QuestionerThe question, this particular question, comes from Ward Cookie, who lives in Belgium and who was still emailing me this morning in reference to the first quarter report. And he asks, my question concerns your repurchase of Berkshire shares. In the third quarter of last year, you spent almost $1 billion buying Berkshire B stock at an average price of $207. But then you got to a period between 19, between, December 26th and April 11th, when the stock languished for almost four months under 207, and yet you purchased what I think of as a very limited amount of stock, even as you were sitting on an enormous pile of 112 billion. My question is why you did not repurchase a lot more stock unless, of course, there was for a time an acquisition of, say, $80 billion to $90 billion on your radar?
WarrenYeah, the question, whether we had $100 billion or $200 billion would not make a difference, or $50 billion, would not make a difference in our approach to repurchase of shares. We repurchase shares. We formally, we used to have a policy of tying us. of tying it to book value. But that became obsolete. The real thing is to buy stock, repurchase shares only when you think you're doing it at a price where the remaining shareholders have had are worth more of the moment after you repurchase it than they were the moment before. It's very much like if you were running a partnership and you had three partners in it and the business was worth $3 million, and one of the partners came and said, I'd like you to buy back my share of the partnership per a billion. I started out with millions, I'll stay with millions, for $1.1 million, and we'd say forget it. And if he said $1 million, we'd probably say forget it. And if he said $900,000, we'd take it because at that point, the remaining business would be worth $2 million and we'd have two owners and our interest in value would have gone from a million to a million and $50,000. So it's very simple arithmetic. Most companies adopt re-purchase programs and they just say we're going to spend so much. That's like saying we're going to buy X, Y, Z stock and we're going to spend so much here. We're going to buy a company and we're going going to spend whatever it takes. We will buy stock when we think it is selling below a concert estimate of its intrinsic value.