QuestionerWarren, first of all, thank you for taking the time to talk with us today. I'm delighted. I thought maybe we could take a little time just to go back with the history of the annual meeting, because this is something that now has 40,000 people who are coming here to Omaha, but it started out as what?
WarrenWell, at the very first we held the annual meeting in New Bedford Mass. The company was a Massachusetts corporation, I believe, and so the first, after 1965, I'm not sure exactly how many, but roughly five or six meetings probably were held in New Bedford, and nobody came, except the required officers. And then when we came to Alma, we started having the meeting in the lunchroom at National Indemnity. And I would say for seven or eight years, or maybe ten, there'd be about a dozen people counting my uncle friend and Aunt Katie and a few people that would come in. There would be about maybe three people from out of town. I'd answer questions. And then in 1982 or thereabouts, whenever we merged with Blue Chip, we had a somewhat larger meeting. Microphones didn't work. Radio stations kind of kept cutting. But from that point forward, it just started growing.
QuestionerWhat kind of questions did you get at the first meetings that were here at the National Indemnity in the lunchroom here?
WarrenWell, the only questions we, there'd be two or three people from out of town they might ask. from out of time they might ask a couple questions. But it was very short, although I would stay as long as people wanted to answer their questions. But there were just a couple of people there that would ask questions. My relatives never asked any questions.
QuestionerWhen did that really start to change? After Blue Chip, it was bigger, but how many people are we talking?
WarrenWell, I think that that blue chip meeting, the first one that we had here, when the microphones went bad, I think we probably had a hundred people or something like that. And we were getting a whole new group of shareholders, for one thing, through the merger. And then we started meeting at the Jocelyn, then we met at the Harfium, then we met at a big motel chain. We went at Exharbin, we went to the Civic Center. We just kept enlarging the venues as time went along. And now, I think we flattened out. Now that we webcast the meeting, then I think we'll probably stay fairly constant.
QuestionerThe questions that you seem to get at the shareholder meetings over the last decade or two
[2:31]
Questionerare different than questions that you hear just about any other publicly traded shareholder company, or shareholder meeting. Why do you think that is?
WarrenWell, I think there is more of a family atmosphere to Berkshire than virtually any large corporation. People feel a connection, because we feel a connection to them. I mean, Charlie and I started managing money for other people. other people and they originally were just family and maybe a few friends. And so we've we've got a partnership feeling toward the people who have given us their money. And 70% of the shares of Berkshire were distributed from the partnership in 1969. And these are, you know, they're my doctors, my neighbors, and same zip code. I do very well trick-or-treating, you know, that they know me. So they come and and we don't scream them and they can ask them. And they can ask whatever is on their mind. And sometimes they get kind of, they may get a few that are kind of silly. But the question is what's on their mind? And Charlie and I are there to talk with them. And we had so many getting kind of into personal questions that we've taken on this situation. With the last, I don't know, six or eight or ten years, we've had a combination of media analysts to work in some maybe more substantive questions than some of the shareholders would want to ask. But we still want to hear from that. Now, there's a limit to how much you can do. But we're happy to spend six hours or so out there answering what's on their mind.
QuestionerAre any questions that have ever surprised you? Or when did you first start getting some of these life lesson questions?
WarrenYeah, the life ones, they probably started certainly in the 1980s. I mean, when we were at the Jocelyn, we were getting them at the Arfum Theater. And Jocelyn only maybe held 800 people and Arfume a couple thousand. So we were getting them. You know, a lot of the people were from them. Momoa that came too. And they, we never said anything was off limits. We wouldn't tell them what we were buying or selling, but they could talk about anything else. And it makes it more interesting. It's far more interesting than if you're just reading a bunch of numbers from the 10K or something of the sort.
QuestionerDo you remember the first question that came up that was, that had nothing to do with business?
WarrenOh, we've had, you know, question, you know, you know, do you follow this religion, getting into religion or getting into all kinds of things?
[4:57]
WarrenAnd we had one young fellow that was 11 or 12. And he asked a question, he happened to be the grandson of a fellow from New York that had been with me in the partnership. And he asked a question one year, and I reported in the annual report that 11-year-old Nicholas asked me this question. The next year he stood up and he said, he said, you know, when I asked that question I was actually 10 and he said, if you can't even get that straight, why should I believe any of the other numbers? So we have fun at the meeting. We had a proposal with the meeting. and it's it's designed to talk about what they want to talk about. And every now they get one, it's kind of silly. But overwhelmingly, I think just the fact we're willing to talk about what they want to talk about is interesting. And I love being up there with Charlie because I never know what he's going to say. I find that the meeting's probably more interesting than any of the shareholders, because I learned things from Charlie every time I talk to.
QuestionerYou know, let's talk a little bit about, in the past, you're obviously an incredible investor, but when I've asked you in the past what you'd like to be remembered for, you've said you want to be remembered as a teacher. Yeah. Why is that?
WarrenWell, I've gotten so much from other teachers and I just, and yeah, I enjoy it too. I mean, I have a good time talking with groups, usually students, but sometimes other groups too. And, and they appreciate it. I just had a group Friday from 11 universities. You had Stanford, UCLA, we had Iowa, we had the K-State, and we had P. And we had Peking University that came from China. And it is fun just talking to bright young people who have yet to live their lives. And they're much more interested in the personal stuff usually than investments. I mean, they're all going to do well financially, but some of them will make a lot of mistakes and other things. And maybe I can be of help. It's just, it's rewarding to you. And as long as they want to do it. on a comp, I'm willing to stand up there and talk to them.
QuestionerHow did the teaching of the students, how did the schools list get started?
WarrenI'm not exactly sure. I mean, some years ago, many years ago, when I would go to directors' meetings at Coca-Cola in Atlanta or Gillette in Boston, I would schedule a talk. I mean, they'd asked me, but it'd be Harvard or Babson or Northeastern or whatever it might be,
[7:22]
Warrenor it'd be Emory in Atlanta or Georgia Tech or whatever it might. And so they just asked. and I'd make a point of going a little bit earlier, saying a little late, and talking to them. And then that got to be a lot of work. And it became easier to have them come here. So I now take them in, now I take them in groups of 10 schools, 20 students per group, at least a third of them have to be women, and then they can ask anything they want. Why do a third of them have to be women? Because they weren't, they were, the guys were crowding out the women before. And one way or another, they seem to control the apparatus within their business school or whatever. And I was just all of them, you know, if you don't bring a third woman, you don't get invited back again.
QuestionerWhat type of questions do the students ask?
WarrenThey ask everything. They ask, you know, whether it's marriage or, you know, whether it's something, you know, a lot of the questions are investment-oriented, but a lot of them are just how they should leave their lives. And they listen. You know, I mean, if I talk to some trade association, a bunch of 60-year-olds, they basically want, they want to be entertained and they want tips, but they're not going to change anything, you know, in their lives. But these young people do, and I hear from them afterwards. I hear from a lot of them afterwards.
QuestionerWhat do they say?
WarrenWell, they usually start out by saying thanks, but then they get specific sometimes, and other times it's very short, but sometimes it's quite long. Sometimes they ask for a job. I mean, when you started doing this in your business, when you started investing, you were doing it out of your home.
QuestionerExactly, six years.
WarrenKind of toiling away. Nobody, no employees. And I made the mistake of starting additional partnerships rather than putting everybody in one. So I Googled at the place where I had 11 different partnerships. So every time I bought a block of stock, I had to break it into 11 tickets. I had to write 11 checks because I wrote the checks myself.
QuestionerThis is when you took physical delivery of securities.
WarrenI'd go down to the Allman National Bank and actually receive the securities, put them in safe deposit boxes. I picked up the mail every morning. I went down to the 38th Street and picked up the mail. I mean, it was, I wrote away for the annual reports myself, had a little IBM typewriter. And so it was a very peculiar, it was this little room off my bedroom.
[9:47]
WarrenSo I just go down occasionally to get, what in those days, I'd have to admit was a Pepsi, but and potato chips and go back up to work. your neighbors, it looked like you weren't doing much of anything. That's true. I had this one neighbor, Don Keough, went on to be president of Coca-Cola company. And his oldest daughter used to come over because we had a jungle gym in the backyard. So we'd play on the swings as he went off to sell coffee. And when it came time to ask him about joining my partnership, he said, if you think I'm going to give $5,000, the guy who spends all day riding on slides with Kathy, he says, you're out of your mind.
QuestionerSo how do you go from being the... the guy who works up in the attic and kind of squirrels around the house all day to the guy who can't walk down the street without people recognizing you, recognizing your voice, and asking for tips on how to live live live life.
WarrenIt's not that much different. I mean, it could be maybe a pain under some circumstances, but it really isn't. I mean, people in Omaha, the cleaning lady calls me Warren. I mean, my relationship. to them really hasn't changed very much. I do get recognized more out of town than I used to. My friend Carol Loom was used to say I should be a private investigator because I'm so forgetable. I can be following somebody for 10 years. They never noticed. But maybe it's the white air or something, but now there's more of that. But it's fine, you know. It hasn't really changed my life that much.
QuestionerWas there a point, though, where you realized, okay, this is different. Because I've seen you walk down the street in New York City and had people who are turning around trying to take selfies of you as you walking down the street.
WarrenYeah. Thanks to be on television. I'm recognizing more and probably the older you get, the more kind of distinctive you look from other people. But it's helped my life more than it's hurt my life. I mean, I think people, well, who knows what their lives may be, but it hasn't hurt my life. But it hasn't hurt mine at all. I think about it, though.
QuestionerYou're somebody who never felt very comfortable speaking publicly. In fact.
WarrenI was terrified. When I was young, I couldn't do it. I mean, I took the Dale Carnegie, of course, and handed the guy after once signing up and stopping payment on the check of $100. The second time with Wally Keenan in Omaha, I gave him $100 in cash.
[12:21]
WarrenAnd instantly, we became good friends. He joined the partnership and did it very well. But it forced me. It forced me and 30 others in the class to get up and didn't necessarily make fools of ourselves, but somehow avoid getting tangled up, you know, just in all the metal blocks that come with me in public speaking. And I went right out after I'd finished that and went to university, what was then, the University of Omaha. And I just said I want to teach because I got to get up in front of people. And that first class that you were teaching was what? It was investments. I had these students, a good many of them came from Strategic Air Command. They were in programs. So they were twice my age and they were majors or maybe colonels even. And at the end of one of my first ones, this 40-year-old major came up and he said, after two hours I think I'm dazzling of everything and he comes up, what was that all about? I said, well, I said, that was the Socratic method. I said, that's the way I teach. And the guy looked at me and he said, well, pal, he says, I got to tell you something. I mean, Socrates. You have a lot more people who are willing to listen to you these days, though. Well, that is true. But, yeah, the first, well, wasn't the very first class, but I would have my aunt Alice in there. And I had a good many people who later joined my partnership, but that was five or six years. Well, it's more than that even later. But these were al-Mahans. They were friends. Some were young, some were old. Why do you think that people are so... are so eager to get advice from you and Charlie? Well, we've been around a long time, so we're known, and we do have a decent record over time. And we're giving the same advice. I mean, we're giving the advice I got from, in terms of life from my dad, in terms of investments from Ben Graham, I mean, we're passing on what we learned from somebody else. And it does work. And what we're saying makes sense. Doesn't mean there aren't other ways of doing things. but it will work what we're talking about. And they know we like them. I mean, Charlie and I like to talk. And we enjoy interaction. And we like getting challenged on ideas as well. You went to school at Columbia University for the business program. That's right. You went to work for Big Graham, and we're working in New York City at that time. Well, there was a gap of three years because he wouldn't hire me.
[14:57]
Warrenwouldn't hire me when I volunteered. And so I came out to Omaha. I was still, I was only 20 years old then, so I started selling stocks. And although I was 20, I looked about 16 and I behaved like I was about 12. I was not a huge success in selling securities. And then, actually I took the Dale Carnegie course about that time to make it easier. But I used to, I mean, there was some guy I was going to call on and I'd get over to this Taylor Shop or whatever it might be. And I'd walk around the block about it. four times delaying before I went in.
QuestionerYou did go to work for Ben Graham in New York City. And then you came back. Why'd you leave New York when everybody thinks Wall Street is where you should be if you're going to be in business like that? Why Omaha?
WarrenI just felt it would be a better life. I had two children at that point. And my wife never said a word against moving there, but her life was more on Omaha, two of her parents were here, my parents were here. My aunts and uncles were here. her best friends from high school where it was a better place to live. And it was a better place in my view to raise a family. And I had a lot of friends in Wall Street. I made, I mean, it was a good thing I worked there. But I did not want to keep going. I lived in White Plains, and I took the train in. And there wasn't much life outside what would happen between those train trips on each side. It's just been a better life.
QuestionerDo you think it's been easier to insulate your yourself from some of the more questionable business practices?
WarrenYeah. Yeah. When I was in New York, there was no way that I wasn't, I was sitting at this little office 42nd on Lexington Avenue, Graham Newman, and I was getting a certain number of the calls, not that many calls, but from brokers. And I mean, they were all throwing out ideas and hoping to get business from the little firm I worked for. So there was an overstimulation. There was a tendency to want to do too many things. If I do 10 or 15 good things in investments in my life, I'm going to do very, very well. I mean, you do not need hundreds and hundreds of ideas, and most ideas aren't any good. But it's a business where emotions play a big part with most people. And emotions do not help you make good decisions and investing. So almost been a much better place for me.
QuestionerI mean, I wonder if that's part of the reason that people are attracted to to your advice because it is a step removed from the latest craze or the latest fad or chasing down things.
[17:37]
WarrenYeah, and I'm not selling them anything either. And so it's unbiased advice from somebody who's been around a long time. It's worked in my case for me and worked for Charlie and I tried to talk their language, you know, basically. It's my own language, though. It's not an effort. an effort, but I think that helps. I think people can tell when you're saying what you believe versus talking points. I always infuriates me when every time I'm, you know, and somebody thinks I might talk about politics or this or that, they want to give you talking points. I mean, you know, I need to feel like going on there with the talking points, just reading them and saying, who said it to me. It's kind of irritating. But anyway, I enjoy it. In that vein, you write your own annual shareholder. letter every year. I write the letter. It's edited by a good friend of mine, Carol Loomis, but the letter is mine. It's been 53 years.
QuestionerThe very first letter that you wrote, how did that go? Did it go straight to the shareholders?
WarrenNo, the very first. I felt the necessity then Berkshire Hathaway controlled, was controlled by Buffett Partnership. We had control of the company, control of the board, but they had a couple thousand shareholders and they had reported in a certain form over the years. the years. And I did not take, we controlled it, but I did not take official positions where they didn't draw a salary from Berks or anything. I did write the report, but I initially I kind of wrote it in the same mode as previously had been reported. And then their custom was to send it to send it to the company lawyer at Ropes and Gray. I felt like a very sergeant, a wonderful fellow. And he sent it back with a whole lot of thoughts about what I should or shouldn't say. So from that point on, I never said it to the lawyers again. The unvarnished truth. I just, I'm not saying anything in there that I don't believe it's true. And so I do it in my own way, although it shifted to my own way gradually over time. I mean, particularly after I dissolved a partnership in 1970, then I took a position as chairman of the board. And I got more serious about writing the report. And then I was on an SEC committee in 1970. in 177 on disclosure. And I think I really decided to step up the writing as if I was writing to my sisters. Because I actually participated in a little book that the SEC wrote about plain writing.
[20:10]
WarrenAnd it is a technique I use. I write dear Bertie and Doris and on then I later change it to dear shareholders. But it helps to have somebody in mind that you're talking to. And my sisters are both very bright. They've got probably all their money in Berkshire, so they're interested, but they're not following day-to-day what's going on. And so I try to use a vocabulary and talk in a manner that I would talk if I was sitting talking to them. That style has attracted a huge following. And I know you hear from a lot of people, too. What kind of mail, letters, cards, phone calls do you get at the office?
QuestionerYeah, I don't get that many phone calls. But I get quite a few letters. And I've gotten way more letters. the years have gone by. But that's partly because books have been written or because I'm on CNBC or something of the sort. And a lot of them are just, they're just very nice letters. I mean, they come frequently handwritten and they're not emails, but sometimes they are. But they're just letters. And I'm glad people feel they can write me. Now, some of them just want an autograph or a picture or something like that. But we don't count those. But some just say that, you know, they appreciate getting advice. And a lot of, actually, a fair number say they were doing it wrong before. And those are the nice ones to get. Do you respond to those letters? Do you read them?
WarrenI read them. Yeah, I definitely read them. And I sometimes respond fairly often on a letter itself. It's just, I don't want to take up my assistance time, dictating letter and everything. She's got more than enough to do. So frequently I'll scribble a line or two on it and send it back. Sometimes I send them a little note paper and I send it. And other times I don't. I mean, it just depends on how much is going on to some extent.
QuestionerDo you think there's a danger of becoming mythologized? Of any of this being twisted or being out of your control?
WarrenWell, there certainly is in the sense that people sometimes use my name on Internet stuff to promote things. And I mean, I can, and you really can't stop much of that. much of that. So you get people trying to commercialize and frequently outside the United States where they're really just using it to try and entice people to something that they're going to get a bad result. And so I don't like that. And it's very hard to police that sort of thing. And you certainly don't want people to get their expectations up about getting returns that are somewhere with the huge amounts of money we've managed now compared to what we could do 50 years ago.
[22:54]
QuestionerMy returns have gone down every decade of my life since the 1950s. I did my best in the in the 50s. I did second best in that. It's just taken down the line. And it's from working with more money and it's probably from having more competition. Yeah. Was there a point where you ever looked back and thought, wow, this was a moment that I realized it's no longer just about me and this small group of my family and friends and partners. Was there a moment that ever struck?
WarrenI think it just sort of crept along as crowds at the meeting increased. And the request for the annual reports, we get a lot of requests for the reports. And, you know, it's been sort of writing a book on the installment system with a lot of repetition. But it's, now, it's been sort of gradual. I mean, if some book came out, well, there was the first book, Robert Hanks, not necessarily, the first book, first book, but the one that hit big was the one by following Robert Hekstrom, who I really didn't know, but he sold a lot of copies back around 1993 or thereabouts. And then it's become a little small industry. People, they can always sell 10 or 15,000 copies. You know, they write nothing, repeat something that's been said earlier. But I would say a few books of stimulated things. I'd say a few TV things have stimulated things. things that sort of came out of.
QuestionerWarren, thank you so much for your time.
WarrenOkay. Appreciate it.