitating, you know, the behavior of a period that has been gone for a long time, but I don't seem a lot of the businesses we buy are kind of cranky like us and old-fashioned and I hope we continue it that way they're sitting out there charlie no i was very lucky early very early in life that i had certain heroes and i've continued to develop a few more as i've gone along so i think if you can influence the model the role models of a of a of a five-year-old or an eight-year-old or a ten-year-old you know it's going to have a huge impact and uh it's a model is all you want and you're really better off not limiting yourself to the living some of the very best models are have been dead for a long time if uh alan greenspan just decided to retire and that job was offered to either of you uh would you take it well i can tell you my answer is no in a hurry i would say no more quickly you notice we gave you very unequivocal answers and of course that that alone would just qualify us from the job at the fed uh the truth is we're having too much fun i mean it this is this we've got the best job in the world we get to work with people we like and admire and trust every day of the year we get to do what we want to do the way we want to do it and uh we should pay and this is true of some other CEOs too but we should pay to have this job