"(clinking)" "Woman:" "Andnowoneofthemost respected investors in America isgoingto tellyou  abouthissecrets." "(clinking fades) (clock ticking)" "Man:" ""WarrenBuffett." It'sthesoundofmoney." "$9.2billion..." "Woman 2:" "Billionaire investor Warren Buffett, the second richest man in America." "Man 2:" "He'sestimated to be worth about $62 billion." "That makes him the richest man in the world." "♪ ♪" "Woman 3:" "You know, Buffettisnotexactly whatyoumightexpect." "Woman 4:" "Eventhough he'sinthemoneybusiness, hedoesn'tevenown  acalculatoror acomputer." "Man 3:" "Hetakesthelongview , andit'smadehim billions, manybillions." "Man 4:" "Maybeyoucanbeatthehouse , but I don't think you can beat Warren Buffett." "Man 5:" "Buffettfiledhisfirst taxreturnat 13 yearsold ." "(man6 laughs) Buthe'sno average billionaire,Tom." "Tom:" "No, he certainly isn't, Matt." "Woman 5:" "He'sa $ 44billion averageJoe." "Man 7:" "WarrenBuffett hasanapproach that doesn't make him very popular with his fellow billionaires." "Man 8:" "WarrenBuffett, theboyfromNebraska whogrewup to become theWizardof Omaha." "Man 9:" "Whatwasit abouthim  thatallowedhimtobecome the richest man in the world?" "How did he do it?" "♪ ♪" "(birds chirping) (traffic sounds)" "Warren:" "70 years ago, I was in high school." "Almost a third as long as the country has been around." "(school bell rings)" "And when I was in high school," "I really only had two things on my mind... girls and cars." "(all laugh)" "And-- and I wasn't doing very well with girls, so we'll talk about cars." "But lets just imagine that when we finish," "I'm going to let each one of you pick out the car of your choice." "Sounds good, doesn't it?" "Pick it out, any color, you name it, it'll be tied up with a bow, and it'll be at your house tomorrow." "Andyousay, "Well,what'sthecatch?"" "Andthecatchis... thatit'stheonlycar you'regoingto get inyourlifetime." "Now what are you going to do, knowing that that's the only car you're ever going to have and you love that car?" "You'regoing totakecareofit likeyoucannotbelieve." "NowwhatI'dliketosuggest isthatyou'renot going togetonlyone car  inyourlifetime, but you're gonna get one body and one mind, and that's all you're going to get." "And that body and mind feels terrific now, butithas tolastyoualifetime." "I'montheway  totheoffice." "It'sall ofa five-minutedrive." "Been doing it... for 54 years." "One of the good things about this five-minute drive is that on the way there's a McDonald's, so I'll pick up something." "Woman on speaker:" "Good morning, thank you for choosing McDonald's." "Go ahead and order whenever you're ready." "I'll have a Sausage McMuffin with egg and cheese." "Woman:" "Anything else?" "That's it, thank you." "Warren:" "Yeah,andItellmywife asI shavein themorning," "I say either $2.61, $2.95, or $3.17, (coins clinking) and she puts that amount in a little cup by me here and that determines which of three breakfasts I get." "Hi. 2.95." "Okay, 2.95." "There's the two." "How you doing, sir!" "Hey, great!" "You're on "Candid Camera"!" "I see." "Hello, everybody!" "(both laugh)" "Warren:" "WhenI 'mnotfeeling quitesoprosperous," "I might go with a 2.61, which is two sausage patties, and then I put 'em together and pour myself a Coke." "(beeping)" "Hi, how are you?" "Hi." "I've been good." "3.17isabacon,egg,  andcheesebiscuit, but the market's down this morning, so I think I'll pass up the 3.17 and go with the 2.95." "♪ ♪" "(faucet running)" "Warren:" "Ilikenumbers." "Itstartedbefore Icouldremember." "(clicks, ticking)" "Itjustfeltgood, workingwithnumbers." "Iwasalwaysplayingaround withnumbersin one-way oranother." "And it was fun to have a bunch of guys over and have them betting on which marble would reach the drain first." "(clicks)" "Ihadalot  ofenergyas akid ." "(laughs)" "I" "I wasinquisitive, andI wastheyoungestone alwaysintheclass, 'causeI 'dskip." "I've always been competitive." "(kids playing)" "Ilikedto read morethanmostkids." "Ireallylike toreadalot ." "My Aunt Edie gave me a copy of "The World Almanac"" "andthatwasheaventome ." "AndI canstilltellyou thatOmaha'spopulation was214,006in 1930." "Some numbers just kind of stick with you." "Andveryearly, probablywhenIwas  sevenorso ," "Itookthisbookout oftheBensonLibrary called" AThousandWays toMakea$ 1,000."" "Andoneof theways inthisbook washaving pennyweighingmachines." "AndI satandcalculated howmuchit wouldcost tobuythefirst weighingmachine, andthenhowlong itwouldtakefor the profit fromthatone tobuyanotherone , andI wouldsitthere andcreatethese compoundinteresttables" "to figure out how long it would take me to have a weighing machine for every person in the world." "(thunks, clatters)" "Ihadeverybody inthecountryweighing themselvestentimesaday,  andmejustsittingthere likeJohnD. Rockefeller ofweighingmachines." "(chuckles)" "Theallowance whenI wasalittleboy wasa nickelaweek, but I liked the idea of having a little more than a nickel a week to work with, andI went intobusinessveryearly." "I started selling Coca-Cola door to door." "Isoldgumdoortodoor." "Isold "SaturdayEveningPost,"" ""Liberty"magazine, "LadiesHomeJournal," younameit ." "IthinkIenjoyedthegame almostrightfromthe start." "But I like being my own boss." "That'sonethingIliked aboutdeliveringpapers." "Icouldarrange therouteIwanted." "Nobody was bothering me at 5:00 or 6:00 in the morning." "(bicycle bell chimes) Iwasdelivering 500papersaday , and I made a penny a paper, but in terms of compounding, that penny's turned into something else." "♪ ♪" "(scraping)" "Einstein is reputed to have said that "Compound interest is the eighth wonder of the world" or something like that, and it goes back to that story you probably learned when you were in grade school wheresomebodydid somethingfortheking," "andthekingsaid, "WhatcanIdoforyou?"" "And he said, "Well, lets take a chessboard" ""andputonekernelofwheat  onthefirstsquare" ""andthendoubleit onthesecond anddoubleit on thethird."" "And the king readily agreed to it, and by the time he figured out what two to the 64th amounted to, he was giving away the entire kingdom." "Soit'sapretty simpleconcept, butovertime, itaccomplishes extraordinarythings." "(elevator beeping)" "(elevator dings, doors open)" "Berkshire is an amazing company." "Fourth largest company in the "Fortune" 500." "Heistheonlyperson whohasever,fromscratch, builta company thatisin thetop 10 oftheFortune500 ." "(microwave opens, closes)" "(beeps, humming) (phone rings)" "Woman:" "Berkshire Hathaway." "Fine, thank you." "Warren:" "Well,Berkshireis  aholdingcompanyofsorts." "Itownsalargenumber ofseparatebusinesses thatoperate independentlyofeachother and,toagreatextent, fromtheparentcompany, BerkshireHathaway." "(man speaks indistinctly on TV)" "All right, well, we're going to get more from you in a second." "Warren:" "Sowehavemaybe70, maybe80businesses, andweaskthem tobehavein away  thatdoesn'thurt ourreputation at Berkshire Hathaway, but they run their own lives." "Other people do most of the decorating in the office, so various things come in." "Originally, when I moved in in 1962... you can see this" "I went down to the South Omaha Library, and I think for a dollar, I got seven copies of old "New York Times"" "from big times like the Panic of 1907." "This is one-- 1929 obviously." "But I wanted to put on the walls days of extreme panic in Wall Street, just as a reminder that anything can happen in this world." "I mean it-- it's instructive art you can call it." "♪ ♪" "Iwasbornin1930  hereinOmaha,Nebraska, during the stock market crash." "My dad lost his job in 1931, a year after I was born." "Hewasastocksalesman, and he had what little savings he had in the bank, andsohe started hisowncompany." "He worked right through the depression." "♪ ♪" "Bertie Buffett:" "Hehadan investmentcompany, and as an adult when I looked back," "I thought, "Wow, did that ever take a lot of nerve."" "Sometimeswe'd godownthereonSunday, andwecouldplay withtheaddingmachine." "MybrotherandItended toplaythegamestogether." "AndI remember atonepointhesaid tome ," ""I'm going to be a millionaire by the time I'm..." "30," or something like that." "Itwastotally outsideofanything myfamilyhadexperienced, buthejustwas  unusualthatway." "Doris Buffett:" "Well,I wastheoldest, andthenmy brother andthenmy sister." "And my father would go to New York periodically to check on businesses, stocks, and things like that, andhe'dcomeback, he'dalwayshaveacostume foreachof us , andWarrenlovedit." "Hewasverygood-natured." "Hewasquiet." "It was hard to tell he was a genius at that point, butI mean, whowaslooking?" "(clock ticking)" "Warren:" "Thefirstbooks Ireadon investment wereactually inmydad'soffice." "(clock chiming)" "Prettysoon,Iread allthebooksintheoffice andreadsomeofthem  morethanonce." "Mydadhad variousnicknamesforme." "He'dcallme  "Fireball"sometimes, becauseI 'dstart littlebusinesses." "Hedidn'tcare aboutmoneyat all." "Hebelievedverymuch inhavingan innerscorecard and never worry about what other people are thinking about you." "You know, just-- just-- if you know why you're doing what you're doing, that's good enough." "Iadmiredeverything abouthimto theextent thatI wasabsorbinglessons fromhimwithoutknowingit." "And the idea that all lives have equal value is something that allthreeof hischildren feltsinceIcan remember." "(patriotic music playing)" "Mydadat onepoint ranforcongress whenI was12 or so ." "Itwas averyrepublicanhousehold." "I campaigned for him." "My sisters campaigned for him." "Thewholefamilydid ." "My mother was very, very bright, and she was very gregarious." "She was a good campaigner for my dad." "Bertie:" "Shehadalot ofambition, andI think mybrotherWarrengot alot of his extreme competitiveness from my mother, actually." "Doris:" "Shewasbrilliantatmath ." "You know, I guess they still had these things where you crank them and things added up, and she could add it in her head faster than the machine could do it." "Shewas absolutelyamazingin that." "Warren:" "Shewasverydutiful about taking care of the kids, but you didn't get the same feeling of-- of love." "It was there, but it just-- it didn't come out the same way as with my dad." "Howard Buffett, Sr. on radio:" "In the nation, the only permanent way to prosperity is a balanced budget." "Unless that goal is achieved, all post-war plans will collapse like Hitler's conquest." "Man on radio:" "You have heard Congressman Howard L.H. Buffett, a Republican member of the House of Representatives from Nebraska speaking on the" "Warren:" "WhenI wasabout12or13 , we moved to Washington, my family, and I was mad." "I was having fun in Omaha, and I lost all my friends, and now I moved to a town where they were all strange, and so I was very, very unhappy." "♪ ♪" "Atschool, Ijustlostinterest." "Itookpleasure intormentingmy teachers." "Atthattimefor example, ATTwasthestock thatallteachersowned fortheirretirement, andI decided thatitwoulddrive myteachersalittlecrazy if I went and short the stock, because when you go short a stock," "you're betting that it will go down." "(school bell rings)" "SoI shorted 10sharesof ATT," "(chuckling) andthenbrought theconfirmationto school andshowedtheseteachers Iwasshortingthe stock." "Theyfoundme  abigpainintheneck,  buttheydidthinkIknew alotaboutstocks." "♪ ♪" "Andthenat home, mymotherwouldhave terrificheadaches, and you didn't want to be around her when she was having the headaches, and she would-- she would lash out more." "She would never do it in public." "Doris:" "Well,I think wewereterrifiedofher." "♪ ♪" "WhenI 'dwakeup  inthemorning," "I'd listen to hear her voice." "I could tell by her voice if it was going to be a terrible day or not." "Warren:" "Whenshegotdifficult, thethreechildrenfeltit." "WhenI wasat thelow point, sortof,Idecidedthat  Iwouldrunaway." "SoI talkedtwootherguys  intorunningawaywithme." "Wewentout, andwestarthitchhiking... andthenwe gotpickedup bythehighwaypatrol andthatscared thehelloutofus." "(police radio chatter)" "It'sveryinteresting." "Mydadneverreallygave me hellaboutdoingthis, but he finally said, "You know,"" "he said, "you can do better than this."" "And just saying that, I mean, I" "I felt like I was letting him down, basically." "So in all ways, he was teaching me." "Never taught by telling me things, he just taught by example." "He had unlimited confidence in me, even when I screwed up, and that takes you a long, long way." "Thebestgift Iwasevergiven wastohavethe father thatI hadwhenIwasborn." "I didn't want to go to college." "I was 16 when I got out of high school andI wasbuyingstocks." "Imean, Iactuallywashaving aprettygoodtime and I didn't see that really was much to be gained by going to college, but my dad kind of jollied me into it." "♪ ♪" "Doris:" "Hehadaroommate whowasafriendofmine,  and the roommate said it would just drive him crazy, becausehestudied allthetime, and Warren would come in 15 minutes before the exam and just ace his way through it." "Warren:" "Ifinishedin threeyears, 'causeI hadenoughcredits, and I was in a hurry." "I wanted to get out." "(birds chirping)" "Warren:" "WhenI gotout of the University of Nebraska," "I applied to Harvard Business school." "They told me I was to get interviewed in a place near Chicago." "I got there, and he interviewed me for about 10 minutes, and he said, "Forget it."" "(laughs) "You're not going to Harvard."" "And so now I'm thinking, "What do I tell my dad?" "Oh, this is terrible." And it turned out to be the best thing that ever happened to me." "Laterthatsummer," "Iwaslooking througha catalog and in the catalog, it had these names of people that were teaching, and one was Graham and another was Dodd." "I had read this book by the two of them, so I wrote him a letter in mid-August, and I said, "Dear Professor Dodd,"" "I said, "I thought you guys were dead."" "(students laugh) "But, now that I found out that you're alive and teaching at Columbia, I would really like to come."" "And he admitted me." "So, you know what?" "That-- it just shows, you never can tell." "♪ ♪" "Man:" "Gentlemen, Professor Graham." "Warren:" "Ben was this incredible teacher." "I mean he-- he was a natural, and he drew us all in." "Are Wall Street professionals-- they more accurate in the shorter term than the long term forecast?" "Well, our studies indicate that you have your choice between tossing coins... and taking the consensus of expert opinions, and the results are just about the same in each case." "(people laugh)" "Warren:" "It was like learning baseball froma fellow who'sbatting.400." "(laughs)" "Itreally--it shaped myprofessionallife." "There are two rules of investing according to Warren, and he learned this from Ben Graham." "♪ ♪ (clicking)" "Rule number one, never lose money." "Rule number two, never forget rule number one." "Ben Graham basically coined the term "value investing."" "Hebelieved incarefulscrutiny ofa company's financialstatements, and that if you bought value, it would eventually prove out." "A few years ago, I went to Amazon, and sure enough, they had this manual there, so while reliving my youth-- other guys were going to Amazon and probably buying old "Playboys" or something," "but I bought old Moody's manuals instead, and when I got out of school, I started selling stocks," "(chuckles) I was 20 years old at the time, looked about 16, and acted about 12, so I was not the most impressive salesperson anybody ever met." "But what I would do was I went through, page by page, looking for possibly undervalued stocks." "Peter Kunhardt:" "Is this like going through an old family album?" "Better!" "(both laugh)" "♪ ♪" "WhenI gotout ofbusinessschool atColumbia," "Ideveloped prettydecentskills intermsof business, butI hadn't reallycometo terms withtheworldexactly." "Kunhardt:" "What were you like around girls back then?" "Bad." "I was-- I was sort of out of the swing of things there for a while." "Iwentto my 60threunion, andtherewasagirl there." "I took her out one time to the Uptown Theater in Washington, and I asked her whether she remembered what movie we saw, and she said, "No, I don't remember that."" "And then she said, "But I do remember one thing."" "And like an idiot, I said, "What was that?"" "And she said, "Well, you picked me up in a hearse."" "Anditwastrue thatI owned ahalf-interestin ahearse whileI wasin highschool, which was not the smoothest thing that-- or coolest, as they would say now-- that you could-- you could do on a date." "Therewere twoturningpoints inmylife." "Oncewhen Icameoutofthewomb,  andoncewhenImet Susie,basically." "(laughs)" "♪ ♪" "Shewasthegirl,yep." "Butittookher  alittlelonger tofigureout Iwastheboy ." "(laughs)" "Susie Buffett:" "Iwasgoingtobe his youngest sister's roommate at Northwestern." "So I walk into their house, he was sitting in this chair, andhemade somesarcasticquip." "So I made one back." "I thought, "Who is this jerk?"" "♪ ♪" "And that's how we met, yes." "Listen, Warren is smarter than you even know." "Hisbrainis going allthetime." "Andmydadsaidtome ," ""Nowyouhave tounderstandabouthim" ""you'renotgoingtohave  discussionswithhim" ""likeyouwould mostnormalpeople, buthehas aheartof gold."" "He was just totally enamored of her, and why not?" "And she of him." "She'd sit on his lap all the time, and he'd stroke her hair." "Itwassofteninghim ." "Susiewas reallykind,considerate, and she was the balancing force." "Warren:" "I just got very, very, very lucky." "But I was a lopsided person, and it took a while, but she just stood there with a little watering can and just nourished me along and-- and changed me." "♪ ♪" "Somebody once said that the chains of habit are too light to be felt until they're too heavy to be broken." "Ihadbeenterrified ofpublicspeaking." "Icouldn'tdo it ." "I'dthrowup ." "And I knew if I didn't cure it then, I'd never cure it." "♪ ♪" "And so I saw an ad in the paper for the Dale Carnegie Course, whichworked ondevelopingyourability tospeakin public, and I went down there." "Dale Carnegie:" "Be sincere." "A good smile has the same effect as a puppy's tail." "When a puppy wags" "Warren:" "Theymadeus do  allthesecrazythings togetoutofourselves, andsowe stoodontables anddidallkindsofthings." "(indistinct chatter)" "(applause)" "Warren:" "IfI hadn'thaddonethat ... mywholelife wouldhavebeendifferent." "Soinmy office youwillnotsee  thedegreeIgot  fromtheUniversity ofNebraska." "Youwillnotsee  theMastersdegreeIgot fromColumbiaUniversity, butyou'llsee thelittleawardcertificate" "I got from the Dale Carnegie Course." "As a matter of fact, every week, the instructor would give a pencil to whoever had done the most with what we'd learned the week before." "And so in the fourth or fifth week," "I proposed to her mother, and she said yes." "And so that week," "I won the pencil, I also got engaged, and it was an incredible week." "(all laugh)" "♪ ♪" "Warren:" "Theweddingdate waskindof interesting, becauseI couldn'tsee anythingwithoutmy glasses, andI was sonervousthatI" "Ijustdecided totakeoffmyglasses and I wouldn't be able to see all those people out there." "♪ ♪" "Shewas19  whenwegotmarried andI was21 ... butshewassomuch  morematurethanIwas." "Therewasno comparison." "She was a better person than I was... but when you get married, it's not a question of saying," ""I'm going to put a 14% factor in for humor, and 17% for intellect, and 22% for looks."" "It doesn't work that way." "Iknewit was therightdecision, and--andit was." "(bells tolling)" "Woman:" "You could live anywhere in the world." "Why do you choose Omaha, Nebraska?" "Yeah, I love it, and I-- you know, I was... born about a mile from here and, you know," "I've never had a bad experience in Omaha." "♪ ♪" "Well,OmahaandNebraska arehometo me ." "Everythingaboutit  seemslikehome." "It'sa pace, it'srelationships." "There's a lot of continuity." "There's a lot of community." "There's a lot of friendship." "It'sa verysolidplace andfriendlyplace in which to grow up in, in which to conduct a business." "WhenI cameback toOmahain early1956," "Ihadno idea whatI wasgoingtodo." "A few months after I came back, some members of the family said," ""What should we do with our money?"" "And I said, "Well, I'm not going back" ""in the business of selling stocks, but if you would like to join me in a partnership,"" "I said, "I'll be glad to do it."" "So within a couple of months after coming back," "I set up the first partnership." "♪ ♪ (ticking)" "Iwrote allthechecksindividually." "Ifiled 11income-taxreturns." "Itookdelivery onstocksforall these differentcompanies." "I" "I was aone-manbandthere forsixyears." "Sandy Gottesman:" "Warrenwouldsitupstairs inhislittleofficethere, and I would bring up the name of a company, and most of the time he knew much more than I did about the company." "He'd know how many shares were outstanding." "He'd know the capitalization." "He'd know the earnings." "It was absolutely incredible." "Imeanwhen Warrensaidsomething, itmeantaheckofalot,  andI thinkallofuspaid alotof attentiontoWarren whenhetook adefinitestand onsomething." "Charlie Munger:" "WhenI firstmetWarren backin1959," "I recognized immediately that he was a very intelligent person." "For the last four or five years, the stock market has been booming along and presumably forecasting better business, which has really not materialized, so maybe the stock market is really correcting a previous incorrect forecast this time" "rather than making a new correct one." "He made a lot of money buying thinly traded securities that were incredibly cheap statistically." "♪ ♪ (lighterflicks)" "(cigarsizzles)" "Loomis:" "Warrenwas,at thattime, dealing with small companies, and his investments often were to buy a company thatyoucouldfigurewas adiscardedcigarbutt, but it had one more smoke in it, andhewanted tobuyat therighttime" "tobeabletobenefit fromtheonesmoke." "The first partnership started with $105,100." "I put up the 100, and the other people put up the 105,000." "And then at the start of 1962, I moved to Kiewit Plaza." "AndbythetimeImoved  toKiewitPlaza, we had $7 million invested, anda fairamount wasprofits." "♪ ♪ (birds chirping)" "Iwasthenrentingahouse ." "Ineverownedahouse tothatpoint." "Andthentwoyearslater," "Iboughtthehouse Ilivein todayin1958 ." "Wehadthreechildren, SusieandI." "And we had 'em young, incidentally, whichwasIthinkwas averygoodthing." "♪ ♪" "MydaughterSusie wasbornhere." "InamedherSusie justlikethat,assoon  asI lookedat her, becauseshelooked justlikehermother," "♪ ♪" "Andshewasacinch." "AndthenHowiewas , youknow,thisabsolute bundleofenergy... whichmadethings verydifficult forbigSusie fora while." "Peteragainrevertedback toSusie'spersonality, andhewasaneasy child." "Howard Buffett:" "Well,I woulddescribe mychildhoodas normal, butwhoknows whatnormalis ?" "Peopleoftenthink," ""Well, Warren Buffett was this famous rich guy."" "He was not famous, and he wasn't rich when we were growing up." "♪ ♪" "What I saw first and foremost, day in and day out, was consistency." "Everydaywe hear thegaragedoorclose inthehouse and then like clockwork, my dad would come in the door," ""I'm home!" and we'd all eat dinner together, which I think surprises a lot of people." "Susie Buffett, Jr.:" "Mydad,he usedtorock me tosleepat night andsing"Overthe Rainbow," soI have this insanely sentimental attachment to that song." "I've always had a really close relationship with him." "♪ ♪" "Warren:" "I'vegotthree verydifferentkids, andthey'vegot acommonheart, whichtheygot fromtheirmother." "Shedidmost oftheworkbyfar ofbringingup  thechildren, which is probably a good thing." "(laughs) They have more of her qualities than mine, which I would-- I would recommend." "Howard:" "Well,mymomwas  thebiggestpart ofmylifegrowingup... even though I got disciplined on a regular basis and she was usually the one doing it, shewasstill mybestfriend." "Shewassomebody whowouldhelpanybody," "I mean, whether she knew 'em or didn't know 'em or maybe even didn't agree with them, she would still help them." "Warren:" "She was incredibly empathetic, and she was interested in every person individually." "Shenevercaredaboutmoney orbusinessat all." "Susie:" "Imeanhe would goaroundsaying," ""I'mgoingto be  therichestman intheworld."" "And I think, well, it's like somebody says," ""I play music, and I'm gonna be Mozart."" "I don't know." "How does anyone know..." "How does anyone know?" "You know?" "So that was okay." "I don't really care about that." "Loomis:" "Iwouldsay thatSusieledWarren towardchanging hispoliticalviews." "He grew up as a young Republican, his father was a Republican congressman, butSusiesawthings indifferentways." "Shewasthecatalyst." "(crowd chanting) Freedom, freedom, freedom!" "(man shouts) Louder, louder, louder, louder, louder!" "Freedom, freedom..." "(man shouts) What do we want now?" "Susie:" "Whenthechildren weregrowingup ," "Iwasveryinvolved incivilrights." "I was immersed in it, and I think that's what made Warren a Democrat." "Hewouldgo withme tohearspeakers." "(applause, cheers)" "Warren:" "Irememberthatspeech that Martin Luther King gave." "That was one of the most inspiring speeches I" " I've ever heard." "I come to say to you this afternoon..." "Warren:" "Took me right out of my seat." "Mywifewaswithme." "Webothhad thesameexperience." "Martin Luther King:" "It will not be long." "It was interesting, he-- in that speech, he talked about truth forever on the scaffold, long forever on the throne, but that scaffold sways the future." "Well,hewasgoing tobedeadinsixmonths, but that scaffold did sway the future." "Mywifewas moreactivethanIwas,  butI was100% withhermentally." "I was just working a little more on my own investments." "But it didn't make a difference what we were gonna do withthemoney afterwemadeit." "I thought I would pile it up over the years thenshewouldunpileit intermsof runninga--  oneverylargefoundation." "And I was particularly good at compounding money, and therefore society would benefit by waiting." "♪ ♪" "Iwasgeneticallyblessed withcertainwiring that'sveryuseful ina highly-developed marketsystem wherethere'slots ofchipson thetable, andyouknow,Ihappen tobegoodatthat game ." "(scratching)" "Ted Williams wrote a book called "The Science of Hitting,"" "and in it he had a picture of himself at bat andthestrikezonebroken into,I think,77 squares." "And he said, if he waited for the pitch that was really in his sweet spot, he would bat .400 andifhe had toswingat something onthelowercorner, hewould probablybat.235." "Andininvesting, I'minano-called strikebusiness, whichisthebestbusiness youcanbe in ." "Icanlook ata thousand differentcompanies, andI don'thave toberightoneveryone ofthemor even50of'em... soI canpickthe ball Iwantto hit." "(baseball bat cracks) (crowd cheering)" "And the trick in investing is just to sit there and watch pitch after pitch to go by and wait for the one right in your sweet spot." "And the people that are yelling, "Swing, you bum"?" "Ignore 'em." "There's a temptation for people to act far too frequently in stocks, simply because they're so liquid." "Over the years you develop a lot of filters, and I do know what I call my circle of competence, so I-I" " I stay within that circle, and I don't worry about things that are outside that circle." "Definingwhatyourgameis, where you're going to have an edge is enormously important." "(film projector clicking, beeping)" "♪ ♪" "Iboughtthefirstshares ofBerkshirein 1962, anditwas anortherntextilebusiness destinedtobecome extincteventually, and it was a statistically cheap stock in a terrible business." "BerkshireHathaway wasclosingmills and as they closed mills, it would free up some capital, and then they would repurchase shares, soI bought somestockwiththe idea thattherewouldbe anothertenderoffer atsomepoint," "andwewouldsellthestock  ata modestprofit." "Andatonepoint, themanagement askedmeat whatprice wewouldtenderour stock, andI said,"$ 11.50."" "♪ ♪" "Andthetenderoffer cameoutafew monthslater, anditwas at$ 11and3/ 8ths, whichwasan eighth ofa pointcheaper." "Andthatmademevery mad,  soI juststarted buyingmorestock." "(laughs)" "I just felt that I'd been double-crossed by the management." "And in May of 1965," "I bought enough so we controlled the company, andwechanged themanagement." "It was a pretty silly way to behave, as Warren has recounted in retrospect." "Oneofthereasons Warrenissuccessful ishe'sbrutal inappraisinghisown past." "He wants to identify misthinkings and avoid them in the future, butitwas anaccidentthathechose BerkshireHathaway." "If the chairman hadn't tried to cheat him out of an eighth, there wouldn't have been any Buffett- Berkshire Hathaway history." "Warren:" "If you're emotionalaboutinvestment, you'renotgoingtodowell." "You may have all these feelings about the stock." "(chuckles) The stock has no feelings about you." "Lookingback, it'sinteresting, thattenderoffer" "I didn't realize it, but it-- it happened about five days after my dad had died and whether that had affected me or not, I don't know." "♪ ♪" "Kunhardt:" "Do you remember your last conversation with your father?" "Yeah, but I don't want to talk about it." "Munger:" "Ithinkit justsoberedhim andhurthim, but..." "Warren soldiers on." "Both Warren and I could look at our fathers and see what they did right and what they did wrong." "Warren'sfatherwas arealold-fashioned right-wingideologue." "Andhisfatherwas  sointenseaboutit,  thatWarrenjustdecided thatitwasmistake-- it cabbaged up your head to be that much an ideologue, so he loved his father, but he didn't want to become" "that much of a true believer in-- in anything." "My politics became more overt after my dad died." "♪ ♪" "Civilrights changedmyviews." "Youknow,in 1776 ThomasJeffersonwrote," ""Allmenarecreatedequal," andthenwhentheywrote theConstitution, they all of a sudden decided that, no, it was just 3/5ths of a person if you were black." "I mean, that struck me as kind of crazy." "♪ ♪" "Susie:" "Iwastalkingtohimoneday aboutsomeracialissue, andhesaidtome, "Waittillwomendiscover they're the slaves of the world."" "Now how many men were cognizant of that, and even women then?" "Warren:" "Theinitialexample isreallymy mother." "Shecamefromageneration wherethemainfunction ofthewife was to help her husband in the job." "Andmysistersare  fullyassmartasI am ." "They got better personalities than I had, buttheygotthe message amilliondifferentways thattheirfuture waslimited, and I got the message that the sky is the limit anditwasn'tdue  toa lackof love oranythingof thesort." "Itjust-- itwastheculture." "Ontheotherhand, youcanlook at the flip side of that and say it's quite encouraging, because if you look at what this country accomplished only using half of its talent, just think of the potential for the future." "I'm enormously bullish on America over the future andpartof thereason isthatwe , bysomerather stupiddecisions, essentially put half our talent on the sidelines." "Loomis:" "Warren is probably themostrationalperson I'veevermet." "Charlie Munger would be a close rival." "AndCharliebecameaman thatWarren dependedonheavily and I think his first experiences in the discarded- cigar-butt era convinced him that it was not exactly where he wanted to be." "Munger:" "Hemadeso muchmoney forsolong doingwhathe 'dbeentaught byBenGraham, whichhe'dbuy theseverycheapstocks." "If they were cheap enough, he didn't care it was a lousy company and a lousy management." "He knew he was going to make money anyway, just because of the cheapness." "Warren:" "CharlieMungerhashad  abigimpactonme in moving me toward looking for wonderful companies at fair prices rather than fair companies at wonderful prices." "That was enormously important, because it enabled Berkshire to scale up in a way thatwould havebeenimpossible todootherwise." "Yep?" "Man:" "What are the key indicators you'd look for within companies before making an investment?" "Well, I look for something that does give them a moat around it." "♪ ♪ (water sloshing)" "Wehaveacompany calledSee'sCandies outonthewestcoast." "See'sCandies BoxedChocolates." "Ifyougiveabox ofSee'schocolates toyourgirlfriend onthefirstdate andshekissesyou ?" "(giggles, kisses)" "We own you." "You know?" "I mean we-- we can raise the price tomorrow." "I mean, you'll buy the same box." "You'renotgonna foolaroundwithsuccess, sothekeythere istheresponse." "Youdonotwanttogethome onValentine'sDay and say to your wife or your sweetheart-- preferably they're the same person-- you don't say, "Here, honey, I took the low bid."" "It doesn't work." "Price is-- to a degree, is immaterial." "If you've got an economic castle, peoplearegonnacome andwannatakethatcastle awayfromyou." "Youbetterhave astrongmoat." "Youbetterhave aknightin thecastle thatknowswhathe'sdoing." "You're not buying an asset, you're buying a name, you're buying a brand, you're buying a real franchise here, and Charlie was more responsible for that than anybody." "♪ ♪" "Warren:" "Wewerementalpartners right from the moment we met." "Woman:" "I wanna know, goingback50 years, what it was like when you first met Warren." "Well, I thought he was a prodigy... and I got a lot of criticism." "My wife said, "Why are you paying such enormous respect" ""to that young man with a crew cut who won't eat vegetables?" (all laugh)" "Warren:" "He'sungodlysmart." "He'sgotamuchbroader intellectthanIdo,  and he's magnificent at being able to condense important ideas into just a very few words." "If you're not interested in the economic scene right now, you're mentally dead." "Charlie has no tact." "Woman:" "All right, let's talk a little bit about bankers." "Charlie, on Friday, compared them to heroin addicts." "Yeah, well, that's colorful Charlie, butI wouldnot havechosenthat." "Loomis:" "Ioncewroteofhim that when they handed out humility, he didn't get his fair share." "The ideal way to run a headquarters is to have one man, preferablyover80 , sittinginan office byhimself." "Anything else is pure frippery." "Warren:" "He'salwayshonest inwhathe tellsme,  soI" "Ilistentohim." "Munger:" "Weneverhadanargument." "We just..." "We just kinda roll with it easily." "Suppose Warren doesn't wanna do something that I would've done, and suppose that happens four times over 40 years or something." "What the hell difference does it make to me?" "♪ ♪" "Net,therecordis workingoutis fine." "Both of us know that we've done better by having ethics." "Warren'snotinterested inmakingmoney bycheatingpeople." "(chattering) (phone ringing)" "Loomis:" "Warren'sopinions ofWallStreet investmentbankers would not endear him to their mothers." "Hefeelsthatthey're, forthemostpart, notoutfortheirclients." "They're out for their own business interests." "Warren:" "In the late 1960s, there were just a flood ofaccounting shenanigansandmergers builtuponfalseaccounting andmisleadingpeople." "It was a time when a lot of charlatans were prevailing in Wall Street and were being applauded by Wall Street." "Iunderstoodwhat thegamewasabout, butI didn'twant toplayin it , soI closeddown thepartnership attheendof1969 , andI tookon  thetitleof Chairman forBerkshireHathaway." "♪ ♪" "Munger:" "Well, I think themodernBerkshire is pretty much all a reflection of Warren." "♪ ♪" "Ihaveconstructed abusinessthatfitsme." "It's kind of crazy to spend your life painting if you're painting a subject you don't want to look at." "I'vegottento paint myownpaintinginbusiness on an unlimited canvas in a way." "It'sa different sortofplace." "Iwork witha greatgroup ofpeople that make my life very easy and that take good care of me." "Come." "Okay." "Wehave25 people intheoffice, andifyougoback , it'stheexactsame25, theexactsameones." "Wedon'thave anycommittees atBerkshire." "We don't have a public relations department." "We don't have investor relations." "We don't have a general council." "We don't have a human relations department." "Wejustdon'tgo foranythingthatpeopledo justasamatterofform." "It's exactly the life I like, andit'snotworktome ." "It'sjustaform ofplay,basically." "(crowd cheers, laughs)" "(clock ticking)" "Oh,I-- Ilikethingsquiet." "(chuckles)" "I shut the door, actually, at the office, 'cause I don't want to hear anybody talking outside." "Woman on TV:" "Broad distinctions between his views and the belt-tightening proposals." "Warren:" "AndI stillprobablyspend fiveorsixhours adayreading." "Woman on TV:" "...look at what's trending today." "Our quick round-up..." "Howard:" "Well,what'samazingis thestuffhe remembers." "It's like a little computer, you know?" "I keep thinking the hard drive will run out of space, but it doesn't." "Melinda Gates:" "He'soneof thesmartest peopleweknow." "So I was at a couple of the family dinners at the Gates house where Mary, Bill's mom, was trying to convince him to come out to the family place at Hood Canal tomeetWarrenBuffett, andhewasresisting" "becausehewas reallybusywithMicrosoft." "And finally he said, "Mom, okay, I'll come for lunch."" "♪ ♪" "Bill Gates:" "So the two of us flew out there somewhat reluctantly, 'cause you know, buying and selling stocks-- which is how I thought of Warren-- wasn't of particular interest to me and didn't seem like value added." "It turned out that was completely wrong." "Weknewthatday that we'dbeveryclosefriends." "In fact, we just couldn't get enough of each other." "♪ ♪" "Warren:" "Shortlyafter ImetBillGates," "Bill'sdadasked eachofus to writedown ona pieceof paper onewordthat wouldbestdescribewhat hadhelpedus themost." "Bill and I, without any collaboration at all, each wrote the word "focus."" "♪ ♪ (scratching)" "Well,focushasalways beena strongpart ofmypersonality." "If I get interested in something, I get really interested." "IfI getinterested ina newsubject, Iwantto readaboutit," "Iwantto talkaboutit, andI wantto meetpeople thatareinvolvedinit." "Bill:" "We both love to work hard." "You know, neither of us likefrivolousthings." "You know he doesn't know much about cooking, or art, or... (chuckles) a huge range of things." "I can't tell you the color of the walls in my bedroom or my living room." "(muffled) We're on a satellite phone." "I don't have a mind that relates to the physical universe well." "Man:" "Warren checking the DOW." "But the business universe I-- I think I understand reasonably well." "Warren's ability to size up people and businesses, it's a pretty magical thing." "He is the best at that, anybody we know." "(laughing)" "We-- we should all try to be 20% as-- as good at that." "Warren:" "Iliketo sitand think, andI spend alotof timedoingthat ." "And sometimes it's pretty unproductive but-- but I find it enjoyable to think about-- particularly about-- about business or investment problems." "They're easy." "It's the human problems that are the tough ones." "Sometimes there aren't any good answers with human problems." "There's-- there's almost always a good answer with money." "(chuckles)" "(clock ticking)" "(clock chiming)" "♪ ♪ (chiming fades)" "Susie:" "Hewassortofa genius." "I think sometimes geniuses are, by default, lonely and isolated." "Hewasnot reallywelladjusted." "He was just this funny" "I mean, humorous guy who maybe had a moat around him, because he was afraid and he didn't know anyone that he wanted to let in." "(faucet runs)" "And to this day, I mean, I don't know..." "Well, nobody knows him like I do, and probably any wife would say that, but... ♪ ♪" "Howard:" "He'sa lonerin asense." "And it's difficult to connect on an emotional level, because I think that that's not his basic mode of operation." "He was there... physically, buthewasupstairs readingallthetime." "I always told my mother we have to talk in sound bytes." "(chuckles)" "I learned that early on, that if you start going into some long thing, unless you've explained to him ahead of time that it's going to be a long thing and you need him to hang in there, you lose him." "You lose him to whatever giant thought he has in his head at the time that he was probably thinking about before you came in andreallywants togetbackto." "♪ ♪" "Peter:" "He'snotlike therestof us ." "Idon'tthink mydadevertook anybodyforgranted, but you are a little bit blind, I think, sometimes to what other people might be doing behind the scenes, andmydad'sgotten alittlebitofa pass ." "♪ ♪" "Susie:" "Warrencan'tfind thelightswitch, andit'sprobablymyfault." "One time, years ago when the kids were little," "I was feeling really sick." "I had the flu, soI laydownonthebed, andI saidto Warren," ""Will you get me a pan?" "Or something from the kitchen." "Imaynotget  tothebathroom." "Ifeelso sick."" "He said, "Okay." So he trottles down to the kitchen, andI hearthisbang, bip,boom,bang!" "And he comes up, and he brings me a colander." "Ilookedat it ,andIsaid , "Look,honey,thishas  holesinit ."" ""Oh, oh, okay." So he ran down, all this banging and everything." "And he comes up and he puts the colander on a cookie sheet." "Physical proximity to Warren doesn't always mean that he's there with you." "♪ ♪" "He'ssocerebral,you see ?" "That's why I learned to have my own life." "We were two parallel lines and-- but very connected when he was open to connecting." "Susie Jr.:" "I did make ajokeat onepoint." "Isaid,youknow, we could make a tape of Mom yelling," ""Bye, Warren, I'll be back later!"" "And then have the door slam, and he would just think she was here." "Idon'tthinkheknew  whatshewasdoing mostofthetime." "♪ ♪" "OnceHowieandI werebothgone, as we've gotten older, she started to see the writing on the wall here andjuststarted tryingtofigureout  howshecould atleasthavesomemore , asshecalledit,  aroomof herown ." "♪ ♪" "Warren:" "Theworstmistakesinvolve not understanding other people as well as you might." "(clock ticking)" "Well, she left Omaha in 1977, and there really isn't much to say about that." "(wind blowing) (rustling)" "It was devastating for him, and I came home, because I-I" " I can't say I was mad at her exactly, but I kept thinking, "How can you leave him?" "He's so-- (laughs) he can't function by himself."" "Somymother-- she'daskedabunch ofherfriends to sort of look in on him, and Astrid was one of them." "Susie:" "SoI calledAstrid." "Isaid,"Astrid," ""willyoutakeWarren-- makehimsomesoup?" ""Go over there and look after him, because he's not gonna make it."" "And it took him a while to figure it out, but he figured it out." "I said, "I'm not leaving you, because I'll be wherever you want me when you want me."" "(gulls cawing)" "Howard:" "My mom moved to San Francisco, and I think one of the reasons it was important for her to leave Omaha was because she just felt like she was kinda trapped in this environment, that everybody knew who she was," "that she couldn't have her own identity." "Peter:" "Heknewthattherewas somethingsheneededtodo and that she really recognized that the money gave us all and her a choice in a lot of ways that a lot of people didn't have." "Munger:" "Therewasatime Warren was getting criticized." "Here was this very, very rich man who was getting richer every year, and really wasn't giving a lot of money away, and there was terrific criticism by some people, whichWarrenneversaid anythingabout." "Warren:" "Thebiggestthing inmakingmoneyistime ." "Youdon'thave tobeparticularlysmart, youjusthavetobepatient." "Susie didn't want to wait as much as I did, but she never quite appreciated compounding like I did." "Susie:" "Thatis adisagreementwe have." "I run a foundation now." "I think we should be giving more money away, butI understand whywedon't-- becauseit's...business." "To me the crux of it is, that it wasn't the money itself." "You can see that in the way he lives." "I mean, he doesn't buy huge paintings or build big houses or anything like that." "It's all mental with him, and the money is his scorecard." "♪ ♪" "Andheusedtosaytome," ""Everybodycanread whatI read." "It'sa levelplayingfield."" "And he loves that, because he's competitive." "And he's sitting there all by himself in his office, reading these things that everybody else can read, but he loves the idea that he's gonna win." "Ha!" "(clinking)" "Munger:" "I'lltellyou howyoudo it ." "Have you ever seen a juggler juggle 25 milk bottles?" "How did he ever get to do that?" "(crowd cheering)" "Theansweris  hestartedwithone bottle, thentwo,thenthree and just kept doing it, and pretty soon he was at 25, and that's the way we did it." "So, basically, we started out with cash andendedup buying abunchof businesses, including insurance companies." "Loomis:" "Insuranceis,in itself, aprofitablebusiness, but it has the additional advantage of creating something that's called "float."" "Floatisthemoney thathangsaroundBerkshire whilea claimis waiting tobepaid." "And Warren turned out to have a extraordinary ability tousethemoney thrownoffby thefloat tobuycompaniesthatfed thegrowthof Berkshire." "Man:" "In1983,Mrs.Bcashedin onherbusiness bysellingcontrol for$ 55million toa companyowned byinvestorWarrenBuffett." "♪ ♪" "Loomis:" "Warrenwasquiteanexpert aboutnewspapers." "Hegotinterested inthe"Post,"" "because he recognized it as a greatly undervalued company." "Kay Graham:" "Hehadto writemea letter." ""Dear Ms. Graham, I've just bought 5% of your company," ""and I mean you no harm," ""andI think it'sa greatcompany." ""Iknowit 'sGrahamowned andGrahamrun, andthat'sfinewithme."" "AndI thought,"Whoa, thisguy'sreallyterrific."" "He used to come to board meetings with about 20 annual reports and he would take me through these annual reports." "It was like going to business school with Warren Buffett." "Kay Graham did introduce Warren to the world of Washington, entirelydifferentgroup thanhehadeverdealt withbefore." "Peter:" "Itwasclear thatworkingwithKay  gave him a different kind of confidence, and he was the star." "Woman:" "Everyonewantsto hear whatWarrenBuffett hastosay." "Man:" "TheOracleof Omaha buildinghisimage andhavingsomefun ." "♪ ♪" "Man 2:" "Berkshireshares haveincreased morethan 2,000%invalue." "Man 3:" "Oneofthelargestmarket capitalizations in the world, anditcouldgrow alotlarger sinceWarrenBuffettshows nosignof slowingdown." "Woman 2:" "Sohowdidhedoit ?" "Byinvesting inwhathe knows andunderstands-- goodold-fashioned Americanbrands likeCoca-Cola," "FruitoftheLoom, andDairyQueen." "What inspired you?" "This inspired me!" "(laughs)" "Buy what you like, is that what it is?" "Yeah absolutely." "♪ ♪" "Today, the Coca-Cola Company will sell almost two billion eight-ounce servings ofoneformoranother ofCocaColaproducts." "Now if you get an extra penny a day, a penny a serving, that's$ 20millionaday , that's$ 7.3billionayear fromonepennymore." "WhenyouownCocaCola , youownalittlepiece ofthemindsofbillions andbillionsof people." "That is really good." "♪ ♪ (clinking)" "Man:" "Who'sgotthemost $100billsthesedays?" "Well,hisname isWarrenBuffett inthiscountry, andhehasjustdisplaced hisfriendBillGates astherichestbusinessman intheworld." "And the purpose of Wednesday's meeting was to discuss" "Buffett's company, Berkshire Hathaway's plan topurchaserailroadgiant BurlingtonNorthern, valuedat$26billion." "Thiswouldbe Buffett's largestacquisitionever." "Munger:" "He's created Berkshire fromvirtuallynothing into hundreds of billions of dollars of market cap." "Nobodyelsehas arecordlikethat." "Gottesman:" "Hewantedto have anoutstandingreputation that he'd never really upset the apple cart when he bought a business, that he kept the management in place." "Hewasestablishing areputation thatpaidofflaterinlife." "It'sbeen buildingandbuilding eversinceI'veknownhim." "Warren:" "Ittakes20 years tobuildareputation, thenittakes fiveminutesto loseit." "♪ ♪" "Loomis:" "WhenWarrenmade hisinvestmentin Salomon," "I was one of the people, along with many, many others, who were quite amazed, because he had taken a very critical tone in talking about investment bankers and about their greed." "Andherehe was investinginone," "SalomonBrothers, thatwasknowntobe amemberof theclub." "Gottesman:" "WarrenandCharlie wereontheboard, and Charlie couldn't stand what was going on there anddidn'tlike thecultureat all." "And shortly after they got involved, the thing exploded." "(phone ringing) (clock ticking)" "Warren:" "In1991on aterribleday inAugust," "I got a call, and the two top officers of Salomon were on the other end, and they said that-- that... "We have problem."" "Announcer:" "This is "NBC Nightly News."" "Good evening." "It is the kind of scandal that rocks Wall Street and raises questions, questions about the integrity of our financial institutions." "Man:" "The giant securities firm ofSalomonBrothers underinvestigation forimpropertrading oftreasurybonds." "Man 2:" "Salomonadmitted itexceededthelimit oftrading ingovernmentbonds, oncebybuyingbonds inthenameofa customer whodidn'tevenknow aboutthedeal." "Salomon Brothers is under investigation by the Treasury Department, the Federal Reserve, the SEC, and the Justice Department." "But more important than the fate of the firm itself is the impact their actions could have on the public trust and on the credibility of the American market worldwide." "♪ ♪ (rain pattering)" "Warren:" "Thecompanyowed $150billion." "It owed more money than any other private company in the United States at the time." "And that night I met with the man that ran the Federal Reserve of New York, who was the sheriff in effect, and I said, you know," ""I've never really owed very much money before."" "I said, "I've got a little mortgage on a house, but 150 billion is a little staggering."" "And I was hoping he would say, "Well, don't worry, Warren." "We'll give you a few weeks to breathe."" "And he-- he said to me, "Prepare for any eventuality."" "♪ ♪" "Woman:" "Earlier today, the US Treasury Department announcedithadsuspended SalomonBrothers from participating in the auction of new issues." "Man:" "Itwasonemorejolt  fora scandal-scarred WallStreet." "Loomis:" "TheFedwas ineffectsaying," ""You're an evil force, and we don't want you trading our bonds."" "(gavel pounds)" "Itwasahugeturningpoint  forWarren." "Andhebelievedthat, atthatparticularpoint, his reputation was on the line." "Gottesman:" "Warrenhad24 hours tomakeup hismind as to whether he was going to go forward or just bow out." "And I think at that point, Salomon Brothers could have gone into bankruptcy." "AndWarrensteppedup andtookresponsibility." "(people chattering)" "Okay." "I'm Warren Buffett." "I was... elected..." "Interim Chairman of Salomon, Inc." "a few hours ago at a board of directors meeting." "Man:" "Why was it necessary for you to step in and what is your mandate of leadership?" "I think that it was necessary to step in because I would do whatever was needed, dig out any bit of information about what's happened in the past, and I would do everything I could to make sure" "that things exactly right in the future." "Man 2:" "Mr. Buffett, are you satisfied that" "I had to convince the Treasury that what was done in the past was awful and stupid, and they had every right to be furious at us, butthisfirm employed8,000people, anditwasgoing togooutofbusiness" "unlesstheyletus continue,basically." "♪ ♪" "Warren believed that there was a too-big-to-fail scenario." "The term was not used then, buthebelieved thatSalomonwas toobigto fail." "AndifSalomonwentdown , it would take other important parts of Wall Street with it." "♪ ♪" "Warren:" "Wehadthisdeathknell fromtheTreasury, soI calledtheTreasury." "NickBradywas theSecretary." "I'mpleadingformylife ." "And I'm sure my voice was cracking and everything else, and I said, "Nick, this is the most important day of my life."" "AndI reallydidfeel thatitwasgoingtobe  acolossaldisaster." "He wasn't sure I was right at all-- in fact, he probably thought I was wrong-- but he knew that I felt what I was saying." "So,theTreasury modifieditsorder, andineffect,ofcourse, itwasquiteanendorsement." "It was huge." "(chuckles)" "♪ ♪" "Munger:" "ItsavedSalomon." "NickBradywentwithWarren, becausehetrustedhim ." "It shows how having a good reputation is really helpful in life." "(people chattering)" "Warren:" "I thank you for the opportunity to appear before this subcommittee." "I would like to start by apologizing for the acts that have brought us here." "A nation has a right to expect its rules and laws to be obeyed, but I also have asked every Salomon employee to be his or her own compliance officer." "After they first obey all rules," "I then want employees to ask themselves whether they are willing to have any contemplated act appear the next day on the front page of their local paper to be read by their spouses, children, and friends." "If they follow this test, they need not fear my other message to them:" "Lose money for the firm, and I will be understanding." "Lose a shred of reputation for the firm, and I will be ruthless." "I welcome your questions." "(birds chirping)" "(chattering)" "Warren:" "It'sbeen50 years since I formally took control of Berkshire Hathaway, and, step by step, we've created something that is kind of what I dreamt we might create over time, butittookalot oftimeto do it ." "Neverseemedlike weweremakingthatmuch  progressonanyone day , but compound interest works." "(humphs)" "Woman:" "When you think back 50 years ago when you founded this company, did you ever imagine it would be the fifth-largest company in the world?" "No, I" " I didn't, but if I was thinking about it," "I wouldn't have thought in terms of being the fifth, or the fourth, or the third." "You would've wanted number one." "Oh!" "I mean, if you're gonna dream, you might as well dream." "...two, three." "(cameras clicking)" "(thudding) Bill Gates wins." "Bill Gates wins." "Warren:" "Well,a BerkshireHathaway shareholdersmeetingis  partly a fun festival." "It's sort of a Mardi Gras forpeople tocomeeveryyear." "(chanting)" "It'sa chanceforus tohavealot offun andmeetthepeople thathaveentrustedus withtheirmoney." "(chattering, cheering)" "Munger:" "Well,weusedtohave just  30peoplein acafeteria, and now we have this huge public spectacle." "(chattering)" "Munger:" "Celebrationis partofmaking agroupof people workwelltogether." "It's a celebration." "Warren:" "♪ We are glad ♪ (guitar playing)" "♪ You're here at our meeting ♪" "♪ Be sure to check out our wares ♪" "♪We'llsellyou See 'sCandy andDillyBars♪" "♪Andinsurance forallof yourcars♪" "♪ For its buy, buy, buy all you see ♪" "♪ At the Berkshire show!" "♪" "(flushes)" "♪ ♪ (chattering)" "Man:" "All right!" "Woo!" "He truly loves to do what he does." "Love you, Warren!" "(laughs) Aw, yeah." "Loomis:" "Ithinkinvestorswho own  BerkshireHathaway, they see themselves as a part of a community." "Woman:" "One, two, three." "There are more long-term holders of Berkshire than any company." "People consider it a religion." "Man:" "Okay, right here." "(laughs)" "Warren:" "Theydon'tbuyit withtheidea they'regonnasellit nextweek." "I think most of them buying it with the intent of holding it for their lifetime, just like they'd buy a farm or buy an apartment house." "AtBerkshire,everybodygets thesameinformation fromthecomprehensive annualreport." "Wedon'tmeet withtheanalysts." "I'mnotinterested inwhatan analystthinks aboutBerkshire." "I'm interested in what the owners of Berkshire think about Berkshire." "(chattering)" "Munger:" "Hecameout ofa privatepartnership where people he knew were trusting him." "Andhehadhis relatives inthepartnership, and they were not rich." "Andasit gotbigger, hestartedtreating everybodyelsetheway  hetreatedhisrelatives." "(chattering)" "Warren:" "Intermsof ourfeeling towardthepeople whoareshareholders, we regard them as our partners." "(cheering) They'renotsome facelessgroupof people." "And that's why at the annual meeting, I love seeing 40,000 of them." "It gives real meaning to what we're doing every day." "Let's try." "♪ If you know... ♪" "Men:" "♪ Susie like I know Susie ♪" "♪ Oh, oh, oh, what a gal ♪" "We just have a lot of love and respect for each other." "And that's never changed." "♪ Oh, oh... ♪ Susie:" "I don't go tomostthingsinOmaha, becauseI think Astridlivestherewithhim,  andthat'sforher todo." "Andthenwe do  allkindsof things." "Susie Jr.:" "Strangeasit  mayseemto people," "Ialwaysthink, youknow,"Whocares?" ""If it's working between the people who are directly involved, who cares what anyone thinks?"" "And my mother and Astrid were very close, you know." "Theyreally, reallylovedeachother, andI thinkthatmymother wasgladthatshe was there, 'cause she-- she loved my dad." "She wanted him taken care of and happy, andthere's noonebetterthanAstrid." "She'sjust--sheloves mydad." "Shewouldn'tcare  ifhehadone cent." "All:" "♪ ...back where you belong ♪" "Well, Astrid has lived with me for a long time." "She'sdonewondersfor me." "It worked well, but I don't think it'll work for lots of other people necessarily." "Susie and I loved each other, we admired each other, and we were totally in sync with what the other was doing, but we were two different individuals." "(waves crashing) (gulls cawing)" "♪ ♪" "Susie:" "ThefirsttimeWarren cameoutto SanFrancisco... we took a walk, and he looked around, and he doesn't-- he's not very visual." "Hewaslookingaround, andhesaid," ""Thisreallyis-- thisisyourcity."" "Iamso drawntocolor, light,form,andnature, that he thought it was a good place for me." "Warren:" "Overtheyears I'vedeveloped abetterunderstanding ofhumannature." "I can learn a lot about investments out of a book , but I don't think you can learn as much about human beings." "Youreallyneed someexperiences, and I'm wiser in that respect than I was 40 or 50 years ago, even though I can't rattle off numbers the same way I used to be able to." "♪ ♪" "Well, I think that what we do reflects who we are, and that's true for everybody in this room." "And if you do the work I do, you meet the best human beings in the world." "Peoplewho havemadeachoice nottomakemoney, buttoserveother humanbeings." "I think it's the best kind of life anyone could have." "I was with her in Arizona at this "Fortune" Most Powerful Women's Conference, and she told me she had a biopsy the day before, and I didn't really think much of it." "♪ ♪" "Then we got home, and the biopsy results were not good." "It was stage four oral cancer." "Howard:" "Iwason my way toa boardmeetinginIndia, andI remember sayingtoher," ""I'llseeyou whenI getback."" "And she rarely cried, and she just started crying and said," ""No, you need to stay here, and you need to come out for the operation."" "Susie Jr.:" "Sowewereall there, andthedayshe was  goingintothesurgery, thatmorning, mydad..." "It's funny, he-- there's some of it he just can't-- you know, he just can't-- the thought of something happening to her was just, for him-- you know, was just the worst thing that could happen." "♪ ♪" "Peter:" "Sheknewit wasgoing tobereallydifficult." "She knew the recovery was going to be brutal, soI thinkthatshe had  thatsurgeryforothers." "(heart monitor beeping)" "It was..." "quite a big surgery." "Shecouldn'ttalk, shecouldn'tswallow, shecouldn'teat." "Butshecameout , andI reallywaswithher forthenext fourmonthsor so ." "And my dad came out every weekend." "♪ ♪" "Andinafew months shewasdoingbetter." "Sheandmy dadhad gone toCody,Wyoming, whichtheydideveryyear  witha bunchof friends." "(phone ringing)" "Andmydadcalled." "Thiswas,Idon 'tknow, 8:00atnightorsomething, and he said, "Something happened to Mom." "I'm in an ambulance." "You need to come."" "Howard:" "Iactuallythoughtsomething hadhappenedto my dad." "I don't know why I thought that, but I" " I guess I thought my mom had had this recovery, it was successful, and why would anything happen to her?" "♪ ♪" "It was horrible." "And a total shock." "You know, she'd been fine." "She'd been fine." "They went off to Cody, she was fine, and they were having dinner, and you know, she didn't feel well after dinner," "(emotionally) and... she had the stroke." "(heart monitor beeping)" "We went into the hospital room, and my dad was sitting there." "He'd been sitting there all night, holding her hand." "Iwasso proudofhim,  because when it came down to it, he knew what he was supposed to do, and he did it, which was nothing." "(laughs)" "♪ ♪" "Somydadwenttosleep , andI satwithher ." "And I just kept putting my hand on her heart to see if she was breathing, and..." "At one point, you know, I didn't feel anything, so I went out, I got the nurse, and I said, "Can you come in here?"" "And she said, "No, she's gone."" "So, I have to say one of the worst moments of my life was waking my dad up to tell him that." "♪ ♪" "Warren:" "It'sa very strangething,love." "Youcan'tgetrid ofit." "Ifyoutrytogive itout, yougetmoreback." "Ifyoutry tohangontoit,  youloseit ." "Susie..." "reallyputme together." "She believed in me." "She-she-she-- she put me together." "And I would not only have turned out to be the person I turned out to be, but I would not have" "I actually wouldn't have been as successful in business without that, and... she made me more of a whole person." "♪ ♪" "Peter:" "Hewentdark,essentially, quietandinward fora certainamount oftime." "♪ ♪" "You know, my dad is a solitary guy, andhehadlived, essentially,a solitarylife ina lotof ways." "Ithinkit camedown tohimfiguringout  howhewasgonna getthroughthistunnel and get out the other side." "In my head at the time, I thought," ""God, I don't know if he'll ever get out of bed."" "Buthedid." "Welcome." "I'm Patty Stonesifer, the CEO of the Bill and Melinda Gates Foundation." "And we appreciate you coming today, especially since I sent a very vague and very late notice to ask you to come to a conversation with Bill and Melinda on the future on philanthropy." "So, lets get on with it." "I have the pleasure of introducing a good man whose great decision is going to change the world, Warren Buffett." "(applause)" "♪ ♪" "Man:" "A remarkable decision tonight fromoneof therichestmen intheworld." "Mega-billionaire Warren Buffett says he is giving away most of his fortune away to charity." "Woman:" "Buffetthaspledged togiveaway thebulkof hisfortune to the Bill and Melinda Gates Foundation andgivingmore than15%of hismoney tofoundationsstarted byhisthreechildren andhislatewife,Susan." "Man 2:" "Oneglobalhealthactivist called what Buffett did today one of the most remarkably selfless acts that history will ever record." "That's a better hand than I get at a Berkshire Hathaway meeting." "(laughter)" "I'd like to thank you for coming." "It-- it's a great day for me." "It's a great day for my family." "My wife Susie and I had planned that whatever I made would go back to society, and,originally,Ithought shewouldoutliveme andthatshe'dmake abigdecisiononit." "But since her death, I had to rethink the best way to get the money into society and have it used in the most effective way, and I had a solution staring me in the face." "(all laugh)" "It was completely out of the blue." "I mean amazing." "The largest single gift ever given was what he gave away that day." "I'd like to ask the people representing those... various foundations to come out." "(applause)" "The first three letters are easy to sign, I just sign "Dad."" "(laughter, applause)" "♪ ♪" "Howard:" "Whenhewrote theletterto us , heputsomething inthatletter that was incredibly important to me, which was exactly how our foundation behaves, which is, if you're gonna try to bat a thousand," "you won't do very many things that are important." "Butifyou'rewilling tobasicallystrikeout  afewtimes, you can really change something big." "I.C.C.N.!" "(laughs) (people shout)" "Warren:" "Well,I feelterrific aboutthefact that my three children each run a separate foundation that combines their special interests, whetherit'searlyeducation orwhetherit 'sfarming inareaswherepeople's techniquesforusing" "small plots of land could use a lot of improvement." "Allkindsof ways-- vaccines,younameit." "(speaking foreign language)" "Man:" "Morepowerful thanBuffett'sgift isthemessagehe'ssending tootherwealthyAmericans, thatthosewhohave theleastin thisworld shouldbenefit fromthosewho havethemost." "Warren:" "Inmyentirelifetime, everythingthatI'vespent will be quite a bit less than one percent of everything I've made." "The other 99% plus will go to others, becauseithas noutilityto me ." "♪ ♪" "So,it'ssillyfor me tonottransferthatutility topeoplewhocan use it." "It's doing me no good." "Susie Jr.:" "Iamso proudofwhat wedo ." "Ialmostcry ateveryboardmeeting, because I just think she would be so proud." "Andthatis my biggestjob , inmyopinion, istomakesure thateverypennygetsspent thewayshewould wantitspent." "Susie:" "Whoever you are in this life, youdon'twanttothink you wasted a lot of your energy, love, and time on something useless." "♪ ♪" "Ialwaysthought I'dmarryaminister, adoctor,or somebody out doing some valuable service to human beings." "And the fact that I married somebody who makes just piles of money is really the antithesis of what I ever thought, but I know what he is, and... he is..." "There'snofinerhumanbeing thanwhohe is ." "♪ ♪" "Warren:" "Thetruthis thatI'm here inmyposition asa matterof luck." "Hey!" "How are you doing, Grandpa?" "Hey, Grandpa!" "Okay." "Warren:" "WhenI wasbornin1930 , theoddswereprobably 40:1againstme beingborn intheUnitedStates." "I did win the ovarian lottery on that first day, and on top of that, I was male." "Putthatdown asanother50 /50shot andnowtheoddsare 80:1againstbeingborn amalein theUnitedStates, and it was enormously important in my whole life." "To think that that makes me superior to anyone else as a human being is just-- I can't follow that line of reasoning." "Perfect!" "Okay, good luck." "I think I was lucky to have been standing alongside Warren Buffett while he was becoming Warren Buffett." "Hehasdeveloped overtheyears." "He'sbroadened." "Hisvaluesextend throughallof hislife." "Hewantsto leadalife  thatheandhis father, ifhisfather wasstillliving, wouldsaywasagood one." "♪ ♪" "I think he's going to end up in the history books a hundred years from now." "I'mnotsurewhatrole  he'sgoingto be assigned." "Will he be famous for what he did as an investor orasaphilanthropist?" "ButWarrensaid thathisambitioninlife  istobe ateacher." "Warren:" "Theworldis  agreatmovietowatch, butyoudon'twant tosleepwalkthroughlife." "Theimportantthingtodo istolookfor the job  youwouldtake ifyoudidn'tneedajob  and life is wonderful then." "I mean, you'll jump out of bed in the morning because you're really looking forward to the day." "I have-- for over 60 years," "I've been able to tap dance to work just 'cause I'm doing what I love doing and-- and I just feel very, very lucky." "Okay, class dismissed." "(laughter)" "♪ ♪" "Night." "Kunhardt:" "Doyoufeardeath?" "Warren:" "No,I don't." "I'vehadaterrificlife ." "Ifeel--youknow, it'sgonnahappen, and I have no idea what happens after it." "I'm an agnostic, so I-- you know, it may be terribly interesting." "It may not be interesting at all." "We'll find out." "Butphysically, I'mprettywelldepreciated." "I'mgettingdown tosalvagevalue." "Butitreallydoesn'tmake  anydifferenceat all." "Itdoesn'tinterfere withmywork." "Itdoesn't interferewithmy happiness." "Itdoesn'tinterfere withmythinking." "♪ ♪" "I don't feel any diminution in my enjoyment of life or enthusiasm for life at all." "Infact,in asense, thegamethatI'm in getsmoreinteresting allthetime." "It'sa competitivegame." "It'sa biggame, and I enjoyed the game a lot." "(coins clinking)" "♪ ♪" "(scratching)" "("Somewhere OvertheRainbow"playing)" "Warren:" "♪ Somewhere over the rainbow ♪" "♪Wayup high♪" "♪There'saland thatI heardof ♪" "♪Oncein alullaby♪" "♪ Somewhere over the rainbow ♪" "♪Skiesareblue♪" "♪Andthedreams♪" "♪Thatyoudaretodream ♪" "♪Reallydo cometrue♪" "♪OnedayI'llwish  upona star♪" "♪Andwakeupwhere theclouds♪" "♪Arefarbehindme♪" "♪Wheretroublesmelt♪" "♪Likelemondrops♪" "♪Oh,wayabove♪" "♪Thechimneytops♪" "♪That'swhere♪" "♪You'llfindme♪" "♪ Somewhere over the rainbow ♪" "♪Bluebirdsfly ♪" "♪ Birds fly over the rainbow ♪" "♪ Why then, oh, why can't I?" "♪" "(musiccontinues)" "♪ Somewhere over the rainbow ♪" "♪Bluebirdsfly ♪" "♪ Birds fly over the rainbow ♪" "♪ Why then, oh, why can't I?" "♪" "♪Ifhappylittlebluebirds flybeyondtherainbow♪" "♪Why,oh ,why♪" "♪Can'tI?" "♪" "Goodnight,Susan."