WarrenI'm Warren Buffett, Chairman of the Board of Directors of the company, and I welcome you to this 2001 annual meeting of shareholders.
QuestionerSince a lot of the Internet companies have gone out in a business, has your view of Internet changed?
WarrenI think that the Internet probably looks to most retailers like less of a competitive threat than it did a couple of years ago. The Internet's an opportunity, but I think the idea that you could take almost any business idea, and turn it into wealth on the Internet. Many were turned into wealth by promoting them to the public, but very few have been turned into wealth by actually producing cash results over time.
QuestionerI think it's way more important what you've thought about for two years than what you've practiced for 10 years. So if there's a divergence in techniques applied, I would rather be with the one that I philosophically in sync with.
WarrenThe biggest thing is that, you know, basically they've got their head screwed on right in the first place in terms of how they value businesses and how they look at stocks.
QuestionerWhat's the most recent business mistake that you've made, Mr. Munger?
CharlieThe mistakes that have been most extreme in Berkshire's history are mistakes of omission. They don't show up in our figures. They show up in opportunity costs. In other words, we have opportunities, we almost do it. In retrospect, we can tell that we were very much mistaken not to do it. Very few managements do much thinking or talking about opportunity costs.
QuestionerBut Warren, we have blown...
CharlieBillions and billions and billions.
WarrenI might as well say it.
QuestionerRight.
QuestionerYou've stated the importance of an occasional big idea. How were you able to in fact tell when you had a big idea?
WarrenYou know, the game in our kind of life is being able to recognize a good idea when you rarely get it or rarely is presented to you. And I think that's something you have to prepare for over a long period. What is the old saying? The opportunity comes to the prepared mind. And I don't think you can teach people in two minutes how to have a prepared mind. But that's the game. Things we learned 40 years ago, though, will help and recognize the next big idea.
QuestionerEvery time I hear what you like to eat, Warren, it makes me wonder what your cholesterol level is. Or if you even worry about it.
WarrenI would say that if you ask my doctor, he would want me to make a few changes, but he would also say that my life expectancy is probably a lot better than the average person of 70.
[3:27]
WarrenYou know, I have no stress whatsoever, zero. I mean, I get to do what I love to do every day, and I'm surrounded by people that are terrific. So that problem in life just doesn't exist for me. If you were an underwriter for a life company, you would make me considerably better than average. than average. You'd break Charlie better than average, too. In school, they don't teach you how to make and save money, not in high school or college. How would you propose to educate kids in this area? You know, I get a chance to talk to students from time to time, and you know, one of the things I tell them is, you know, what a valuable asset they have themselves. I mean, you know, I would pay any bright student probably $50,000 for 10% of his future earnings the rest of his life. So he's a $500,000 asset just standing there. And what you do with that $500,000 asset in terms of developing your mind and your talents is hugely important. The best investment you can make at an early age is in yourself.
CharlieWell, I'd like to interject a word of caution. You sound like somebody who's likely to succeed at what you're trying to do, and that's not always a good idea. If all you succeed in doing in your life is to get early rich from passive holding of little bits of paper, and you get better at better at only that for all your life, it's a failed life. Life is more than being shrewd at passive wealth accumulation.