Transcription
Nobody worries about doing any kind of financial transaction with Berkshire and, uh, you know, today on Saturday about 9:00 in the morning, we had a, I got a phone call and, and people made a deal the next day committing Berkshire to pay out $10 billion, uh, uh, come hell or high water. No outs for, you know, uh, material adverse change or anything like that, and people know we'll be there with $10 billion. And they know in the insurance business when we write a policy that they can't come be payable during the worst catastrophe in history or maybe payable 50 years from now, they know Berkshire will pay. And that's why we've got $124 billion of float.
Okay, station five. Good morning, Charlie. I'm Neil Narona. I'm 13 years old and from San Francisco. I feel like I see you in our living room a lot. My dad is constantly playing these videos of you at these meetings. And he teaches me a lot of lessons about you guys. But many of them require the delayed gratification skill. I want to know, is there any way that kids can develop the delayed gratification skill?
I'll take it if you want me to, Warren. Go, go, go, go, go, go, go, go, go. I'll take that because I'm a specialist in delayed gratification. I've had a lot of time to delay it. And, and, uh, my answer is that they either come out of the womb with the delayed gratification thing or they come out of the womb where they have to have everything right now. And I've never been able to change them at all. So, we identify it, we don't train it in. Charlie has eight children, so he's become more and more of a believer in, in nature versus nurture.
>> [laughter] >> Uh, you'll probably sign some nice old woman who's about 95 out there in threadbare clothing and she's delaying gratification right to the end and probably has 4,000 A shares. It's just these second and third generation types that are buying old jewelry. It's interesting if you think about, we'll, we'll take it to a broader point, but if you think of the long, a 30-year government bond paying 3% and you allow for, as an individual, paying some taxes on the 3% you'll receive, and you'll have the Federal Reserve Board saying that their objective is to have 2% inflation, you'll really see that, uh, that delayed gratification if you own a long government bond is that, you know, you get to, you get to go to Disneyland and ride the same number of rides 30 years from now that you would if you did it now.
I, I, I, I, I, the low interest rates for people who invest in fixed dollar investments, uh, really mean that, uh, you really aren't going to, you know, get, have eat steak later on if you eat hamburgers now, which is what I used to preach to my wife and children and anybody else that would listen many years ago. But, uh, uh, so it's, I don't necessarily think that that, uh, for all families and all circumstances, that saving money is, is, uh, necessarily the best thing to do in life. I mean, you know, the, the, if you really, you really tell your kids they can, whatever it may be, they never go to the movies or will never go to Disneyland or something of the sort because if I save this money 30 years from now, you know, we'll, we'll be able to stay a week instead of two days. I think, I think there's a lot to be said, uh, for doing things that, that bring you and your family enjoyment rather than trying to save every dime. And, uh, so, uh, I advise the, the, the delayed gratification is not, uh, necessarily an unqualified, uh, uh, a course of action under all circumstances.
Uh, I always believed in spending two or three cents out of every dollar I earn, saving [laughter] the rest. But I, I really, I, I wish I had everything I wanted. I mean, but one thing you should understand, it, uh, if you aren't happy having $50,000 or $100,000, you're not going to be happy if you have 50 million or 100 million. I mean, it, it, uh, a certain amount of money does make you feel and those feel around you feel better just in terms of being more secure in some cases, but, but, uh, loads and loads of money. I, I probably know as many rich people as just about anybody and, uh, uh, I do not, uh, I don't think they're happier because they get super rich. I think they're, I think they are, they are happier when they don't have to worry about money, but, uh, you don't see a correlation between happiness and money, uh, beyond a certain place. So, don't go overboard on delayed gratification.
Andrew? This question comes from a, um, shareholder of yours for more than 20 years who asked to remain anonymous, uh, but wanted me to start by saying, Warren and Charlie, I want to preface this question by saying it comes from a place of love for both of you and the beautiful painting you've drawn for us in the form of Berkshire. But now >> [laughter] >> please update us on succession planning. And [laughter] as you think about succession, would you ever consider having Greg and Ajit join you on stage at future annual meetings and allow us to ask questions of them and Ted and Todd as well, so we can get a better sense of their thinking?
That's probably a pretty good idea and we've talked about it. We have, we have Greg and Ajit here and any questions that anybody wants to direct on them, it's very easy to move them over and, and, uh, so we, we thought about having four of us up here. Uh, uh, and this format is not set in stone at all. It, uh, uh, because you, I can tell you that actually the truth is Charlie and I are afraid of looking bad. Those guys are better than we are.
>> [laughter] >> They, uh, um, you could not have two better operating managers than, than, than Greg and Ajit. I mean, they are just fantastic. What they accomplish, they know the businesses better, they work harder by far and, and, uh, and you were absolutely invited to ask questions that, that be directed over to them at this meeting. Uh, I don't think, uh, yeah, this, this format will not be around forever and if it's better to get them up on the stage, where we'll be happy to do it. Ted and Todd, uh, they're basically not going to answer investment questions. We, we regard investment decisions as proprietary, basically. They belong to Berkshire. And, uh, we are not an investment advisory organization. Uh, so it, that, that is counter to the interests of Berkshire for them to be talking about securities they own. It's counter to the interest of Berkshire for Charlie or me to, to be doing it. We've done better because we don't publish every day what we're buying and selling. I mean, it's, it's, it's, uh, if somebody's working on a new product at Apple or somebody's working at a on a new drug or they're assembling property or something of the sort, they do not go out and tell everybody in the world exactly what they're doing every day, and we're trying to generate ideas and investment and we, we do not believe in telling the world what we, what we're doing every day except to the extent that we're legally required. But it's a good idea.
Charlie? Well, one of the reasons we have trouble with these questions is because we're Berkshire is so very peculiar. There's only one thing like it. We have a different kind of unbureaucratic way of making decisions. There aren't any people in headquarters. Uh, we don't have endless committees deliberating forever and making bad decisions. We just, we're radically different and it's awkward being so different and, but I don't want to be like everybody else because this has worked better. So, I think you're just going to have to endure us. We, we do think that it's a huge corporate asset which may only surface very occasionally and depending very much on how the world is around us. But to be the one place, I think, in the world almost where, uh, uh, somebody can call on a Saturday morning and, and meet on Sunday morning and have a $10 billion commitment and nobody in the world doubts whether that commitment will be upheld and it's not subject to any kind of, uh, welching on the part of the company that's doing it. It's got nothing involved other than Berkshire's word and, and that's an asset that every now and then will be worth, uh, a lot of money to Berkshire and I don't really think it will be subject to competition.
Uh, so, uh, and Ted and Todd, in particular, uh, are an additional pipeline and have proven to be an additional pipeline in terms of, uh, facilitating, uh, the exercise of that ability. I mean, they, they things come in through them that for one reason or another, uh, I might not hear about otherwise. So, they've, they have expanded our universe. In the markets we've had in recent years, that hasn't been important. I can see periods where they would be enormously valuable. Just take the question that was raised by the fellow from Winnipeg about weak covenants in bonds. I mean, we, we could have a situation, who knows when, who knows where, who knows whether, but we could have a situation where it could be massive defaults in, uh, the junk bond type market. We've had those a couple times and we made a fair amount of money off of them, but Ted and Todd would multiply our effectiveness in a big way if such a period comes along or some other types of periods come along. They are, they're, they're, they're very, very, very useful, uh, to Berkshire. Uh, uh, the call happened to come in on Friday from Brian Moynihan of, of CEO of Bank of America and he's done an incredible job, but, but we have, we have, we have a better chance of, of, uh, getting more calls and having them properly filtered and everything appropriately filtered, uh, the next time conditions get chaotic, uh, than we did last time and that's, that's important.
Try it. Well, I do think it's true that if the world goes to hell in a hand bucket handbasket, that you, you people will be in the right company. We've got a lot of cash and we know how to behave well in a panic. Uh, and if the world doesn't go to hell, are things so bad now? And I also want to report that your vice chairman is getting new social distinction. I've been invited during this gathering to go to a happy hour put on by the Bitcoin people. And I tried to figure out what the Bitcoin people do in their happy hour and I finally figured it out. They celebrate the life and work of Judas Iscariot. Is your invitation still good?