Well, good morning and welcome. You're a nice crowd, you certainly got quiet quickly. That surprised me. Can you hear me all right? There in the back? Well, for business school, you know it doesn't get much better than this. Having the world's greatest investor come to your campus is quite an honor.
Warren Buffett is Chairman of
Berkshire Hathaway, a holding company whose investments range from GEICO
Insurance, to American Express and Coca-Cola, to Borsheims jewelry
store in his hometown of Omaha, Nebraska.
Mr. Buffett has been
described as 'the god of value investors' and 'the Michael Jordon of the
investing game.' He began his first investment partnership in the
mid-1950s with $100 of his own money. A few years later he began
investing in a struggling Massachusetts textile mill called Berkshire
Hathaway. Through Berkshire he started putting capital into other
businesses, chiefly insurance, which generated cash streams for more
investments which have done very well indeed as we all know.Find a great
selection of customkeychain deals.
a share price of about $18 in 1965, Berkshire today trades around
$69,100 a share. Think I'm going to go out and buy 500 shares. Over time
the company has annualized performances more than double that of
S&P 500, and Berkshire today is worth more than $100 billion. But
Mr. Buffett is known as much for his unpretentious style as for his
lofty success. He has become a champion of investors and is legendary
for his aversion to corporate doublespeak. He is rare among CEOs in that
he cheerfully admits his mistakes. Three years ago he wrote in his
annual report that Berkshire would have done better if he'd simply had
gone to the movies. There weren't very many years like that since 1965,
Berkshire was proudly, even defiantly absent from
the dot-com hysteria of the last few years, and now that the bubble has
burst as we all know, it's Warren Buffett who's having the last laugh.
In his most recent letter to shareholders he wrote, quote, "We've
embraced the 21 st century by entering such cutting-edge industries as
brick, carpet, insulation, and paint." Try to control your excitement.
You know, and personally from reading his letters, I mean it's just a
joy. It's a business lesson in itself. I would encourage you, whenever
you get an opportunity, to take one aside and read it carefully. You'll
learn a tremendous amount.
His wisdom and insights are so valued
that some investors buy a share of Berkshire stock just so they can
hear him at his legendary annual meeting, or as he calls it, 'Woodstock
for capitalists.' He doesn't make speaking appearances often, and we are
extremely fortunate to have him with us today. Earl Leonard of
Coca-Cola, and our distinguished executive in residence had a lot to
with that, Earl, and we're deeply indebted to you for helping to arrange
this. Thank you very much.
Our format today will be primarily
questions and answers. Mr. Buffett will make some brief remarks at the
beginning and then we'll move into your phase. We will have a microphone
set up over here. We would like to come around- we're videotaping, so
we'd like you to use the microphone, please. So go ahead and begin to
line up over there to ask your questions. So would you please give a
very warm welcome to the oracle of Omaha, Warren Buffett .
Buffett : Testing. 1 million. 2 million. Great, okay. I came in from
Nebraska today, and you're probably all familiar with us, mainly by our
football team. We have those fellows with the big white helmets with
those red 'N's on them. I asked one of our starters the other day,
"What's the 'N' stand for?" And he said, "Knowledge." We make it tough
on them though. I mean you don't coast through Nebraska just because
you're a football player. They major in agricultural economics, and
there's a two question final for all of the players. And the first
question is, "What did old MacDonald have?" And they were giving that to
one of our potential Heisman Trophy winners the other day. He started
to sweat. Finally he brightened up, he said, "Farm!" The professor,
delighted of course, you don't want to flunk a Heisman candidate. So he
said, "Now," he said. "You're halfway home. Just one more question. How
do you spell 'farm'?" Now the guy really starts to sweat, and he looks
at the ceiling and he looks around. Finally his face brightens up and he
says, "Ee-i-ee-i-oh!" So watch for that guy this year, he'll be
I really want to talk about what's on your mind, so
we're going to do a Q and A in a minute. There are a couple questions I
always get asked. You know, people always say,You Can Find Comprehensive
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Descriptions. "Well who should I go to work for when I get out then?"
I've got a very simple answer, we may elaborate more on this as we go
along, but, you know the real thing to do is to get going for some
institution or individual that you admire. I mean it's crazy to take
in-between jobs just because they look good on your resume, or because
you get a little higher starting pay.
I was up at Harvard a
while back, and a very nice young guy, he picked me up at the airport, a
Harvard Business School attendee. And he said,You Can Find
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Descriptions. "Look. I went to undergrad here, and then I worked for X
and Y and Z, and now I've come here.The 3rd International Conference on custombobbleheads and
Indoor Navigation." And he said, "I thought it would really round out
my resume perfectly if I went to work now for a big management
consulting firm." And I said, "Well, is that what you want to do?" And
he said, "No," but he said, "That's the perfect resume." And I said,
"Well when are you going to start doing what you like?" And he said,
"Well I'll get to that someday." And I said, "Well you know, your plan
sounds to me a lot like saving up sex for your old age.Choose the right bestluggagetag in an array of colors. It just doesn't make a lot of sense."
told that same group, I said, "Go to work for whomever you admire the
most." I said, "You can't get a bad result. You'll jump out of bed in
the morning and you'll be having fun." The Dean called me up a couple
weeks later. He said, "What did you tell those kids? They're all
becoming self-employed." So, you've got to temper that advice a little
bit. Play one game a little bit with me for just a minute and then we'll
get to your questions.
I'd like for the moment to have you
pretend I've made you a great offer, and I've told you that you could
pick any one of your classmates- and you now know each other probably
pretty well after being here for a while. You have 24 hours to think it
over and you can pick any one of your classmates, and you get 10 percent
of their earnings for the rest of their lives. And I ask you, what goes
through your mind in determining which one of those you would pick? You
can't pick the one with the richest father, that doesn't count. I mean,
you've got to do this on merit. But, you probably wouldn't pick the
person that gets the highest grades in the class.