Transcription
It's great to see you, y'all. It's great to see you. I mean, I've been at Omaha and, uh, I think I've made, prior to the last week, I probably made two plane flights and two ears. You know, I've been wanting to see my sister. I mean, just at, uh, free at last. You're 91. I'm 91. I'm 91. Good health. I couldn't be in better health. It's a little discouraging to me that my, my, uh, partner, business life, everything else, Charlie Munger, is 98. It's still going strong. I'm still the kid.
You have a successor in place? Oh, we got, we have a successor in place. But, but he's not warming up. You're not ready. I'm still on overtime. But I'm out there. You still tap dance to work? I tap dance to work. Charlie, I've never been, I've always been happy in the world, but I've never been happier. I've got, I've got the most interesting, to me, job in the world. I've got people you wouldn't believe to support me. It takes about four or five, it takes a village to a degree. But I've got three people sitting right down the within 20 feet. I'm here, 30 feet. Uh, you know, my assistant, DePonsonic, uh, the fellow that handles all the trades I tell them to do in the morning, and money and billions flow in and out, and he takes care of it all. Mark Millard. And I've got a Chief Financial Officer, Mark Hamburg, who knows more than most of the Chief Finance Officers and legal officers and everything else in the world. And, and, uh, we've all worked together for dozens of years. And, and, uh, we like each other, and everybody helps me. It would be better. Choosing who you work with is everything. I mean, uh, you know, I write a little bit about the annual report, but the, the choosing what you do and who you do it with, you're gonna, you know, if you're like me, you're gonna spend 70 years or something. Uh, my assistant hasn't worked the whole time with me, but she'll, she went to work for Berkshire, uh, when she was 17. And she still looks 17. And, and now, uh, you know, she'll be with us 50 years here at Berkshire. And, uh, they know me forward and backwards, and they accept my eccentricity as they help me. It's, and what would they be? But I would say this, if you take, if you'd like Mark Millard, uh, I walk in in the morning, and I call him first, and I tell him exactly, I've already done that for today, and I tell him exactly what I wanted to do. And, uh, he does it all day. And some days, good many days, he moves billions of dollars, purchases and sales. He takes care of all the whole thing.
When do you make those decisions? I, I think all the time. I, I'm on the clock at Berkshire all the time.
Walk me through a typical day. Well, a typical day is, I, I get to work at, um, uh, well, I, I get up. I get up, uh, usually, uh, in a few minutes before seven, so I can catch the seven o'clock news and network news and, and, uh, Omaha. And, uh, so I got a few minutes for it. Um, and, uh, uh, sometimes I turn on the network news. I always turn on, uh, Sand BC. And, uh, I, I look at what prices are doing, and what's happening in Europe, and what's happened in Japan. And, uh, I, then about, you know, the market opens, our time, 8:30. Although we're doing maybe things in Japan or Germany too. But, and I call Mark, uh, at eight with the market opening, 8:30. And I tell him exactly what to do for the day. And I probably won't change it during the day. And it's usually a percentage of something. I, I will say, buy or sell X percent of the trading volume. And I'll give him a list of things. If there's a limited price, I'd give him the price. Uh, uh, and then he does it all day. And I, I don't need to check with me. Uh, and, and he sometimes does billions of dollars worth of business. Uh, he buys the treasury bills, which we, the last couple of years, we probably bought five billion every every Monday. Uh, and, uh, I would guess that we might be the biggest buyer and, uh, uh, just week after week after week after week.
You made your first investment when you were 11 years old in 1942, 80 years ago. I took $114.75, every penny, I'd say, and I bought three shares of City Service preferred. And City Service is a pretty well-known name now. Then, in fact, in 1920, City Service, I think, was the fourth largest company in the United States in terms of number of shareholders. It was, it was a big company. And, uh, so it had a preferred stock that was selling at 38. That it skipped, started skipping the dividends during the Depression. So it accumulated dividends on it of 60 or 70 bucks. And of course, it was par value of a hundred dollars too. And it was something at 38 now. And, uh, breakfast one morning, I followed a little stocks every day. But, but then I made my plunge. And I had a roughly this amount of money. So I bought three. I don't remember this precisely, but I think I told my dad in the morning, now let's move that pop. I call it. But that's bullpup. But you felt the thrill of it then? Oh, I've been, I've been reading about it and following it. The hallmark. I read, I, I really had read every book in the public library that was on the stock market by you, by 11. By 11, I'll guarantee you. And some of them twice. I started out reading the ones in my dad's office. And, and I just love to read. I read other things too. But I, I knew more when I was 11 than I know now in terms of actual mechanics of the stuff. I mean, I don't know what happens when I put an order in. I mean, it got in the machinery of the way orders are executed now. I would know if I sat and worked in a in a trade room for a day or two. But I don't really know the mechanics as well of what happens when an order is processed today as I did when I was 11.
What is it you enjoy the most about it? Because my Charlie, you don't pick stocks, you pick companies. Yeah, that's, but when I was, when I was 11, I picked stocks. I had the whole wrong idea. I, uh, I was interested in watching stocks, and I thought stocks were things that went up and down. And I charted them. I read books on technical analysis. I read, I, I read Edwards and McGee. I think that was the classic then. I mean, hundreds and hundreds of pages. And I read that whole thing over and over again. I read Garfield. I lost it. I read everything. And I thought the first eight years, I thought the important thing was to predict what a stock would do and predict the stock market. And then I read Ben Graham, you know, when I was 19 or 20. And I realized that that I was doing it exactly the wrong way. And, but it didn't hurt that I had that background. And everything, and I re-jiggered my mind. And when I read the book, The Intelligent Investor, and at from that point, I never bought another stock. I bought businesses that happened to be publicly traded. But I became an owner of a business. And I did not, I did not care whether a stock went up or down the next day, or the next week, or the next month, or the next year. And I didn't have any idea what it would do. I didn't know what the stock market would do. But I knew businesses.
I've asked people about your genius. Whatever would you describe it? Now, I'm, I'm a bright guy who's terribly interested in what he does. So I've spent a lifetime doing it. I've surrounded myself with people that bring out the best in me. And you don't need to be a genius in what I do. That's the good thing about it. If I put into physics or so, a whole lot of other subjects, I've been also-ran. But I am in a game that you don't need, you probably need 120 points of IQ. You know, but you, but 170 doesn't do any better than 120. It may do worse. Probably do worse. But, but, uh, you don't really need brains. What do you need? You need the right orientation. You know, 90% of the people, I'm putting the figure out the error, but 90% of the people that buy stocks don't think of them the right way. They think about something they hope goes up next week. And they think about the market is something they hope goes up. And if it's down, they feel worse. I feel better. And you think about party. And what do you think? I think about what the company is going to be worth 10 or 20 years from now. And I hope it goes down when I buy it because I'll buy more.
Do you have a competitive spirit? Clearly. Yeah, clearly. Well, but you gotta, you gotta be careful about what you compete. You know, it's a good thing I don't have a competitive spirit in chess or, you know, you know, or football or anything like that. Well, I just, I've, I've been an observer there. I, I enjoy watching things like that. But I, I try to keep my competitive experience in a game where I can win.
Do you have a killer instinct? Nah, not exactly. I've got, I wouldn't call it a killer instinct, but I do, I do know this. Well, I want to do something, I always want to do it big. But I put my whole net worth in City Service preferred, you know, $120, $114.75. And I put my whole net worth. And, and I've never, since I was, well, since that day, and you know, March 11, 1942, I have never had less than 80% of my money in American business. You can call them stocks or equities, but I see them as American business. I, I've owned a piece of American business for, at least 80% at all times. And, you know, I've just, I don't want to own anything else. I went on a home and, you know, things my family wants and all that. But owning five homes doesn't mean anything to me because I'm, I don't need to be happy in one home. And there's a certain amount of things that go wrong with everything. And if I got two homes, I know I've got more problems and I don't have more happiness.
What brings you the happiness? Oh, that I would have to be honestly say that, that what makes me happiest is what I'm doing. What I'm doing, you know, I, allocating. I enjoy two things about it. One, and all went over time, that's mean I'll beat everybody else or anything like that. But I'll, I, I mean, the game is very, very, very easy if you have the right lessons in your mind about what you're buying. I'm not buying stocks, I'm buying pieces of overwhelmingly American business. Uh, and I'm happy when that's, happy when that's, uh, when I'm doing it. I'm happy when stocks are going down. I'm happier when stocks are going down because I, I can buy more of them with the same amount of money. I'd be happy if I was a farmer, I'd want farmland to go down, uh, so I could buy more acreage. You know, if I was, I mean, it just makes sense. And I'll tell you the second thing I really like. I like being, I like being trusted by people. And, you know, I like, I would rather do what I do with partners than do it sitting in a room myself, even though I might make more money that way.
You like the idea that people are trusting you with their savings? Yeah, they just say, look, I've saved money, I don't know what to do with it, and I trust you. And they give it to me. And, and they don't, most of them give it to me. I mean, certainly in the original days, but even now, to a 90-year-old degree, give them to me with the idea for the lifetime. And then they, most of them, I mean, they've done this a long time ago, most of them give it away when they get through. They never quit saving. I mean, and of course, I'm sort of their savings machine. They save it and give it to you. Yeah. And then they say, keep it and just keep building it. And they don't do it with the idea they're going to retire when they're 65 and then build great castles or anything like that. It's just basically, if you do, I mean, if you spend some money later on, but overwhelmingly, they, if they've been saving when they were 25 and saved a little money and gave it to me, uh, they're still saving. Uh, there were, there were 11 doctors that we met at Hilltop House. And there was one friend of mine, uh, named Bill Engel. And he was trying to get these other doctors to to join with me. So I don't know if it was 1958 or not. I invited 12 doctors to this dinner at the Hilltop House. He had me come. And, uh, he basically said, this is my friend Warren. And if he's got any brains, you'll give him some money. And, uh, so we spent the evening. And these guys were all public, there, low 30s. And, uh, 11 of the 12 put in $10,000 each. The 12th said to Bill, he said, well, what happens if we lose our money? And my friend Bill, never forget it, he said, well, dummy, he says, we'll form another partnership. That was the guy that didn't invest. He got reminded of this by the other 11 for the rest of his life. And, and those people stuck with me. Helen, and one of them died in the last year. It's a friend of mine, and he's 101. And his name was Stan Trools. And he came from a little town, uh, about 300 people near Omaha. And he became an ophthalmologist and a super wonderful guy in every way. I mean, he was, he, he helped all those fellow doctors. And, and, uh, but two of the other 11, two of them are still alive. And the money, and the amount of money, I mean, they, they never, they haven't built, you know, they could have done anything. I mean, they could have lived bigger than anybody in Nebraska. Uh, but it was the lives they liked. And, and so have you. Yeah. So have you. Yeah.
You live in the same house you've lived over? I've lived in the same house since 1958. Sounds about 63 or 64 years. A quarter of the life of the country. I've lived in a quarter of the life of the country in one house. And I like being five minutes from the office, too. Let me just think, if I had a 35-minute commute. I've gone to the same office now since, uh, January of, uh, '62. So it's, it's been, it's, it's been, uh, 60, 60 years. And let's say I saved 30 minutes every day. Commute, yeah, each way.
Let me turn to the stockholders letter that you wrote for 2021. Well, I started that letter in my head. I've already started next year's letter in my head. But I started that letter in my head because you can begin to see what I want to talk about right about it. And then I just have to, it keeps forming. But that isn't a newsletter that comes on. It, you know, it's, it's what I want to talk to my, well, I was afforded originally in terms of my sisters, who had probably all their money and, and Berkshire, they trusted me 60 years ago, and they just put it all in. And they're very smart. They, my supporters, drawers died here recently, but both of them, very, very smart and interested in financial matters. But they're not enough like me, and so they got other interests too there. And, uh, basically, they've had to be all their money. And they don't want to hear day-to-day. So you tell them what's happened in the last, once a year. It's like I sit down with them and tell them, you know, here's what might be interesting to you. And that's, I'm doing that all year in my mind. And I'm doing it, I've done it. You know, I know what I'm going to talk about next year, unless something changes and dramatic.
Can you tell me what that is? No. And, uh, but, but I can tell you this, uh, last night, and I went to Music Man. And, uh, among the people who went with me was my friend, Carol Loomis. Carol was 92. She's a great journalist, and she's a good writer. She starts editing. I sent her the report, which I think is perfect, always at the time. I sent her the report in, uh, I've usually December. And, uh, uh, and she keeps turning back, and she, she kind of won't let me send it out without, without checking to make sure that I, I've lived on a comma, some blazer. All right. So right up to the end. But so the report, although it stated February 20th, that that report basically was written, uh, well, written in my head for a long time, but it was, it, it was what I thought was finished, probably in December. And then Carol tells me there's a lot of work to do.
No big investment in 2021 because you didn't see anything that met your requirement? Yeah. And I, I wrote the report. And people can go to liberty.com and they can see exactly what I think. And I thought for 40-some years of each report. Uh, but for you to make a big investment, what do you need to know? I need to know that I think the Berkshire all the way is going to be worth more money someday down the road, not tomorrow. I want to do the down. If I'm buying something, uh, you know, and, uh, I would say this, uh, the world has changed a lot since that report was written. But the world changed a lot in 2000, two years ago, when, because just think about it, because the pandemic. The pandemic. It's almost exactly two years later. An event happened in two years ago. And we didn't know exactly what it was. We didn't know what the financial result would be. We didn't know what the physical result was. You know, I mean, we just didn't know. But when I wrote my report in February, I didn't know the pandemic was going to end. We had a week later. And I didn't know that the American financial system was on the brink of, you know, chaos, a few weeks later. And if somebody wants to read a great book that just came out, it's a sensational book called Trillion Dollar Triage, that tells on a day-by-day basis what was going on in March that, uh, were in my opinion, J. Paul, he matched Paul Volcker in terms of doing things that needed to be done that day. You know, and, uh, it's a, it's a great day-by-day. Before the book just came out a couple days ago.
We expect the Fed will raise the rates. Does it remind you of the 1970s? Everything in everything that happens in the investment world reminds me of something or other. I mean, every day, if it's a boring day, it reminds me of something. I mean, but, uh, I don't think that way. All I'm trying to do is buy businesses. Let's pretend there is no stock market. Let's say I had to buy these privately, like you buy a farm privately, like it by an apartment house privately. Their investments. So you're looking to say, what can I do with money I've saved to put it away so I feel good about getting it back later under any circumstances? But not necessarily on a given moment. But if I have a farm, it's going to take me a while. But I, it is, people would be so much better if they, if they actually didn't have a stock market in terms of buying businesses. But you know, you've made two huge investments recently. One is Activision.
No, I, in, we have two fellows in the office that each, they manage total about $30 billion dollars between them. Ted Wernle and, uh, Todd Combs. Two people you chose. They've been with us for about 10 years each. They have total authority over the month. And best. Yeah, they're just as independent in buying things as I am. I mean, uh, if they decide, they decide to buy something in the country I've never heard of. And it's like, I mean, they don't, they don't ask me. I mean, they don't.
But are you saying that maybe they were decided to? Well, I've actually investment in Activision. I've actually said that one of those. I'm so very clear. And there's a letter on the on the website that describes exactly the circumstances because they got mission reported in the press originally. And so I have written a letter there because actually a number of other first-class news organizations picked up a story without checking whether it was true. I mean, they ran with it without independently reporting it. So they, they're one, I'm not going to name names, but there's some names in my letter. But they, they just ran it wrong, a wrong story, which had implications and so on. So I, the letter is up there. It's gonna stay posted forever because it's, it's the correct record of what happened precisely. Is that one of the other fellows decided to buy Activision, didn't ask me, and it's fine. I mean, and he, but he bought it. Ah, he bought about, I think I used a figure of 85. I think when we double-checked it, because it was 76 or 7. But we'll list every day, uh, that he bought it and the price he bought it. And the price was reported, it was wrong. The, and by the press, and then it was picked up by a whole bunch of other organizations. And prenators wrong. And so millions of people read an incorrect story. And so we put up with the facts. And we will, we will. Well, how about the annual meeting? I think I'm a slight. If anybody asked me for it, it'll show every day's purchase is the exact price. And that was done by one of the fellows in the office now. And that was like I say, 77 was in October. And the rest was in early November. And he paid this, he paid about $77 a share. And, uh, you can buy it today. And Microsoft announced it. It, the first story said weeks later, which makes it sound like two or three or four weeks later. Ah, it was, uh, probably 12 weeks later. It said months later. So the investment was months before Microsoft decided to apply our Activision. The other guy liked that. There's a stock as a business. And so he's buying it. And, uh, uh, he paid an average of like I say, 70, seven dollars a share. And, uh, and we will have a list of every day at every price. And then, I guess it was, well, there was a big expose type story run. Uh, but he wasn't buying during any of that period. And then, uh, the preliminary proxy came out. Uh, uh, has been fired with the SEC by Activision deciding describing the history of the deal as to when Microsoft came to them. And it was, uh, it was sometime in, uh, a couple months later that Microsoft first approached, uh, uh, Bobby Kotick. And, and then four other people. You can read it all to filed with SEC. And, uh, uh, then, uh, after it was announced, the stock, you could buy the stock at 78 a share. So the implication of the first story was that it was a somehow that somebody made a great deal by getting tipped off or something. Damn thing. Simply nothing. One dollar a share. You're gonna buy after it was announced higher than one of the other fellows paid for about, uh, about what, 15? About close to 15 million shares. He's still got it.
How about Occidental? Well, Occidental, uh, a week ago, well, you know, a couple years ago, we financed Occidental and had some warrants coming out of it. Who I never met before. And, uh, I got a call on a Friday. And, uh, and, uh, Bank of America saying that that Occidental's going to need some money to buy Anadarko. And the, I think knowing then they were in competition with Chevron. And would I meet with them because they needed a lot of money fast? And, uh, I said, sure, how about tomorrow? And, uh, went back and forth. I think came up Sunday instead of Friday. And we met at 10 o'clock in my office on a Sunday. And I said, we'll give you $10 billion dollars under these circumstances. But we'll, we'll do it. We'll do it tomorrow. And, and, and, you know, that's not Wall Street, but that's that's Berkshire. And so, uh, and they knew I was good for it. And so we made a deal, Monday night, the next day, on the night. No, I told our guys, you work all night. Her bath works all night for them. Let me get this thing done on Tuesday.
But is there much negotiation? Or you simply saying this is what I will do? This is what I'll do. I always say that's what I'll do. I mean, I, you know, I've said that's what I'll do many times. And I've always, and, and that is all I'll do. But this is what you have come to represent. I mean, think of the financial crisis. And think of Goldman Sachs. And think, I said, what I do. You said, what you do. But it gave them credibility when they needed it. That Warren Buffett and Berkshire Hathaway had decided we were putting in X billion dollars. And the winning question we were putting it in was an IOU. Where they all, we sent them to cash. And it was right after Lehman. And, and there was a run on the whole economic system. Everybody was a domino. And the dominoes were falling. And Goldman Sachs knew they'd be fine if all the dominoes didn't fall. And they had to worry about the United States Congress because they were mad at, I'm really mad at banks this time. They weren't mad at banks in this particular guys, but they were mad at banks. And they really didn't, some of them didn't fully understand what the hell was going to happen. And we had the, they were mad because this was a financial crisis. It was more than, I mean, it was a financial crisis cubed. But, but it had an origin in financial institutions. It, a lot of people did a lot of things wrong. But there was plenty of it in Wall Street. Plenty of it. Mostly. But there's plenty of it elsewhere too. I want to emphasize that. But, but Wall Street made a lot of money out of doing a lot of things that can contributed to the crisis. Here's my point. Um, Berkshire and Warren Buffett emerged to a point where, where your reputation and your credibility and our money. [Laughter] The body was important. It was a determining fact. They wanted the money. Yeah, but they also wanted credibility. They had to have instant credibility. And that's what they, they had the, they had to have somebody who counted besides people whose position it was to lie.
And how did you build that, which is an essential part of who you are and Berkshire Hathaway? Wow. I started on March 11, 1942, as we talked. And I'm the father. That was the right father. Yeah. And I was lucky. I think you may have heard this. Lenin once said, there are decades where nothing happens, and then there are weeks when decades happen. That's very well put. And when you're buying businesses, don't, don't call them stocks. When you're buying businesses, when you're buying apartment houses, sometimes when you're buying raw land, you know, all kinds of things. There are times. There's times when you get a chance to act and do something really intelligent. May happen once every 10 years, or once every 20 years, depends on what field you're in, where you live, what you know, all of that. But most of the important things, there's a lot of foundational work. But the actual big acts in life are when you propose to your spouse. I mean, I mean, forget all the other stuff. I mean, if you made the right decision, and you get the right answer from her, she, you're 90% of the way home in life. But also things happen in the world like the pandemic. That's true too. And it can change everything, as it did happen in 1929. It happened in 1918. I forget when the things were in 1907. You know, I mean, when they closed the stock exchange back in 1914 for a long period of time, people don't ever think about that. 9/11, they closed the stock exchange for a few days. And, uh, I mean, there are big events in this world. We're going through one of them right now. Yeah. But I'm, I'm gonna get into discussing that particularly. Allow me this. I mean, this is having a huge effect on them. It's true. World order. Yeah. But it doesn't do me any good. And it doesn't do the world any good for me to talk about it.
So can we talk about the global economy then? You know, in terms of, well, where we are. I can tell you where we are. But, yeah, but let me phrase it this way. In terms of the global economy, I mean, you look at the United States. The United States is the United States economy. And it's very easy to look at the statistics on it. I mean, more people, a greater percentage of the American population is is, uh, wealthy now, or having more income now than they've ever had. And if you look at whether Bank of America will give you their average deposit, I mean, you just look at the wealth of the, the, and that doesn't mean everybody's wealthy. But it does mean relative to any other period of the time. Uh, you know, I mean, people have more money now. They have, they have, they get mortgages at lower rates than they've ever gotten. So if they want to buy a house or something. But is that going to continue? I mean, mortgage rates are raising, as you know. Yeah. We're in a new place for you. But no. All right. I'm not asking you to predict anything about. Right, right, right. Today, Charlie, you live in an environment. Yeah. You live in an environment where the bottom two percent in terms of income in the United States, at the bottom two, a high percent, and for sure, the top one percent, all live better than John D. Rockefeller was living when I was six years old. John D. Rockefeller was the richest man in the world. And today, you can get better medicine, better education, better entertainment, better transportation. You can do everything better than Eagles. You can, I mean, it's astounding. That's in my lifetime. That there, if you want to, if you want to watch a football game, you still had to go there. And I can sit there with this big screen, and they keep showing me the replay, so they explaining to me what happened. And I mean, and maybe everybody doesn't have the screen as big as mine, but damn near everybody. There's a screen, or an iPhone, or a computer, or access to one. And they have access. I mean, well, I was born, you know, I, the dentist didn't use Novocaine. I mean, you know, I mean, so that has been progress. Obviously, none in nowhere more than in the United States. Well, relative to the base, maybe more than, I mean, but there's no country that's done what our country's done in seven. If you go back three of my lifetimes, you're looking, you know, you've been to Oklahoma. So it's three lifetimes. You are looking at less than one percent of the world's population. Closer to half a percent. Half a percent of the people in the world are sitting in this land. They don't work harder than people in all the rest of the world. I mean, in terms of hours of unpleasant labor, everybody's got hours of labor. In those days, practically, they don't have, they don't come laden with gold. And, you know, they are half of one percent. And they work the same hours. They got the same IQs. They may be in a little self-selected in terms of enterprise, in terms of going across oceans and things. And fast forward a couple of lifetimes, and they've got 20% plus of all the bounty in the world. I mean, that is, that is something that has worked like nothing. Just imagine that. If you've gone to anybody and then the Constitutional Congress, you know, 1789, if you go to any one of the representatives there, and you said, I want to tell you what this place is going to look like, you know, in three more of your lifetimes, your great-great-grandchildren, great-great-grandson, yeah, are going to be flying in the skies. They're going to be watching sports all over the world. They're going to entertain their medicine. They'd hold you off to a monitoring society. But at the same time, as you know, and you hear this all the time, you know, 845 billionaires in America. Yeah. And they have more wealth than the bottom 60. True. And that's up to government. Government has a proper place. And the capitals of believing. But Henry Ford, by 1920, two or three, he was turning out two million cars a year. Now, how many could the Ford family use? 30, 40? I don't know. So two million people are getting the benefit of what he's doing. And he's getting thirty thousand. That's he's getting 50 cars. And he's getting a whole bunch of little claim checks. Just think of it. Everything on Thomas Edison did, all the things he did, you know, he made some money, but we better. I mean, we're using it. Yeah. It belongs to us. And it doesn't take what an hour of labor delivered to you a hundred years ago, and what an hour of labor delivers to you now for you and your family. It's unbelievable. But that's an argument for the forward progress. It's an argument for civilization. It's an argument and for capitalism. But it does capitalism doesn't say get rid of a referee and a government. We've got a government that can tell capitalism what to do. You think they do? And that's what they should do. And they do in different ways at different times. And all kinds of things. But I, I've got this money, which I'll remember, I can't, you know, it's, it's, but it has value to somebody. I mean, it, it's claim checks on future, uh, output. That was in there. The climbing charge born to me. So if I want to buy 50 super yachts, I can do it. But, uh, what does it mean to me? It, it can buy more things for other people. They're useful for them. And I don't, I have everything I want in life. You know, I have everything. So, uh, it's not evil. But the federal government is the boss in the end. And they shouldn't screw up capitalism. And capitalism shouldn't screw up the federal government. It's very simple.
But does capitalism need to be reformed itself? As you know, it's evolving always. We started in 1789. We had, we had business. And it's gotten far, far unbelievably more productive for people. And the only thing it can do with what it produces is given to other people. Um, it, it isn't like the 50 richest guys in the country can say, I'm just going to eat everything. They're turning out products. You know, that that iPhone that I have, which I'm probably the least capable guy in the world of of working with it, but it makes life better. It is the reason that Apple is the richest company in the world. Yeah. And you've had Tim Cook on before. And you can hear as a company that a guy invents something, you know, all kinds of other smart people do the same thing. Apple, I think, sells less than 25% of the smartphones in the world. I know a guy that produces this money. I see as Apple does. But Apple has produced the one. This is the most useful to people. It's an aspirational product. Somebody, you know, a lot of people have made cars. But you got a few survivors that made the ones that people like the best. And, you know, we would be selling 16 or 17 million cars a year in this country. We had 50 producers. Or whether we got three. And we never used to have. But here is an interesting fact. As you know, Tesla has more market value than all the other automobile companies combined. Yeah. Elon Musk. What does that say? That shows what America produces. Hey, Lauren, didn't I mean, he's taking on General Motors and Ford and Toyota and all these people who've got all the stuff. And he's got an idea. And he's winning. God, that's America. I mean, we're, you can't dream it up. I mean, it's, it's, it's, it's astounding. Now, you still need a referee. That's the government. Sure. And you need a judicial system. And, you know, but that comes with government. And we've got the best. So far. We've got the best system. We've got a better system than we used to have. And we'll have a better system 50 years from now.
Why are you so sure? Well, I just, I, I see 91 years of it. I've never seen a period where I didn't believe that and I haven't that it will get better. Of course, in every aspect of, not every aspect. We go backwards and something. No, it's not. But it's unbelievable what has happened. You know, let me just think about it. You know, we've had a civil war. We've got a Great Depression. We've all, we've had all these things. Pandemics. We've had. Yeah, we'll continue that. We'll have, I'll guarantee you, we'll get them next year and the year after and here after. But in a herky-jerky but dramatic matter, business moves forward. Government moves forward. More important, people move forward. The thing that you fear the most, and you have said this, is nuclear war. Yep. I think with Einstein, you know, maybe it was Bert Russell, this one, but he said, this changes everything in the world except the way men think. You don't want to talk about the current situation where one of the questions is, what if we end up with a World War III and a nuclear catastrophe? Is the reason you don't want to talk to me about it because you don't want to be quoted? And people, I want to talk about it. But I, but I've talked about nuclear catastrophes. Yeah, past. And the, the truth is that, yeah, well, it was Einstein that said, I know not what the weapons of World War III will be, but World War IV will be fought with sticks and stones. And that says it all. We've got the power, and other people have the power to essentially destroy the planet. And climate change is important in all of us. I mean, we, there's all kinds of things we should be working on. But in the end, the only thing tomorrow, I mean, I guess a comic good hits or something. But the, we can destroy this. And it's not just us, we can end the planet. And that, and I don't want to talk about much more beyond that. I don't like, I don't like saying that to people, even, but it's true. It was true when I said instead of. I mean, it's been true. You know, we came close to the Cuban Missile Crisis. And it is being talked about now. I'll let you talk about it. Um, but let me, let me before we leave capitalism, in a sense, do you see any changes that businesses ought to do? Because, you know, there is, you know, on part of Larry Fink and others, there's always things going on. And where does Warren Buffett come down on that argument? I will be talking about a lot of things on April 30th at our annual meeting. And, uh, and that's what I'm talking to all of our shareholders. Sure. At the same time, and the people who've trusted you. Yeah. To manage everything. There'll be 40,000 in attendance. And it'll, uh, you know, it'll be taken around the world. And, and that's when I can talk to all if they want to listen in. All everyone go on every one of my partners can hear at the same time on a Saturday. So star merch is not open until Monday. And something digest it. I think most replays or anything else because they can watch it on, you know, uh, you know, CNBC will be something watching. It's not like being there. No. Well, it isn't for a lot of people. But it's, we're going to have, in my view, you know, if it were held today, well, no, it's what April 30th. Bring. But we will have, I think, uh, from everything I have, we're going to have the largest, uh, group coming along. I think ever. And I sure hope so. Do I hear you? And you can tell me I'm wrong here, that all those things that I might want to hear, and your partners might want to hear, and everybody wants to hear, a, because you know, because you're a student of history, B, because you have written about the evolution of history in annual letters, as well as in answering questions at annual meetings, on the questions of war and peace, and questions of new world order, on the questions of sanctions, on the questions of of inflation, all those things that I'm enormously curious about. You're holding back talking to them until you choose the venue. Yeah. And there may be some, there may be a lot of things like, I don't feel I should talk about it that time too. But that is going to be a very, very important meeting. And, and I get that time to take all these people who've trusted me with their money, trust me with our future. And I talk to them at the same time. And they can ask questions that, uh, they can be important. They can do anything they want with us. And, and I, I love it. And Charlie loves it. But you understand my curiosity. Oh, of course. And, and, but do I understand this is an important moment? This is a moment to speak to. And we're in them. We're, we're in a crucial time. Yeah. But we've been in lots of crucial times. We're in a crucial, a 9/11. Did we think we're in a crucial time? Sure. The world changed in five. And I didn't know how it had changed. The president of the United States didn't know how to change. Nobody knew what the hell was going to happen.
I want to know how Warren has changed from decade to decade to decade. Do you have a sense of that? I've gotten dumber, but I've gotten wiser. Okay. That's that's a nice phrase. But what does it mean? It means that it means that I can't add a group of numbers remotely as fast as I used to be able to. I can't remember sometimes when I walk upstairs. But I, while I'm walking up the stairs, I think about something else. So by the time I get to the top of the stairs, I don't remember why the hell I walked upstairs. It means I forget names so easily. It means that I can't read as fast as I used to read. I am a decaying machine that still feels wonderful. But I can't hear as well. I can't see as well. My balance is as good. But it doesn't interfere with my happiness, my work, anything, especially work. Well, I mean, clearly your happiness. But, but it doesn't, you know, you're saying you're outstanding. It doesn't interfere with anything that ages. I can get on a plane, go anyplace. You know, I can, I can do anything, as long as you don't ask me to dance or juggle or, you know, or even remember, you know, who did I meet yesterday. But in terms of the doing the job that you do, allocating capital, I, I can actually do that as well as ever. As ever? Yeah. That, that sounds awful. But, but better than that. Do you do it today better than you did it 20 years ago? Yeah. I've got a different set of opportunities. And that gives you, you obviously. Well, Berkshire is much bigger. Yeah. That defines that reads choices. The size restricts the the kind of things that can have an important effect on what I can do for the people who leave the money with me. So I, I have to think about big things. And they're
Limited. I mean, you know, I, I made money in an entirely different way when I was working with, originally ten thousand dollars, uh, 9,800 to be exact. And, and when I started working with other people's money, it was a hundred and five thousand dollars. In May 5th of 1956, I had 105,000 put into that partnership, and Berkshire's the outgrowth of that.
I went to the house that I was renting for 175 a month the other day. Uh, uh, I just come back to New York and, uh, uh, there's a little room, I would say it's, it's about five feet by eight feet, and I've written on the door because I knew the people that owned it earlier, "This is where it all started." In May 5th, 1956, and I worked out of that little room for two years and moved off. So, yeah. And then I got another little room that worked there for four years. That and everything, everything I did could double our net worth, you know, that was me. I could find, find them all the time. But I mean, they were, there were thousands of possibilities, and I wanted to know every one of them. And they're not thousands of possibilities now. Got impossible. Baby, no, no possibilities. Not many whales out there. I don't know. But there's, well, there, there, there's something. Is that a moment of great exaltation when you, when you realize that's a whale? Sure. No, I see something. Yeah. Well, I mean, if you're looking for, if you're looking for whales for for months, it's got to be, you gotta get some kind of thrill out of it when you find one.
Let me talk about something that didn't work. Uh, you and Jamie Dimon and Jeff Bezos come together. Um, healthcare is a huge part of our economy. And here we saw three really smart people representing three enormous institutions. We had all the money in the world, all the money in the world, and we had, we trusted each other. Yes, totally. And it always was well-justified. So, I mean, we, we had the, we had a good accommodation as you could have in terms of resources, flexibility, ah, mutual interests, everything. And what was the intent? The intent was, well, we had several intents, but I mean, what we, we had an intent and we had a hope, and we knew the hope was nothing. I mean, we knew that we didn't know whether it's 51, I guess, under one against it. But, but what was the problem was so big, it was worth trying. Yeah. And what was the downside to us? Nothing, right? Zero. Exactly. Maybe we looked like we couldn't solve it, which was true. But, but that's okay. Why couldn't you solve it? All right. It's, it's three, you know, it, it's, it's as big as federal government receipts. I mean, it's, it employs more people, and it's not a terrible system. I mean, it's, I mean, it's so much better than it was 20 years ago, and 50 years ago, 100 years ago. Uh, so, I mean, we've got a wonderful medical system, but we're fighting over it all the time. Well, I mean, you know, I mean, you know, anytime you get a big pie in this country, people fight over it. But I mean, as you know, until Obama did what he did, you know? Yeah. Well, I think someone failed. And then I think what Obama did was good. I think it was a real important progress for the American people. And then the question is how they make it better. And, and to make it better, what we need to do is, a, bring a price down, and b, make that accessibility to it. You've got to be sure everyone, a rich, rich, rich, rich, rich, rich, rich, rich, unbelievably rich country like America, like America, can be sure that every single person not only has access, but feels in here, she has access, that that knows that he can get prompt, reasonably prompt. I mean, you can circumvent with pandemics and everything, but reasonably prompt. And, and if this is, and essentially free. I mean, it isn't free in the sense that society doesn't pay for it, but the ability to get good medical, uh, attention fast, reasonably fast, uh, should exist for every American. But it does. Simple. It doesn't. It's, we, we do pretty damn well, but we can do better. But, but we're not first in the world, or second, or third. Or, well, I listen, I, I don't know what medicine, but I know what everybody tells me, and I believe that we are the best in great many things. People come to the United States if they got a lot of money, and for a lot of things, we are. There's no way it touches us, uh, as I understand it. And might do, but just understand what you're saying. The quality of the medical care is as good as it possibly can be in terms of the best physicians, the best therapies, the best intelligence, and great medical schools. But every access is the issue. It's better than Zebermann, but it isn't. It's got room to go. I mean, it's better, it's ever been. Charlie, most things, almost everything. Did any ideas come out of this? Well, yeah. I, I think all three institutions learned something. And I think they actually, it wasn't any that much money anyway, but we all got our money's worth. Sure. I have a sense of just in terms of, you know, we employ 360,000 people. Amazon, you know, who knows? I'll be the employee. And, and Jamie Dimon, you know, that's fantastic. So we all learned something, but we didn't, we didn't, we didn't have any breakthroughs at all. We should learn something. Here's what was interesting about it for me was was the fact that these three institutions, led by these, you know, remarkable human beings, uh, smart, successful, it was taking all that IQ and all that experience and applying it to a huge problem, you know? And, and you ask yourself, are there other areas in which, yeah, well, you can say that everything we do in the country can be improved, right? Education can be improved. I mean, everything. Tell me, are the things that you think we ought to be talking about? I'm going to talk about climbing in just a moment. Are the things that you think we ought to be talking about? I mean, I am happy to tell people that that the same thing I've told them before, but it's, they have, they'll never get the message, most of them, but a few do. That's the most, you know, best thing to do if you want to invest for the long term is index as the S&P 500 index, right? And what's happened, of course, is that organizations like to grow, so they set up indexes on different industries, different countries. And as soon as you do that, you're violating basically what Jack Bogle said. He says, you don't know enough to pick the right businesses, which means you don't know enough to pick the right countries. You're right. You know enough. All right, let me get to that. Yeah, that's what something able to get through. But we will see a time in which the Chinese economy is bigger than the U.S. economy someday. Uh, you know, they're good, four times as many people, and, and, uh, logically, uh, they will grow and grow. And we will be too. We're the two superpowers. Are they going to grow as fast as they have been growing? It's hard to tell. I don't know the answer to that, but they've got some issues. They've got issues. No, I, I got issues of debt. They've got issues of, uh, oh, everybody, everybody's got issues. Demographics, yeah. Everybody's got issues. Yeah. Those kind of issues. They've got also issues. We've got issues throughout the history of the United States. Dave, okay. Also have issues of the environment and climate. Uh, the UN just released a report, and we have heard it, and we constantly hear it. How worried are you about our success in protecting the planet? Well, the biggest, biggest threat, obviously, is nuclear weapons. But it doesn't mean you don't protect against other things, right? And if there's a one percent chance, even I'm not wait, I, I, I can't quantify it, but if there's a one percent chance of something going through the world trouble 10 years from now, 50 years from now, 100 years from now, that'll be working on that too. Are we doing? Oh, no, we're doing a lot. The problem is, of course, that it's, it requires, it requires the whole world to do a lot. There are a lot of problems like that, including the pandemic, including, uh, the environment, that transcend national boundaries and need, yeah, yeah, cooperation. The virus, the virus doesn't have to clear her immigration. Virus does not have to clear immigrants. No, that's, that's simple. It can be brought. There's a lot of other things that aren't physical viruses. When you look at Tim Cook, I think he's terrific. It's that simple. I've written that in the annual report. Yes. And he is a great manager. He's a, not only a great man, he's a great human being, but he's a great manager too. He's an incredibly great manager, but he's, he's a great human being. What do we look for in a great manager? You look for him, you know, you look for somebody that has results. You look for somebody that has a penalty of trust and character. Ability, trust, character. Yeah. Somebody you can trust. Same thing you want in a spouse. [Laughter] Charlie always says, you want to marry somebody better than you are. He says, in my, my case, that leaves the whole world brightly. But it's the truth. I mean, you always want to be around people who are better than you are. They pull you in the right direction. What's the chemistry? What's the, what's the nature of the relationship between you and Charlie? It's a long, long relationship. In May of 1959, his father died. He had worked in the same grocery store as I had. In 1940, I worked here in '41, and we never met. I didn't know his name. And, uh, his dad was, you know, well-known all on, but I just did not know. I was a kid. And we moved to Washington. And, uh, so what was the name of your dad? Went to college. I never heard his name until I was 19, until 1959. Oh, no, I heard the name, but I'm at the Davies, maybe '57 or '58. He came to Omaha in 1959. We met, and, uh, it's been, yeah, the best relationship except others I've had, you know, and family and so on. But he's been the person, along with Tom Murphy and probably Joe Rosenfield, subsequent to my dad, that I, at least, that I didn't want to disappoint. Good to have somebody, you know, if you don't want to disappoint. It's, it's enormously important. I think you're a better person. Do you disagree on a lot of things? Or, well, we, we've never argued. We've never had an argument. People say, well, that's impossible. I'm telling you, we've never had an argument. And, and, but you could say, I believe this, and he says, I believe this. You just don't argue about it. Yeah, but we don't even have to say it, hardly enough. I mean, we may know where we, that I would say this or that. Why bring it up? You know, he, I think, has expressed some concern about about index funds. I, I support everything Charlie says, but I don't agree with it. I don't mean on that. I mean, uh, it doesn't mean I agree with about everything, and he doesn't agree with me on everything, and we've never had a problem with that in since '59.
Jeff Bezos. Yeah. What about him? Jeff is a friend of mine, but, uh, I probably see him personally. I see him once a year. About him? Yeah. And I, I can't recall ever talking to him on the telephone. Maybe I have. No, I've never sent him an email, but I don't know how to send emails. You know how to get them sometimes? Yeah. No, I got a system, but I don't, I literally don't know how to send an email. You seem to have done okay without knowing, so far. But you once said to me, you know, that, I mean, he's one of the smartest businessmen. Oh, absolutely. And, and proof is in the pudding. ABS. I redo that reports. I see him once a year. Uh, I mean, I've usually seen him once a year in Sun Valley. Uh, and, uh, I enjoy that. And actually, at Sun Valley, uh, at the Allen Company conference, ah, we've had a dinner, but a few of us are then, and so I probably have at least three or four of those. It's remarkable to see a company which was founded on selling books, now is a technological giant. It couldn't happen, but it did. When Jeff was a McKinsey, word a suit, I don't know whether they drove across country to New York to Seattle, but if they'd stopped it all, and these, I didn't know him, he said, "What do you think of this idea?" "Yeah, good luck." Jumping. Yes. But you have told me that he, uh, at times would come up to you and have questions, uh, if you were making a presentation at a conference, yeah, on Sunday. Yeah. Um, I, you know, he's a very, very, very smart guy. And, you know, I think, you know, well, I mean, look at it, a good bit of misfortune is going to help society in various ways. The Giving Pledge is well, uh, he's got his own plans on on that. But, but Mackenzie, Mackenzie's joined it. She wrote a beautiful letter. If you haven't read it, go to the Mackenzie's, his former wife, yeah, and go to the Giving Pledge, uh, where we've got all the letters, and you will not read anything more beautiful than what Mackenzie has written. And she's doing it. She's doing it. Yeah, she's doing it. It's not just dark. I mean, she's really made contributions to. She's doing exactly to Black colleges and lots of other things. Charlie, she is doing exactly what her inner self and which she has expressed through the letter she's written and some other things too. But the letter she wrote, The Giving Pledge, Jesus, expressed a philosophy of life that I think is as good a model as anybody can find anything. I've only met her twice, maybe even. And Melinda Gates is also, and Bill continues to make a huge impact on, yeah, philanthropy. And they do it, especially during the, not with just money, they do it with time. They're on the scene. They do all the time. I mean, they give up time. It's the most precious thing you've got, you know, pretty much. And, uh, they do all the time. They are giving something. They're giving something. I'm not willing to give time, that much time, to that. Yeah, I'd rather give my time to Berkshire because because that's what I enjoy doing, and that's what you do well. Yeah, that's what I do well, and it produces money, and that does well for other people. But it doesn't, it'll do better if it's given by other people. But that was a choice you made when you gave them. It's a choice he drives me a long, long time ago in terms of Susie and so on. But, but yeah, right. Somebody's going to do something with the money, and those are claim checks on the output of others, productivity of the world. You can redistribute it to places where it's needed more, and I am all for that. I just don't want to do it myself. I'd rather do what I'm doing.
Speaking of time, uh, I have a few more minutes of your time. Uh, so let me ask these final questions. Um, have you achieved pretty much everything that you wanted out of life? Well, the truth is, yes, but I'm looking forward to tomorrow too. Any regrets? Well, if you look back, you could always say, oh, you should have done that. But it, I mean, nuts. If I look back on my life and said, I haven't met him. The luckiest guy imaginable. And I will say this, aside from sickness and death, everything I thought was bad at the time has turned out well. And when you say you've been the luckiest guy, I assume that means a community and family, but it also means, in your case, as you have said often, the country that you live in. Oh, totally. Charlie, if I'd been born any place but the United States, my life would have been totally different. And incidentally, you know, it helped to have the parent I do, but, you know, I'd say is essential. It's given me everything. And your dad was a man you most admired. Yep. Why was that? Well, I never saw him do anything in his life but that, uh, he didn't believe it turned out. I didn't agree with about things later on. I mean, I accepted this. Sure. Yeah. I mean, when we sat around the dinner table in the 1930s, I mean, my dad was the most, and I didn't even imagine so, you almost had to say something bad about Roosevelt to get dessert, you know, or something. But, but I mean, my sisters and I grew up with that. But that's okay. Yeah. Yeah. He didn't, he, anything I did, he supported as long as it was, I was behaving okay. And even when I didn't behave okay, he never gave up. But came out this week that you are one of the five richest people in the world. On that list was ahead of you was Bill Gates, Elon Musk, uh, Jeff Bezos, and the man from France. Um, are now, what does that mean to you? Means I can direct the way a whole lot of money goes, uh, just back to society. But what really means something to me is is the record of Berkshire. That's what I've done. The money flows out of it, but, but I paint the painting. The world can bid on an auction, but that is fun. And it's been fun. It's been way more fun doing it with Charlie as my partner. It would have been alone. I mean, it just incomparable. So the legacy is Berkshire Hathaway. Oh, sure. And it's, it's my friends. And that is a perfect segue to my last question. Uh, if you were giving one last lecture, what would you want to say? Oh, I would, I'd probably talk about what's been important to me in life and how they should decide what's important to them in life. And so, what's been important to you in life? It's all been, whatever it is, I've done it. But I've got a family I feel terrific about. I got a business, and I've got millions of people who have trusted me. Thank you. It's a pleasure. Thank you. It's always fun.