WarrenThat's Charlie, I'm Warren. You can tell us apart because he can hear and I can see. That's why we work together so well. We usually have our specialty.
QuestionerYou have said smartphones are too smart for you. You don't have a computer at your desk and you've only tweeted nine times in the last four years. Despite this, you've recently been investing, looking, and talking more about tech companies. What turned you from the Oracle of Omaha to the Tech Maveno of Omaha?
WarrenWell, I don't think I would, I don't think I've talked that much about tech companies, but the truth is we made a large investment in IBM, I made a large investment in IBM, which has not turned out that well. We haven't lost money, but in terms of the bull market we've been in, it's been a significant laggard. And then, fairly recently, we took a large position in Apple, which I do regard as more a consumer goods company in terms of certain economic characteristics, no guarantees, but I think I'll end up being one for two instead of O for two, but we'll find out.
QuestionerWhat is your current outlook on Amazon, and why hasn't Berkshire bought in?
WarrenWell, because I was too dumb to realize what was going to happen. Even though I admired Jeff. It was not at all obvious. that it was all going to work as well as it did. I don't feel any regret about missing. No. Out on the achievement of the achievements of Amazon. But other things were easier, and I think we screwed up a little.
QuestionerClearly, at Wells Farrell, there was an incentive system built around the idea of cross-selling and number of services per customer and the company in every quarterly, quarterly investor presentation highlighted how many services for customers.
WarrenUndoubtedly, people got paid and graded and promoted based on that number. Well, it turned out that that was incentivizing the wrong kind of behavior. But the biggest mistake was that, and I don't know, obviously, I don't know the facts as to how the information got passed up the line at Wells Fargo. But at some point, um, if there's a major problem, the CEO will get wind of it. And that is, at that moment, that's the key to everything because the CEO has to act.
QuestionerCould you walk us through what convinced you that the airlines were different enough this time around for Berkshire to invest close to $10 billion in the four major airlines? It's a fiercely competitive industry. The question is whether it's a suicidally competitive industry, which it used to be.
[3:01]
WarrenIt has been operating for some time now. at 80% or better of capacity being available seat miles. I think it's fair to say that they will operate at higher degrees of capacity over the next five or 10 years than the historical rates, which caused all of them to go broke. Now, the question is whether even when they're doing it in the 80s, they will do suicidal things in terms of pricing, remains to be seen. seen. We picked up a lot of low-hanging fruit in the old days where it was very, very easy, and we had huge margins of the safety. Now we operate with a less advantageous general climate, and maybe we have small statistical advantages where in the old days it was like shooting fish in a barrel. But that's all right. It's okay if it gets a little harder after you get filthy ridge. Essentially, 3G management. And I've watched them up very close at Kraft Hines as basically they don't, they believe in having a company as productive as possible. The 3G people do it very fast and they're very good at making a business productive with fewer people than operated before. We prefer to buy companies that are already run efficiently. because frankly, we don't enjoy the process at all of getting more productive. I mean, it's not pleasant. But it is what is enabled the country to progress, and nobody has figured out a way to double people's consumption per capita without in some way improving productivity per capita. I have avoided all my life compensation consultants. To me, it's, I hardly can find the words to express my contempt. I would say this. If the board hires the compensation consultant after I go, I will come back.
QuestionerIt's been a dream of mine to come here today. I've been a proud beer shareholder for almost 20 years. I asked my dad for stock for Christmas when I was 15. And I kept thinking at the opportunity to ask you a question today that I should make it one that would change my life. Well, that question is, do you know any eligible bachelors living in the New York City area?
WarrenBut you should be a question. You certainly have the approach to her life that Charlie and I would have.