WarrenGood morning. I'm Warren. He's Charlie. He can hear, I can see, we work together for that reason.
QuestionerWarren and Charlie may be smart enough to have guessed that the first question will be about Topeka, which is Goldman Sachs. Clearly, Goldman Sachs has lost reputation because of the SEC's action. Could you tell us your reaction to the lawsuit, your reflections in law? reflections in light of it about Berkshire's large investment in Goldman.
WarrenThere's no question that the allegation alone causes the company to lose reputation and obviously the press of the past few weeks. They hurt a company, hurt morale, a lot of things. But I don't believe that the allegation of something falls away. falls within my category of losing reputation. If something is proven, then you have to look at it.
QuestionerIf you became aware of unethical or illegal activities at a Berkshire Hathaway-owned company, would you directly and personally intervene?
WarrenSure. We have to jump in. I want to hear about problems. You know, I hope somebody else has heard about him first and already got them solved. But if they don't get solved someplace else, I want to hear about them. We have a letter that goes out every roughly two years. It starts off basically and it says, look, we've got all the money we need. We'd like to make more money. We love making money, but we don't have a shred more of reputation than we need, and we won't trade reputation for money.
QuestionerIt's a really interesting situation because Greece, you know, they are a sovereign country in terms of their own budget. budget, but they can't print their own currency. You know, they've got the Euro. And I don't know how this movie ends.
WarrenThat doesn't mean I'm forecasting disaster or anything. I really just don't know how this movie ends. And I try not to go to movies like that if I can.
QuestionerWhat did you think of Kraft, CEO Irene Rosenfeld's 26.3 million dollar compensation packages, package for services, including her leadership and completing the Cadbury acquisition and selling craft. North American frozen pizza business.
WarrenWell, I didn't like either the Cadbury decision or the pizza decision, but we've made our share of dumb deals at Berkshire, you know, and so I've gotten more tolerant of other people. And incident, the fact I think it's a dumb deal doesn't for certain make it a dumb deal, but I think the odds are it was a dumb deal. And you will have an absolute army of lawyers, investment advisors, public relations people,
[3:06]
Charlieall of whom will have a strong economic interest in having you push ahead on deal after deal after deal, regardless of how the shareholders come out. I mean, you know, it's just, it's the way it works. I think it's much more important to have good learning at the elementary level that, frankly, the habit of the, in terms of advanced degrees and graduate schools. There are other great educational institutions in America that that help handle this problem. One of the ones I admire most is McDonald's. I had fun once at a major university when I said, I thought McDonald's succeeded better as an educator than the people in the university did. And what I meant was McDonald's hires a lot of people who are quite marginal at the very start of their working career, and they learned to show up on time for work and observe the discipline.
QuestionerIf I one day want to apply as a manager with one of the Birchshel companies, what qualities are you especially looking for?
CharlieWhen you find somebody outstanding, boy do they jump out. I mean, somebody that is thinking about the place the right way, is working extra hard, whatever it may be. In terms of generally advancing within organizations, I think you'd be surprised that how little competition you really have if you start thinking like you would if you were an owner of the party, place and working like you would if you were in order the place, and pretty soon you may be running something.
QuestionerI am looking for your fundamental or unified theory of management and life.
CharlieIt's pragmatism. We've had enough good sense when something is working very well to keep doing it. So I'd say we're demonstrating what might be called the fundamental algorithm of life. Repeat what works.