"We get mad when other people do dumb things with our money" · Transcript

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 incidentally, 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. In fact, I think the odds are that both deals were dumb. The pizza deal was particularly dumb, but in my view. But just think of all the dumb things we've done, right? Starting with that department store in Baltimore. Oh, yeah. We expect to do some dumb things. It's just we get mad when other people do dumb things with our money. The, you know, the pizza business, somewhere I probably have some figures on that, but when they sold the pizza business for $3.7 billion, they announced it as selling it for $3.7 billion. They didn't sell it for $3.7 billion. That's what the other guy paid. What they got was about $2.5 billion. And that was a terribly tax-in effect. Deal when they'd already shown their ability to understand that you could do a tax-efficient deal when they sold the post-serials business earlier. And when they referenced, well, they didn't reference at all what pizza was earning beforehand, but I think that Nestle said it was earning something like $280 million pre-tax. But that was referring to the previous year. When they talked about the Cadbury earnings they were buying, they were talking about next year. And when they talked about the pizza earnings they were selling, they talked about last year. pizza in 2009, believe it or not, earned $300, I think, $40 million pre-tax. So they got $2.5 billion per $340 million of pizza earnings that were growing as fast or faster than the Cadbury earnings and where the sales were growing as fast or fast. It really didn't make sense in my view. Now, you know, Irene is a perfectly capable manager, and she may know a lot of things about that business, I don't know. Like I say, we've made plenty of mistakes ourselves.