QuestionerThank you, everybody. It's great to see you. I want to thank Matt and Lisa Rose for hosting us here today and having us all together for this incredible cause. And Warren, I want to thank you for being here today as well.
WarrenI'm delighted to be here. The way that Matt just set this up, he talked about that purchase from nine years ago. Joe pointed out that you did call it a huge bet on the future of the American economy, and that bet paid off in a big way. In fact, this year in the annual report, you wrote about BNSF as, NSF as one of the towering redwoods in the grove that is Berkshire Hathaway. Looking back on nine years, what can you say about what's happened since? Well, it is the tallest redwood in the Berkshire forest. And I couldn't hear back there exactly the way Matt was relating the story, so we didn't coordinate to get our story straight. But it was a seminal time for Berkshire. in either the last days of October, the early days of November of 2009. And Matt and I talked at a small hotel in Fort Worth, and our directors are going to meet there in the fall. It'll be the 10th anniversary. And I've just had so much good luck in Texas, but nothing rivals the BNSF acquisition. One thing you may find interesting. I had to talk with Matt on, I guess it was Monday following the Friday I was out here with him and more or less had the deal and then I called our lawyers and I said, you fellows can bill me for all the hours you want between now and Sunday at noon. And after that you're working for nothing. So we compress that deal into a one-week period or so that otherwise probably would have taken months If I hadn't made that restriction, those of you who have dealt on corporate deals will understand why I stuck that in. I see people taking notes right now. We are also looking at Matt retiring next month. He's going to be stepping down. What are you going to do without him? Well, he has left us a great, great railroad. It is the towering red road at Berkshire. And we're going to take good care of what he's bold for us. I think I described it. I don't know whether it was in the lead in, as being a bet on the country and a hundred-year asset. It's more than a hundred year asset, but I thought that would probably be as long as I would be around. So I didn't want to speak beyond my tenure. But it is so fundamental, you know, it moves more than 15 percent of the ton miles in terms of
[2:56]
Questionerinner city traffic in the United States. It is important not only to Berkshire, it really is important to the country. And it's been treated by Matt like it was important to the country. He realizes that it has a significance that goes well beyond that of virtually any businesses and making sure this country works like the way that we want it to work. Warren, you've been fascinated with the railroads, I think, since you were a kid. Right. Now you look at it as something much more than just a fun toy or something to kind of aspire to. You watch this as something that's a real way of measuring the economy. You talk all the time about the car whale loads, and I just wonder what you're seeing right now. When you look at that statistic, what that tells you about the economy.
WarrenYeah, it's distorted in the last week or two by the floods in the Midwest, and we move a lot of coal. But there are 20 odd categories that the – the railroad industry reports on for all the railroads. And winter is always a little bit of a tricky thing, but I would say that it looks like it's slowing down. I don't mean it's reversed in course or anything, but it does seem from all of the businesses, but especially including railroad statistics because they come so fast. And they cover such a broad spectrum. And it gets distorted by whether people are hurrying up the Pacific trade because they're worried about tariffs and all of that sort of thing. But I would say that it does look like the pace of increase in the economy has slowed down. And I wouldn't call it – I'd call it somewhere close to noticeably, but I wouldn't go beyond that.
QuestionerHave you seen it broadly? Is that when it comes down to commodities? When it comes down to things that retailers are ordering, when it comes down to energy? Or are there a couple of areas where you see more weakness?
WarrenWell, there are these 20-offrey. There are these 20-odd categories that autos and aggregates, you name it, grain. Most, almost all of those categories throughout last year were trending strong. And I would say that just looking at those figures, but also looking at some other figures, a good many other figures I see on a weekly basis worth, it looks like things have slowed down. and you'd always have the weather factor, but that's the way I'd bet looking at what I see today. I don't want to get too long. That doesn't change anything we do. I mean, you know, if there was a flashing red light, if there was a blurring red light, we would keep investing the same way we do.
[5:43]
WarrenI mean, just look at the railroad in terms of what the situation was in the fall of 2009. I mean, it looked like the end of the world. And it turned out that that was the low quarter, was the third quarter. You really want to bet on America. I mean, you listen to that magnificent rendition a few minutes ago, and God has blessed America.
QuestionerYeah. I don't want to get too won't want to get too wonky on this, but the yield curve, when you look at the tenure versus the three-month has inverted. And again, this is a pretty important signal. a pretty important signal. It can signal a recession. It has signaled every recession that we've seen in the last 50 years. And it's only given an incorrect signal once. It's the first time it's inverted since 2007. Do you see a recession on the horizon?
WarrenWell, though, I just hope I see a lot of recessions. I hope I live long enough. I don't know how many recessions I've lived through, but I was born on August 30th, 1930, and the Dow was a little over 250. a little over 250 and it was by the time I got out of college it had there was only one or two days after my birth that had been that high so I I don't know whether I've lived through eight recessions or six recessions or you name it but but that's part of a that's part of a capital capitalistic system and and and we will have them and it won't change anything Berkshire either invests in in the way of mark it may offers more opportunities but in marketable securities or business if we see a good good business and everybody in the world is very sure that that inversion has gone to 100 basis points or something like that we're going to buy it and and we'll buy it enthusiastically
Questionerthe reason I kind of push on this though is you've talked an awful lot in the past about how high yields that you look at act as as gravity on stock prices so if you're seeing really low yields that inversely could mean that stocks should trade a lot higher what do you think at this?
WarrenYeah the lower interest rates are basically the better the options stocks are because stocks are going to produce whatever they are over the next 20 or 30 or 40 years but if you buy a 30-year bond you're going to get that rate or somebody you're transferred to so when the 30-year bond is at 2.8 or something or 2.9 a percent and the Federal Reserve's intent now is to have 2% a year inflation and you pay tax on the 2.8 or 2.9 that you receive so your net is down around so you're essentially
[8:22]
Warrensaying i'm willing to go with a profitless investment for 30 years that's never really got my blood i don't get excited about that and and then when you can buy good businesses that may earn 14 15 percent on tangible equity and they've done it in aggregate for a long long time and you just think of the difference between good businesses and how they'll compound over time you can start with the yields that are higher than the bond gives you and the odds that those with the diversified group that that improves over time it's it's a bond with an sending coupons because that's really all a bond at the stock is it's it's a bond with a whole bunch of coupons that go out to infinity and there you just you have to print the amount on the coupons yourself so you don't know the numbers but the one thing you know is the numbers on on stocks as a whole are going to be way greater than 2.8 percent so the lower the lower bond yield go the more attractive stocks are as a long-term investment and what it says about the next three months or six months or one year i don't know and i really don't care
Questionerall right let's stick with some of your big have we lost all the audience now yeah we're going to change the subject let's talk about some of your big investments um airlines an area that you had sworn off you went back into pretty heavily a few years ago you now own major stakes in american united southwest and and in the most recent filings it showed that you had bought even more shares in delta it pushed you above 10 percent when i just talked to you a couple of months ago you said you generally try not to push above 10 percent what happened
Warrenwell that was an interesting situation delta made an appearance i don't know three weeks ago or some investment conference and they announced they'd i think they announced they'd bought in 26 or 27 million shares and borrowed a billion dollars to do it well i like that in two aspects they'd bought in four percent of their stocks so all of a sudden we owned four percent more of double than we had the day before i like the fact they were willing to borrow a billion to accelerate a stock repurchase program but what i didn't realize was that that purchase had taken us over 10 percent so i was already in in territory that i didn't plan to get so i just decided to buy a whole lot more stock i mean once once i'd been once i'd lost my virginity essentially i i thought why stop at one you know does that mean you like delta better than
[11:03]
Warrenthe other airlines at this point no i i accidentally won above 10 percent and i yeah i did that a lot you know i i made an investment in u.s air back in the late 1980s and uh i i think it was for the 387 million dollars and i had had dinner and he said he needed some money so i wrote the check and i think before the before the check had cleared the money was pretty much gone i mean it was u.s airways went broke a couple of times subsequently and and uh i tried to sell our interest at 50 cents on the dollar and couldn't do it and fortunately it had this period when it actually did well so we actually made money on that airline investment but if you look at the number of airlines that went broke in this country if you look at the number of auto manufacturers that went broke i mean it is the capitalism can can be rough it produces good results overall but but it is survival of the fittest and but the airline industry is a very very competitive business and it'll always be a very competitive business i don't think it's a suicidal business anymore but it was for quite a while
Questionerthree of the airlines that you own a major stake in also were flying the Boeing 737 max and have had to ground those i don't know how closely you've been following along but what do you think about what you have heard to this point
Warrenwell i don't think that you know obviously Boeing has a lot of work to do very promptly and and uh the airline industry has been so safe i mean unbelievable the uh we happen to sell insurance also and the rates went down so far just because the industry is so safe and obviously that there's a problem with this 737 max and then the the Boeing you can bet they're staying up 24 hours a day to get it worked out and that won't change the industry or anything over time but uh airline airline tribal is and you know it's it's it's it's it's it's it's almost impossible to believe how much that's improved in terms of safety over the last well during my lifetime
Questionerlet's uh stick on the themes we've already talked about planes and trains let's talk about automobiles too because you also own a stake in GM one of the fellows in the office says there's two fellows that each manager works your Hathaway does
Warrenyeah exactly it's a stake in GM I think it's 2.6 billion I think it's a little over it's around 5% of the company okay
Questionerum PM has been back in the headlines very recently because President Trump has been upset
[13:58]
Questionerand very vocally so with them closing that plant in Lordstown, Ohio. He's called Mary Barra to talk to her about how he would like to see the plant either reopened or would like it sold to someone else who can make something, manufacture something there. Again, President Trump has talked to Mary Barra about this. Have you talked to her about it?
WarrenI've not talked to her. I haven't seen her for a couple of months. Actually, I have a luncheon. coming up fairly soon but I think Mary Mara has done a sensational job at General Motors. That is not an easy job. She came into it and I think she was appearing before a Senate committee or something within a very short period of time. And I am a huge admirer of Mary Barra on the job she has done in General Motors. And the auto industry is not a static industry. And if you who keep doing everything the same way you did it in that business. In fact, if you aren't thinking many years ahead, they're making a big mistake. And every footprint that an auto company might have had 50 years ago or 30 years ago or 10 years is going to be obsolete at some time and the ones they're putting in now are going to be obsolete. It's the nature of it. So they've offered jobs, as I understand, many of those workers who are taking about other plants and and I, capitalism was described as creative destruction. And, you know, we had, in Omaha, we probably had 15,000 people working in the packing houses many years ago and we don't have them and now they work in insurance. And frankly, I'm glad they are. It's been good to us. So change is part of, change is part of a capitalistic system. And if you don't believe it, you're going to be, you're going to be doing some very dumb things. Change has been huge in the rail industry. If you look at the safety record and rail, how it's improved, you know, the efficiency of the operations. And that's good for America, good for the shareholders too, but it's good for America. Although the people who get left behind in those situations, that leads to the political discontent that we've seen in this country. They should be. And the inequality. So what do you do about that? Well, what you do in a country with $65,000 of GDP per cash, you're going to be. capita, per capita, that's more than six times what it was when I was born. Here we had a developed economy, and now you have six times what we had then. And you do take care of the people that for one reason or another can become, and it's a terrible
[16:41]
Warrenterm we used, but it's true, rogue kill in an economy. We had, we started, Berkshire Hathaway was a textile mill in New Bedford, Mass, and there aren't any textile mills in New England anymore. And we had 2,000 employees, half of them only Portuguese. With our prosperity, we should take care of people who become, in effect, roadkill because of something beyond their control. And I'm 100% for free trade. I think it has benefited this country enormously and will continue to benefit it. But the benefits of free trade are invisible. You don't think about the fact your shoes cost 10%. percent less or underwear or whatever it may be. I mean, you're benefiting all the time in ways totally invisible. There's nothing at Walmart that says you just saved 8% because we bought this somewhere or other than an American manufacturer. So you have this huge national benefit unseen, but you ruin the lives, economic lives, of people who are 50 or 55, and they're not going to be retrained or not going to relocate. We had a shoe factory in Dexter, Maine. And those people did a terrific job and they had jobs that their parents had for them. But they became uneconomic in a world economy. And they should, a rich country can take care of those people to follow policies which benefit all of us to take care of the relatively few who are dislocated. And I think that's the obligation of a rich country. G.M. has been looking to the future, trying to find what the future of its interests. industry is going to mean. And one of the things they've done for that is to invest in Lyft, which is going public tomorrow. The initial price for that just got raised, and it now values the company at around $20 billion in market capitalization based on this new pricing.
QuestionerHow would you value Lyft when they say inside the prospectus that not only are they not profitable? They've lost almost a billion dollars last year, and they're not sure when they'll be profitable. How do you figure that out?
WarrenWell, I don't know whether the asset. aggregate valuation talking about is close to $25 billion now or something like that. And I certainly wouldn't buy a business for $25 billion. I always think in terms of buying the whole business. We buy 100 shares of General Motors. We think we're buying the whole business and we multiply if they've got the billion, $200 million shares out and it's selling at $35 or something like that, that would be the 40-odd billion
[19:20]
Warrenin the case of GM. So I look at what I'm getting as a part owner of a business. And I don't know why, with all the things you can buy for $25 billion in this world, that you would pick a business that really has to be earning $2.5 or $3 billion in five years to even be on the same radar screen as things you can buy right now. So I have never been a big buyer of, well, we haven't bought an initial public offering, or I haven't. Charlie hasn't. I think since 1955, about 100 shares of Ford when it came out. What did you buy? What? It was Ford Motor. Gus Levy was running it. As a favor, gave me 100 shares. And I have to admit it now, I think the statute of limitations has expired. I took a free ride on 100 shares and made 500 bucks, and it's the only time I've ever done that. But I was making 12,000 a year at the time and 500 looked very good to me. But I think. I think there are, I think buying new offerings during hot periods in the market. I don't think it's anything the average person should think about at all. You have said that you've missed out on some of those. Like you should have bought Amazon a long time ago. You should have bought Google slash alphabet a long time ago. Could this be one of those scenarios? What was the last question? Could this be one of those scenarios? Oh, it always can be. Yeah. were a paradise of the desert in one time many years ago. No, they had them in a little case. They came up 32 times in a row, you know. You know, that's, what, a thousand times, a million times, a billion times. You know, four billion to one, a little over. So you can go around making dumb bets and win, you know. It's not something you want to take as a lifetime policy, though. I mean, I don't worry about, I worry much more about the things I do than the things I don't don't do it. I mean, I missed all kinds of opportunities in my life, but that's, that's, that's, you just want to make sure that you're on the side of the house when you bet rather than bet against the house. Your biggest holding is Apple. You have $47 billion a show in Apple shares. And Apple just had a huge event this week. It was star-studded. People like Oprah Winfrey and Jennifer Aniston were there, Reese Witherspoon. It was all to unveil. new streaming services that they have, news, entertainment. I just wonder, I know you have an iPad. Are you going to be downloading any of those things on your iPad?
[22:06]
WarrenYeah, well, I'm right up to the day. Here's my phone, incidentally. So I'm, I'm, yeah. Alexander Graham Bell lent it to me, and I forgot to return it this. The entertainment is a game that's really, I mean, the big players are in it and they're playing for keeps and one problem, they all. all have is that everybody just has two eyeballs and they've got X hours of discretionary time, they're going to sleeping, they're going to work, and so maybe they have four or five hours a day and two eyeballs and they're using them now. And now they're going to have a, and obviously there's disruption going on in delivering various things. People are always going to want to watch sports, you know, they're always going to want to watch new. certain things, they'll want to watch the Olympics, questions how much it's worth, whoever it gets it to them, but you've got some very, very, very big players that are going to fight over those eyeballs. The eyeballs aren't going to double. The time isn't going. I mean, it's a relatively fixed market, and when you get the size of certain players and disrupted in an enormous way by Netflix, which nobody dream about, really 10 or so years ago, and We'll see how a game like that comes out, but that's not an easy game to predict. Because you have very smart people with lots of resources trying to figure out how to grab another half hour of your time. And I would not want to play in that game myself. That's too tough for me.
QuestionerWell, you kind of are. It's your biggest investment.
WarrenOh, no. Apple's a lot more than, I mean, Apple, I love to see them succeed. That's a company that can afford them. mistake or two. You don't want to buy stock in the company that has to do everything right. That is not a good investment. In the mining business, you know, they said, you know, any mine being dug should be able to stand a certain amount of bad luck because you run into different things as you really get 5,000 feet down or whatever it may be. And there's some businesses that are quite predictable. So, Berkshire's made lots of mistakes over the years. And when I say Berkshire, I mean me, but I say Berkshire. We started with a textile mill. And we had two other companies that fed into Berkshire, Diversified Retaining of Blue Chip Stamps. One of it was trading stamps that went to zero. And we started diversified retailing with the department store in Baltimore, which eventually disappeared.
[24:58]
WarrenSo you're going to make mistakes. You don't want to wake them with too big a portion of your capital and you want to recognize them when you do it and you want to basically hang on to your winners. So I don't, it may just be the fact that I'm, you know, an 88-year-old male. So I don't look back and think about all my mistakes all the time. It takes too long anyway. So Apple should do some things that don't work. And they have got a marvelous. I mean, this is not a huge endorsement of what they just announced this week. You think this is going to be one of the things that's one? I don't know. Okay. No, I don't know. I know that if I'm Bob Agger at Disney, I'm going to think about every way that I can to beat them to the punch, you know. If I'm AT&T, if I'm Comcast, and obviously Netflix is, you know, is going to try and make sure that Apple doesn't get part of their territory. I mean, that is capitalism, that it's produced. Well, just think of what Dallas, you know, 250 years ago, three times, three lifetimes like mine, less than three lifetimes like mine. You know, there wasn't anything here. And just look around you, you know, as you come from the airport or wherever. This is a product of an incredible system. I mean, I get the goose lumps when I hear God bless America. Something like that, I mean, because this country, in three of my lifetimes, has turned, you know, something that the French were willing to sell a quarter of it to us for $15 million bucks, I mean, and throw in the mineral rights, which people in this nowadays will understand. Part of the payment for the Louisiana purchase, 20% of the payment was, what was it, $3 million in 15, 200,000 ounces of gold. And we got South Dakota where one mine turned out 40 million ounces ago, you know, I mean, I don't, I don't know who made that deal for France, but it. So this system is just remarkable. And when 10 years from now, when we look at the entertainment delivery, it will be what people want. whatever the creativity comes up with, and it's going to be a very, very big, hotly contested game. And the one thing I can guarantee is the public will be the winner.
QuestionerLet me ask you very quickly. Apple also announced a credit card that they're releasing the city this week. It is supposed to have no fees, and you don't even really need a physical card. You can do it just right over your phone. Does that concern you about Amex, where you also have something like $16 billion invested?
[28:00]
WarrenWe own about 18% of Amex. And, you know, everybody in the world wants to control payments. And I felt a little better, though. I was talking to Richard Fisher here just a few minutes ago. He reminded me that one point, the currency in circulation is now 1.7 trillion, which is up from about 90. The currency in circulation goes up 6% a year. Now, I don't know whether that's all a bunch of people tucking dollar bills or a hundred dollar bills under their pillows because they don't like interest rates that well currently. But by the, Payments is a huge, huge game, and different countries will respond in different ways. But I like our 18% position in Amex, and I like our 5.5% position in Apple.
QuestionerWhile we're on the subject of financials, recently in the news, another one of your major investments, Wells Fargo, has been kind of hounded. Maxine Waters, who heads the House Financial Services Committee, along with Elizabeth Warren and Sherrod Brown, two senators. have all said they want Tim Sloan fired. You're the biggest shareholder in Wells Fargo. Does Tim Sloan have your support?
WarrenDo I have an issue with... Does Tim Sloan have your support? I still didn't follow it. I'm sorry. Does Tim Sloan have your support? They want him fired. Oh, 100%. Yeah, 100%. I don't want his job. I actually came in once 28 years ago, you know, Solomon, which where the whole world was mad at them. And when I went to bed at night, I mean, I was scared because I didn't know what additionally had been done on, you know, 10 years earlier or five years earlier and how I deal with it because people were furious with us. So I'm very empathetic to anybody that walks into a big problem at a very, very, very large and politically sensitive, politically sensitive institution where you've got maybe two. 250 or so, 1,000 people, and the bad acts of one of them, you know, can reflect on you. That's the only thing that I worry about at Berkshire Hathaway, really. I don't worry about our financials or earnings or anything like in short term or long term. But I do recognize that there are, in our case, 390,000 people out there. And, you know, somebody's doing something wrong, probably 50 people or 100 people are doing something wrong at any given time. The only thing I have to remember is what my partner, Charlie Munger, who's now 95 pounds into me all the time, he says an ounce of prevention isn't worth a pound of cure, an ounce
[30:44]
Questionerof prevention is worth a ton of cure. So anytime you have anything unpleasant, you've got to attack it immediately. And so it's so easy just to kind of shove it off or hope somebody down the line solves it. And you pay a huge price for that and Wells Fargo has. There's a class action lawsuit that has been filed. against all of the big real estate companies. Berkshire Hathaway Home Services is the largest real estate company. It is one of those named in this class action lawsuit. And the suit is being brought by the lawyers who went after big tobacco and won. They look at what's happening in the real estate industry and say that's 6% fee that sellers have to pay when they sell a house. They look at it as a monopoly, a cartel. And they're going after that 6%. First of all, do you think it is a cartel?
WarrenNo, it's not a cartel. I think the largest company of the business does at most 3%. I mean, if you think of... I think they look at the fees themselves that are aligned with the MLS system, the multiple listing system, and say there's all this kind of behavior that tries to make sure that that that fee can't come down. And it is high relative to what you see in other nations. Well, I would just say if it's a cartel, it's not a very effective one. I think we need to beef it up or something. You'll always have them for sale by owners. You've now got people. There's many online experiments of one sort or another. No, I've never felt, I've been many years looking, although I've only actually purchased one home for myself. But I do not feel that there's an organization out there that is foreclose. foreclosing me buying on various things. For one thing, you know, usually there's two sides. There's a broker on each side of the deal. And you can probably negotiate with some brokers, certainly on the larger purchases. They are negotiated very frequently.
QuestionerYou did sell a house in California last year. Did you pay 6%?
WarrenI think we'd have paid 5 or 6. And my daughter did it. But it was whatever was standard for houses in Emerald Bay where we had it. We did not negotiate. with the broker. And incidentally, I feel that he very much earned his money. He did a terrific job. And he had no assurance after working on it for a year, year and a half the sale would even take place. So here he spent significant funds of his own in terms of advertising it and lots of time involved. And I could have called off the listing it at any time I didn't owe my penny.
[33:32]
QuestionerSo if you're looking. If you're looking for demons in the American capital system, I don't think you'll find it with your local real estate broker. Warren, let's talk a little bit about philanthropy, because that's why we're here today. The changes in the tax law have some people concerned that you are going to see a big drop in charitable donations because it means that fewer people are going to be itemizing their taxes. As a result, if you don't itemize your taxes, you can't deduct the charitable donations that you make. Do you think that that's going to be a problem?
WarrenI doubt it. The U.S. contributions to philanthropy, churches are by far the largest, incidentally, are run 2% of GDP amazingly close to that over the years. I mean, Americans are a generous people. I mean, compared to most countries, the 2% of GDP is high compared to most countries, is high compared to those countries. Interestingly enough, one time I looked at, you can go to the internet and look it up. They have, by states, they have adjusted gross income on tax returns, and then they have charitable contributions. And all of you can mentally try and think that one state is far above all others. And if you think about it a second, it's Utah. You know, I mean, because a significant part of the population is committed to 10%. Yeah. I asked him if they had a junior membership one time. Americans are remarkably philanthropic. And the people really who are the most philanthropic are the ones, well, like you saw today, they give their time. I mean, that's precious. You can't buy time. You can't, you know, I'm 88. I can't buy time and I can't buy love. You know, I can buy a lot of other material things. But when they give their time and their love in something like this, it's extraordinary. And then the people that have very little, and when they make a contribution, it really means one less movie or one less night to eat out or something of the sort. So Americans really stack up quite well in that respect.
QuestionerYou yourself have said that you are giving away 99% of your wealth. You're giving it to five charities that you are. foundations, right?
WarrenMy foundations that you've already identified. You know, I appreciate that. But I've never given a penny away that's changed the way I live, you know, or my eye. I mean, it is nothing compared to the people that are working at Glyde in San Francisco or the gate
[36:27]
Warrenoutset in Dallas or whatever it may be that are pouring themselves in their, and they're helping people on a one-to-one. basis often through various problems. So I, you know, nobody in the giving pledge, which we worked on now for almost 10 years, nobody in there, I'm glad they're doing it. And it's important, and it is true that you should be able to get more done with a million dollars than with a thousand dollars. But nobody there is changing their lifestyle in any way, shape, or form by writing big checks. And the people that really, the ones that you want your children to go up to be like are the people that actually, like my sister, Doris, that spent, you know, eight or ten hours a day listening to people that nobody else would listen to it. That's when you've really done something. Doris' foundation, the Sunshine. Yeah. Doris has tried to help, many, many, many thousands of people who got one of the short straws life. I mean, you know, I was, I was lucky. The odds, when I was born it was probably, you know, one out of every 60 live, maybe he was born in the world, was born in the United States. I won the ovarian lottery the day I was born in the United States. I mean, you know, 59 times out of 60 I would have been someplace else. It happened to be very fortunate for me, at least from a financial standpoint, to be male. So that's another two to one shot. So now, you know, so, but everybody isn't lucky. And the market system, which works magnificently in terms of turning out more and more wonderful stuff for people so that your kids are going to live better than you live. Everybody in this room is living better than John D. Rockefeller senior lived when I was a kid. But a market system has provided that abundance. But it also leaves some people that don't have market skills. Now they may have the skills that cause them to be willing to, you know, jump. into the water at Normandy, you know, and go to a beach where they know their survival chances are very low, but they don't have the skills to be a bond trader, you know, in New York, or wherever it may be. And so the market system is magnificent in producing overall wealth. But as the years go by, it disperses that less and less evenly. Go back 200 years. 80% of the people were on farms. The best guy working in the fields was worth twice, maybe what the worst guy? Now if you're the world's best well-to-weight fighter, you may be worth, you know, a thousand times.
[39:23]
WarrenSo it's a tough system, and we have, but it's the right system, but we have to take care of the people who are wonderful citizens that raise their kids fine. You'd love to have them living next door to you, but they just don't bring a big, they don't get compensated well in a market system. And back to the five foundations that you've chosen to fund. Why did you pick them? Well, I picked three of them because they also won the Ovarian lottery. They, three of them are run by, each individually by my children. It was a very good decision. Larry Tish, 30 years ago, talked to me about it. I'd seen, I've seen money do all kinds of terrible things for families, and I've seen it do all kinds kinds of good things. And I'd originally had the idea of them having one foundation. And then they said, let them, you know, each have a separate one. They can work together if they want to, but they don't have to. That is a magnificent piece of advice. If you really want your kids to work together, don't make them work together. And then simply because of, I mean, not simply, but because of size and the fact that, and the fact that Bill of Melinda Gates were highly intelligent, young, working with their own money, had the same beliefs that I do, that every human life is of equal value, and were willing to pour themselves in, not just with money, but with affecting the way they live. I mean, they're all over the world. And they could use big sums to advance. advantage. That was a very logical choice. And then there's another foundation named after my first wife, Susan Thompson Buffett Foundation, that does a very, very effective job in terms of family planning that is something that a lot of foundations don't want to touch. So that's the five foundations. And I tell them, I expect them to make a lot of mistakes. You know, if they're doing easy things, they don't need to be done. Let somebody else do them, you know. And government can do some easy things. But we want to do things that can make a difference that do not have natural sources for funding so much. I mean, Bill has worked very hard, for example, on wiping out polio, got it down to three countries. And I mean, just think of the, you know, the elimination of human misery and everything that can be accomplished by that. But that's got to be done on a big scale. And it takes lots of time. And it takes the willingness to fail.
[42:11]
WarrenAnd governments aren't good at doing that because they want to pass it off to, responsibility off to somebody else. And Bill and Melinda worked very hard at spending my money, which I like. They do the work and I get to play around at what I like. So those are the five foundations you chose. Lisa and Matt Rose have chosen the Gatehouse as one of their projects. What do you think about the work that you've seen? Well, I think it's extraordinary. I mean, you know, when you see Matt and Lisa, you know, and what you're But they don't have to do it. You know, I mean, they are putting themselves into something where hundreds and hundreds of women, I've been there. And I mean, they're changing their lives. They're giving them a chance. And, you know, I didn't need that. I mean, I was lucky in life, and many of the people this room were lucky, but a lot of people aren't. And it's a good thing for them that the Matt and Lisa Roses of the world exist.