WarrenIt's really, it's really, it's really be, it really feels good to get back and be doing this in person. We've, it's been three years and, uh, it's a lot better seeing actual shareholders, owners, partners. And we, uh, Charlie and I are now, uh, combined, uh, if you were wrong for fractions, uh, the two of those are 190 years old, and, uh, and I really think you're entitled, if you're the owner of a company, and you've got two guys, 98 and 91 running the company, you're entitled to actually see them in person. I mean, I...
OtherThanks, Warren. The first question comes from Jack Sissilecky, and he says in the annual letter that you wrote in February 26, you mentioned that Charlie and you saw. little that excites us in the market. Yet around March 10th, the deal for Allegheny was announced, and then later the Occidental announcement, then did the disclosure of the HP investment. His question is, what changed from the time you dated the letter to the time the investments were announced? Did the name suddenly become interesting in the space of a month and a half? Or half a month?
WarrenWell, Charlie, you want to give your version? I'll give my version.
CharlieWell, my version would be we found some things we prefer owning to Treasury bills.
WarrenCharlie's given the total answer, but I'll talk longer and say less. What happened was that a few stocks got very interesting to us, and we also spent a lot of money. What happened, the market, and this is really important to understand. In the last couple of years, because our market has probably, it's always been a combination of a casino, and And when I talk about Wall Street, I'm talking about the whole capital formation market. But the, and trading market, et cetera. But the market has been extraordinary. Sometimes it's quite investment oriented, kind of like it always you've read about in the books and everything, what capital markets are supposed to do and you study it in school and all that. And other times, it's it's almost totally a casino. Well, we bought in two weeks thereabouts, 14% of Occidental Petroleum. And you'll say, well, how can you buy 14% of a company? In two weeks, you wouldn't be able to do that with Berkshire. I mean, you can't literally buy it. You can say you want to buy 14% of the company. It's going to take you a long, long time. But overwhelmingly, largely, large large companies in America, well, all of them, they became, they became, they became
[3:34]
Warrenpoker chips. And people were buying and selling like three-day calls or two-day calls. And the more people, times people pull the handle on the machine, the more money the machine makes. I mean, it's very clear. And overwhelmingly, where did people go? the investors just were sitting around and there weren't very many and the money was being made essentially by a bunch of people gambling on things and that enabled us in a two-week period to buy 14% of a business that's been around for decades and occasionally Berkshire gets a chance to do something and it's it's not because we're smart, it's because we're, the only thing I'd say we qualify on, and sometimes I wonder about that, but I think we're sane, you know, I mean, that, and that's the main, main requirement in this business.
WarrenWe get all these suggestions from index funds, a letter saying, we, the chairman, and the president or the chief executive officer are the same person, and that they have some professor somewhere that thinks that American business has work better if at a separate, if Warren could sweat him in two and have each half work. And to me, it's the most ridiculous criticism I've ever heard it, like, it would like, O'Dusus would come back from winning the battle in Troy and so forth, and some guy was saying, I don't like the way you were holding your spear when you won that battle. It's some guy that's never run any business and doesn't know anything. I don't think too much of this.
Warrenactivity would argue that in a lot of the wealth advisory business people are charging for skill and delivering closet indexization in other words nobody can stand being that different from the crowd in results they're afraid they'll lose their fees so everybody does the same thing it's it's mildly ridiculous the world is mildly ridiculous I would say that the future for a long time is about as assured as you can have in the world. We don't have an answer for the nuclear problem or anything, but we have a culture that A has worked. B, has the shares and the shareholders that will carry it a long way. And, you know, the first year, let's say I die tomorrow. The first year, you know, everybody says, you know, what's going to happen? They're going to spend it all, they can do all these things. You've got the shares held in a place that it can't happen. You've got a board of directors that understands that our culture is 99.9% of running the business.
[7:08]
WarrenThey don't think that having meetings of the committees and bringing in outside experts or anything like that. mean it's a process that the world is adopted and they've done it for reasons we understand but very sure it's just plain different we are a business that exists for people that trust us the big worry of course is that somebody comes in and figures they can make billions as a group or you know people that sell the businesses and say it's better to be private you know, or it's better to be pure this or something like that. Well, you know, we're a pure partnership is what we're pure at. And we do have what we think is a special relationship with our owners. And I don't think the relationship changes and the ownership doesn't change that much.
QuestionerWell, look what happened to Robin Hood, from its peak to its trough. Wasn't that pretty obvious that something like that was going to happen? Tell me again what it should... Robin Hood, when they came out and I went public and got a little lured, everybody in all the short-term gambling and big commissions and hidden kickbacks and so on and so on. It was disgusting.
WarrenYeah. And it says the last year and they got mad at you and they sold a bunch of their stock and they got the money and...
QuestionerYeah, but now it's unwa-raveling. God is getting just.
WarrenOne of the things we bought, one of the things I bought, was bought, was bought. For a different purpose, by a different manager months earlier, he bought roughly 15 million shares of Activision. And I never paid. I knew about the company, but I would just see it at the monthly report. But then on January, I don't know, 17th or 18th, something like that. Microsoft announced they were going to buy Activision for $95 a share. Now, when they announced that, At that point, Activision becomes a different kind of security. Their securities are, in this case, a common stock, whose value depends not on what the market price does, but whether a given corporate event occurs, an announced corporate event occurs. Well, Microsoft wants to buy, Activision will say it, well, they've had $95 a share. And they've got the money. and obviously mergers and big mergers, tech companies, all kinds of things. I've got all kinds of problems with the world generally in terms of opinion. So you don't know what the Justice Department will do. You don't know what the EU will do and all kinds of things. So in order that the news people don't feel that there's no news there, I can tell you that as of yesterday.
[10:19]
WarrenWe own about 9.5%. If we go past 10%, there'll be a form file with the SEC and so on. But it is my purchases, not the manager, who bought it some months ago. And if the deal goes through, we make some money, and if the deal doesn't go through, who knows what happens.
QuestionerLet's go to this question from Matt Feigl. His question is related to the growth of passive investing through index funds in ETS. He says, passive investment vehicles now control upwards of 50% of the United States stock market. The actual owners of these passive investment vehicles decided passive investing makes the most sense for them. Yet in doing so, passive investors have empowered the large index funds to become the biggest activists in the market. These passive managers now enjoy enormous, and I would argue undue influence over corporate governance. Do Warren or Charlie see any benefit or logic to a rule that would prohibit passive investment vehicle managers from voting the shares they control for their passive investment clients.
WarrenWell, I'll take that. I think you guys right. I think the thing is out of control and counterproductive. And I don't think it's good for the country to have three passive investors with bright young men from Harvard or what else, telling them what proper governance of corporations is. It's not a good to vote.
QuestionerHave you changed your views on Bitcoin and or cryptocurrency in any respect?
WarrenWell, I shouldn't answer any questions on the subject, but I will. If you told me you owned all of the Bitcoin in the world, and you offered it to me for $25. I wouldn't take it because what would I do with it? I have to sell it back to you one way or another. I mean, they may not be the same people, but it isn't going to do anything. Basically, uh, assets. Assets to be, to have value, they have to deliver something to somebody and and there's only one currency that's acceptable in the United States. I mean, you can come up with all kinds of things. We can put out Berkshire coins or, you know, we can put up Berkshire money or anything like that. And anybody that thinks the United States is going to change to where they let Berkshire money replaced theirs, you know, it's out of their mind. In my life, I try and avoid things that are stupid and evil and make me look bad in comparison with somebody else. And Bitcoin does all three. And the first place, it's stupid because it's very likely to go to zero.
[13:27]
WarrenThe same place is evil because it undermines the Federal Reserve System and the National Currency System. which we desperately need to maintain its integrity and government control and so on. And third, it makes us look foolish compared to the communist leader in China. He was smart enough to ban Bitcoin in China. And with all of our presumed advantages of civilization, we are a lot dumber than the communist leader in China. My general citizen, there's no way to prove it. But I essentially believe people people are now behaving somewhat more tribal than they have for a long time. And, I mean, people are always going to be partisan and they're going to have religious beliefs. They're going to have all kinds of things. But it gets pretty tribal. And I want to tell you, I speak from experience because I've been tribal. And, you know, we're confessing today. And, you know, Nebraska. football is tribal. But it gets, it can get very dangerous when people, one group of people say two plus two is five and another say it's two plus two is three, you know, and they're going to give you those answers if you call them. Charlie, what tribes are you a member of them?
CharlieWell, in California, we have a legislature which is completely gerrymandered, so nobody can ever be thrown out by the voters. And therefore, the only people will be thrown out by the voters. And therefore, the only legislature are insane rightists and insane leftists. And they get together every 10 years, and there's usually six moderates somewhere in the legislature. And so they rejigger all the districts to throw them out, because neither party can stand them. Now that is government in California. And you live there and you have to go back?
WarrenYes, yes. I'm sure you're welcome you. And I prefer living there, they're living in Russia.