QuestionerMr. Buffett, I was reading recently in Fortune magazine that when you invested $500 million in PetroChina, all you did was read the annual report. How is it that you were able to and did make an investment purely on the back of reading that report?
WarrenYeah. Well, it was in 2002 and 2003, and the report came out in the spring, and I read it. And that's the only thing I ever did. I never contacted any management. I never got a brokerage report. I never asked for anybody's opinion. But what I did do was I came to a conclusion to the company, and it's not hard to understand crude oil production and refining and marketing and the chemical operation they have. I mean, you can do the same thing with Exxon or BP or any of them, and I do that with all I look at them. And I came to conclusion is worth $100 billion, and then I checked the price, and it was selling for $35 billion, roughly. What's the sense of talking to management? I mean, basically, if you talk to the management of almost every company, they'll sell. they think their stock's a wonderful buy and they'll give you all the good stuff and skip over things that it just doesn't make any difference. Now, if I thought the company was worth $40 billion, I'd been selling for $35 billion, you know, then at that point you have to start trying to refine your analysis more, but there's no reason to refine your analysis. I mean, I didn't need to know whether it was worth $97 billion or $103 billion if I was buying it at $35 billion. So, any further refining of analysis would be a waste of time when what I should be doing is buying the stock. So we really like things that you don't have to carry out the three decimal places, you know. If you have to carry it out to three decimal places, it's not a good idea. And, you know, it was something like PetroChina, it's like if somebody walked in the door here and they weighed somewhere between 300 and 350 pounds, I might not know how much they weigh, but I would know they were fat. And that's all I'm looking for is something that's financially fat. And whether Petra trying to weigh $95 billion or $105 billion didn't make much difference if it was selling for $35 billion. If it had been selling for $90, it would have made it ever. So we've made plenty of big investment. I've made plenty of big investment mistakes. I've never made one, in my view, that would have been avoided by conventional due diligence. And we would have spent a lot of money and we would have wasted a lot of time. And in some cases, we would have missed deals simply because we would have. have committed fast enough.