QuestionerHi Warren, how are you? What brings you to Omaha?
WarrenI'm just in town, kind of passing through, thought I'd stop by.
QuestionerIt is. Are you ready for this weekend?
WarrenI'm ready for this weekend, sure.
QuestionerIs this your favorite weekend of the year?
WarrenYeah, I would say so, yeah.
QuestionerWhat are you expecting with the crowds here this year?
WarrenIt should just, it should at least match the record. In terms of the tickets we sent out, it was just a touch higher than the record year. It fell off the first year. year when Yahoo started webcasting it, and then it's come back. So it'll be, it'll certainly tie the hive. There's a lot of things that are happening, but as we were building up this week, kind of heading into things, we heard about the deal where you're stepping in and backing Occidental and it's been to take over Anadarko. How did that come together?
WarrenWell, it happened right here. On last Friday, less than a week ago, last Friday, I got a call in the middle of the afternoon from Brian Moynihan, the CEO of Bank of America. And he said that they were involved in financing the Occidental deal, and that the Occidental people would like to talk to me. And I said, fine, I can talk to him anytime. And I think he emailed later on and said that Vicki Hollow, CEO was traveling, and that she called me, morning. So she called me about 9 o'clock on Saturday. And I said I'd meet with her any time on Saturday or Sunday. So we scheduled a meeting for 10 o'clock on Sunday morning. And she and Oscar Brown came, arrived at 10 o'clock, and by 11 o'clock we had a deal. And they had us committed unequivocally come hell or high water for $10 billion. and if the deal is made with Anandarco. So they had to get their own board approval, but they walked away with it. 9-11 happened or anything like that. They had $10 billion for the deal.
QuestionerDid you do this because you're betting on the oil industry or the Permian Basin or on oil prices, or is this just the terms of the deal itself?
WarrenWell, the oil prices are the big determined over time, obviously. If you're in oil, same thing is true. if you're in copper for copper price. So oil prices are enormously important, but I was familiar with Oxa. I'm generally familiar with a Permian base at all. I've ever been there. If I were there, I wouldn't know what to do. But, no, it was a sensible deal for us, a sensible deal for them. And that's, I proposed it, and they decided whether it made sense.
[2:55]
WarrenAnd then when we finished at 11, they went back to the plane. plane. I called Ron Olson. He's on the West Coast. It was 9 o'clock his time. And I said, we need to get this done by tomorrow evening. And I said, Kravath will be their lawyers. And I assume they'll get similar instructions. So just make whatever it takes and get it out. And in 10 minutes, Ron had a couple of people working on it.
QuestionerYou mentioned the plane, and there was a story. I'm not sure if you saw that, about the plane, plane that Occidental took out here got picked up by some people who were scouting for it, and someone wrote an article about it, and a guy who'd been tracking it saying, hey, maybe this is what's really happening there.
WarrenYeah, I've read about that service. I've read about years ago where people track plane numbers and try to make deductions, particularly in some small town where there's only one employer or something of the sorts. So that fellow turned out, whoever it was, turned out to be correct, but I think I should point out anybody out there who wants to do business with us that if they take a net jets plane nobody will be able to track them. We might, for those of you don't know, we might own that. We do own Nets and it really, it really does make a difference. I mean, you cannot track who is going from here to there, and if you use a company play, and it's a big way of running a billboard that I'm in town for something. Good commercial for Nets on the way with that. I don't know if you saw it, but Charlie gave an interview today to the Wall Street Journal, and he says that he wishes Tim Sloan was still running the bank, do you?
QuestionerWell, I was 100% behind Tim Sloan, as I told you.
WarrenThe day that it turned out that his resignation was announced, he told me the day before, but I think Tim Sloan, from everything I know about him, is an excellent banker, and I was delighted when he was running the bank, and it just got so he felt he couldn't be helpful under the circumstances that he existed in Washington. So he decided to resign, but I would have never asked for his resignation. There have been some other headlines that came out of that. Charlie said he doesn't want a Wall Street guy making the damn decisions around there. I think that's what he said, the damn decisions. He may have even said worse than that.
QuestionerYeah, you have said similar things. You said it a little more politic than he did,
[5:17]
Questionerbut what's wrong with a Wall Street guy or a Wall Street woman? Why would you want a mainstream Baker versus Wall Street? Actually, there are plenty of people in Wall Street that would be very capable of not plenty, but you know, certainly dozens.
WarrenYeah, you would be capable of running Wells Fargo. And, but they would not be, they would not be, they would be piñatas from now until the election time. And they would face questions that aren't really questions, but senators and, and, and, and, and congressmen, that are using a hearing to make a statement and they wouldn't be listening to what they said or anything. you're sorry they'd be poison in Washington and well's doesn't eat poison in Washington or frankly anybody wants a job and good enough to take that job uh shouldn't want it either i mean it's it's it's a terrible way to spend your time right just in terms of what washington's doing so it's nothing you have against wall street it's just oh no there i mean we own stock in jb morgan we own stock it in golden sacks and oh sure i mean no no there's a lot of people that are very capable of running very good banks i think we've got the very best of them that they it's just under these political circumstances wall street associated with banks associated with one that people can make political speeches about is just going to be poison between now and the election
OtherCharlie had a few other things to say let me quote a few things to you because he really laid into dick kovosovitch and john stump here's what he said about dick kovosovitch he never listened to anybody he never stops talking and he's full of himself he would not learn anything from anybody what do you think
Warreni like that covasman said dick dick expresses himself very forcefully charlie expresses himself very forcefully and maybe the two don't mix that well but you like dick kovassi oh i mean you know he was there during during the financial panic and you know wells wells came out of the panic better than i think any major bank and when wakovia needed saving it was it was great that wells was there and and kubasovitch i believe was running things i'm not sure exactly when he turned the baton over to uh to john
Otherwell speaking of john stump here's what charlie had to say about him he said he was almost as bad but not so loud and persistent
Warrenyeah well i don't i would say he was he was as good and then you could follow the rest of it you're going to have more things to probably
[7:51]
Otherclean up from charlie after he says these things this week yeah this is just a war about the next week i'm glad you're sort of getting me in shame here wanted to talk to you just what you thought about apples earnings they just came out this past week um better than a lot of people had been expecting were they better than you had been expecting
Warrenwell i don't really have big expectations about quarterly earnings with that company even with berkshire i mean so i was pleased with what they reported but it wasn't like i had something going in my mind if they reported x i was going to be happy and they reported 98 of x i was going to you know be panicked or something to sort but what they talked about and and reported is consistent with my the reason we own you know 50 billion dollars plus of apple i feel good about apple
Questionerhave you been buying more apple
Warrenwe we haven't changed our holdings unless and i have no reason because it's true but we there's one fellow that owns a little over one percent of our holdings in the office and i don't i don't see what he does they have no reason to think he's bought or sold an apple once in a while you'll tell us something you're buying or selling anything else you're buying or selling these days well it i wouldn't tell you if i will i will tell you one thing i'll tell you one thing you'll see in the 13f which comes out in a couple of weeks which may cause you to ask me that question in two weeks but doesn't really is not significant uh from my standpoint uh one of the the two other fellows in the office that that manage money tied and ted one of them bought some amazon but but so it'll show up on the 13f it is not true to say that i am buying amazon it's true to say that berkshire is what whatever shows up there although you've been a fan of amazon and jeff bezos for a long time
Questioneryeah i've been a fan and i've been an idiot for not buying but i just i want you to know that it's no personality change is taking place or anything it's somebody else's
Questionerokay so we'll keep that in mind when that comes out in a couple weeks um we did just hear from the federal reserve this week j powell the chairman uh making some news on wednesday when he said that he thinks inflation is transitory do you think inflation is transitory
Warreni think the transitory is the lack of inflation yeah the lack of inflation and and that meaning that look the street took it to mean that he could raise rates that that that might
[10:24]
Warrenbe the next move when there were people thinking he might lower rates what do you think so so he was saying in effect that that the abatement or the modest that we're not we're not going to say there's no inflation for forever well i agree with him i don't know anything about what's going to happen when or what the fed is going to do or anything else but i think that uh i don't think our present conditions uh can exist in terms of fiscal and monetary policy and and various other elements of the political landscape i don't think they can coexist with really low inflation rates over time but i've been wrong on that for some time and i may be wrong for a long time in the future i would say this there's nobody better to run the federal reserve uh than uh or be the chairman of it j paul i've had some experience with him in the past and he is he would be my choice um just in terms of things you might be surprised by i i'm stunned that we're still looking at a tenure with a two and a half percent yield well that's what I can't reconcile a 5% budget deficit in a world of low unemployment, low interest rates, negative interest rates in many countries. No economics textbook I know that was written in the first couple thousand years discussed even the possibility that you could have this sort of a situation, continue and have all the variables stay more or less the same. So I think it'll change. I don't know when, I don't know what degree, I don't know what part of it will change. But I don't think this can be done without leading to other things. In economics, like other things, you could never do only one thing. And we will look back this period and be surprised that we didn't see what was coming next.
QuestionerWarren, I want to thank you for your time today. I know you have a lot of things that you have on your agenda, but thank you very much.
WarrenWell, thanks for coming. Okay. Okay. Take care. Bye-bye.