WarrenGood morning and we're delighted to have you all here. Charlie and I have been partners of one sort or another since 1959. You have to learn to calibrate Charlie's answers. When I ask him whether he liked something, if he says no, that means we put all our money in it. I mean, that is a huge... If he says that's the dumbest idea I've ever heard, that's a more moderate investment that we make. How do you get a few excellent investment ideas? to be successful? Fortunately, the investment business is a business where knowledge accumulates. I mean, everything you learn when you're 20 or 30, you may tweak some as you go along, but it all kind of builds into a knowledge base that's useful forever. The game is a lot like that fellow that plays chess blindfolded. He's got a memory of the board. the board and everything that happened before. And that enables him to do the next move in a way he never could if you just showed him the board midgame cold.
QuestionerBack in the 1950s and 1960s, when you had a partnership, Mr. Buffett, you asked for and got a performance fee of 25% of what was earned above 6% a year. What caused you to switch from that performance fee to that no fees we are enjoying today.
WarrenIf I can work with people I like and get the same result they have and end up with all kinds of money, you know, why do I need to make some further override on them? If you're highly conscientious in your relations with other people and you hate to disappoint, you're going to suffer more if you are liberally rewarded with performance fees. So I think there was an enormous advantage to us.
QuestionerSo I guess we should be thanking you. If I were to take you back to the start of your investing careers, I assume it would have been harder for potential acquisition opportunities to come by. How did you ensure then that you had good enough deal flows coming to you to be able to choose from?
WarrenIt feeds on itself. We bought our first furniture operation in 1983. that really led to four other transactions because the people in the first one were happy and they talked to us about the second one and the people in the second one were happy and so on. So, you know, it's like a, Charlie always describes compound interest as being like, you know, being at the top of a very, of a very large hill with wet snow and starting with a snowball and getting it rolling down a hill. And that's a little bit like the acquisition situation works.
QuestionerHow do you define success? How do you define success? and happiness.
WarrenWhen you get to be my age, you will be successful if the people that you would hope to have love you, do love you. Unfortunately, it's something you can't buy. I mean, Charlie and I've talked a lot of times if we could just buy a million dollars worth of love. You know, I mean, it would be so much more satisfactory than to try and be lovable. But it doesn't work that way, you know. The only way to be loved is to be lovable. Thank you.