Best Warren Buffett Speech - University of Nebraska - Newly Uploaded

By VW Staff. Originally published at ValueWalk.

Warren Buffett 1993 speech – see the full video and informal transcript below – first an intro from the uploader

Bear with me as I share a bit of my history that helped me create SkyVu and the Battle Bears games. The University of Nebraska gave me my first job after college. I mostly pushed TV carts around, edited videos for professors or the occasional speaker event. One day, Warren Buffet came to campus to speak to the College of Business. I didn’t think much of this speech at the time but I saved it for some reason. 15 years later, as a founder of my own company, I watch and listen to this particular speech every year to remind myself of the fundamentals and values Mr. Buffett looks for. He’s addressing business students at his alma mater, so I think his style here is a bit more ‘close to home’ than in his other speeches. Hopefully many of you find great value in this video like I have. Sorry for the VHS flickering line on the right side.

Also see

Breaking Down Buffett

Warren Buffett Books: Recommended Reading List

Buffett CNBC Interview – Highlights

Get The Full Warren Buffett Series in PDF

Get the entire 10-part series on Warren Buffett in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues

See 2017 Hedge Fund Letters.

Here are my takeaways:

Accounting is the language of business.
For founders, nothing can beat painting your own painting.
Apply the “Newspaper Test” to all your decisions.
Know and take care of your Durable Competitive Advantage.
Choose your heroes carefully because you will become them.
You are your children’s natural hero, embrace that role.

You know what I came down today it’s been it’s been 50 54 years since I broke down the highway to search the Cornhusker Highway to come and make it to school. And even then there was a lot of nostalgia attached with it because my father had attended the University of Nebraska in the 1920s. He was editor of The Daily Nebraskan and one day a yachting woman from West Point student who came in to apply for a job as a reporter on the day in Nebraska. And and I thought not only hired her as a reporter but he married her shortly thereafter. So both my parents attended here. My grandfather my mother’s side was here and in the 80s 90s and so a lot of good things that happened to me because of the interest in Nebraska. I received a terrific education here I was telling the dean the most valuable thing I learned here but I learned a lot but most valuable was accounting and we had a wonderful professor named Gray Dean. There may even be something named for him down here. Yeah. I mean he was. I’d been to the Wharton School I went to call me graduate school subsequently but I took a lot of accounting courses but by far the best instruction I received in accounting came from rading and there’s nothing more important either. People ask me what is your take in business school and how or even if they don’t go to business school what they need to know before getting in business. I tell them you know you have to.

You have to understand accounting it’s the language of media. It would be like being in a foreign country without knowing the language if you’re in business you don’t understand accounting. So is it you want to get as comfortable with that as you are with the English language. It’s made me a lot of money because I listen to what radio had to say that three or four years ago and I’ve been able to understand what I was seeing on pieces of paper what that told me about businesses and the limitations of what it told me about businesses. Yeah but that’s the way we invest. Yesterday I was in Knoxville Tennessee and we bought a company. We agreed to buy a company called Clayton Homes about a week ago was a big company and manufactured home business. We agreed to pay one point seven billion dollars for it. I made that deal over the phone without ever meeting the people there. But I had seen enough through reading and case 10 Qs annual reports but looking at figures what they tell me in terms of the kind of people even running the place the kind of accounting decisions they make and so I was able to make that one point seven billion dollar transactions over the phone yesterday with the first time I met the people and their board of directors had actually approved the deal a week earlier. So it’s you know I couldn’t have done that if I hadn’t of had a great time at rating’s class 53 years ago.

So if I’m if I’m going to tout one thing aside from this particular leadership class of course that’s how I think I would I would I would tell you that I get comfortable with it. You know it may not happen the first week or the first month in the class but I get very comfortable accounting so that I run into CEOs periodically who really don’t understand it you know they try to bluff their way through and you can just see in their faces are frightened almost when somebody has a balance sheet or income statement they really don’t know what it means. And they have to count on somebody else and that’s something you shouldn’t count on. We make our acquisition decisions ourselves. We don’t call in consultants or anybody we don’t call it doesn’t bankers much to their disgust. No investment banking fees and the Klayton deal because you know it’s my responsibility running Berkshire to understand enough about our acquisition decisions to make them based on the numbers that I see and what I see there. This is our about leadership and I’d like to talk just for a minute about that and then I’d like to really talk about whatever’s on your mind and we’ll get questions by the leadership. Obviously it’s a very it’s a very simple thing in concept. My job as leader of Berkshire Hathaway is to have visions and goals for the company overall. A long time horizon and attached to them and then they get those goals accomplished through other people. Well that’s what it’s all about. I can’t do it myself. So I have the acting I have to know where I want us to get to.

I have to see over the next mountain if possible but then I have had a lot of other people to look over that mountain with me and really do the job and they are the ones that get accomplished so it gets getting things done through other people. Now Berkshire is like some like many large corporations in certain ways but it’s really quite different in many ways. We have over 150000 people now working for Berkshire Hathaway and dozens of companies throughout this country primarily and even abroad a little bit. We have exactly fifteen point eight people in headquarters and they’re breaking down today so we’ve only got thirteen point eight. They’re there today and probably working well with those thirteen point eight as we would if have an eye with the office. But that is a huge organization. I mean we we have dozens of operating managers CEOs of their businesses out there running them today and they do it without any direction from the Home Office except for one very limited piece of direction that I give them which I’ll get to in a second. But we have these people and there are an unusual group of people running these businesses because most of them have sold their businesses to us and they’re very very wealthy. Three quarters of our managers do not need to work financially. We have no reason financially to work probably three quarters of them are worth at least 50 million dollars and we have some that are worth in the billions. And yet these people jump out of bed every morning and go and work and they work weekends and they love working. And why is that. And what’s the key to that. Well the key really is the same reason I keep working.

I’m 72 I’m getting Social Security now so I know I I should be in for a good off pushing shuffleboard around or something Besart. But what I do what I can do anything in the world I want to do. But what I want to do is run Berkshire Hathaway. Why do I want to write it that way. There’s a couple things. A I get to paint my own painting. I go down there every day and I feel like and feel like Michelangelo there working on the Sistine Chapel or something nobody else might think is a great painting but I get to paint my own painting. I do not have people second guessing me. I did not have people saying his use of little more red paint than blue pay my bills are paid these aprons and I will say I get to do my own thing. It’s it’s the form of creativity. It’s exactly like somebody feels that a professional offers really feels that the Pinkard they’re not doing it for the money primarily they’re doing it because they like doing something well that they happen to be down down the road of their talents. And the second thing I like frankly is I like I like a pause like appreciation. So I like having shareholders who feel good about what I’m gonna be the most. It’s you know I have a 96 year old aunt and her husband. It was the YouTube. And she is you know she had she has all the money. Berkshire Hathaway she counts on me and she’s out in Palm Springs now.

And hold worth isn’t Bircher and I’ve got cousins everybody in our family has got a hold of my overshirt. And so those people are counting on me. And that’s kind of fun to have something where you can actually deliver for other people and change their lives in positive ways. As a matter of fact we had a couple that nobody had ever heard of up until a few years ago. The officers in New York they came from Omaha and Don Offner went to Central High that OTHMER Sure which high school she went to an all male probably South High. They left 750 million dollars when they died. Nobody ever heard of them. And I think a substantial portion went right here to the interest in Nebraska. It was probably a total surprise to the university when they got I don’t know how we got 150 million or so. Yeah. Yeah well you should have rehabbers but nevertheless you know you see the money you see good things happening out of that. So it’s fun. Mean it’s you know it beats. It beats playing golf every day or something for it. So I say if that’s what turns me on well it’s going to turn on these managers that are out there buying things like Clayton Hollonds or we’ve got a company Flight Safety trains more pilots than anybody in the world. Flight Safety is run by an 85 year old man. She started the company with ten thousand dollars in 1951. It now trains four or five times as many pilots as non-military pilots as any anybody in the world.

And he is there at 85 and then it’s a matter of public record he’s got a billion dollars worth of Berkshire shares. He works seven days a week. He loves it and he loves it for the same reason that I love what I do. He gets to do it his way. He buys these big simulators that train pilots and he doesn’t have that check with me as to whether to spend 50 million dollars for a simulator. He doesn’t ask me so much more about it than I do why in the world body asked me well I can’t tell what kind of a plane. I bet you know what I’m flying around. And Alice is spending a couple hundred million dollars a year on simulators. Suspending Berkshire Hathaway money. And he never checks with them. He’s never had to come to Omaha for any kind of meetings. He runs his own business and that’s what he loves in life and I let him do it and that’s my contribution to it is is really turning loose his energies and you know they were properly directed before we bought the company seven or eight years ago. Why should I think that you know he couldn’t keep running it after that. And like I say at 85 he sold. The second thing that our managers like in addition to this painting their own painting is they too love applause. I mean I try to be I report in my annual report accurately what they have accomplished but they accomplished a lot. You heard Susan Jacques I think some weeks ago here Susan came to abortion times and she was making four dollars an hour four dollars an hour.

And at age before she was 40 she became CEO of the second largest independent jewelry operation in the United States for about an hour. It’s down you know. And Susan knows more about I don’t know. But surely you know you could have a phony diamond or real time and I couldn’t tell the difference but if I started telling Susan what to order in a way of jewelry or if I started telling her what kind of terms or eccentric customers are hiring like that she doesn’t need that and she really owns sport shops. You know we have a stock certificate. We get the profit. We got accustomed to. But it’s her baby it’s her baby she decides you know everything about that place and. And so it’s her creation and that feeling of ownership is really extraordinary and it’s so much better. I mean that’s the way I like to work. And it’s the way it’s the way Susan Jacques likes to work it’s the way Ali Velshi likes to work. And Susan like anybody else in this world loves being appreciated. I mean it should be something wrong with her. She did. And the truth is nobody appreciates her more than I do. I mean she is a talent and we are lucky to have her. And we’re lucky to have all of these other managers so leadership. But Berkshire really consists of taking a bunch of people who in a baseball analogy with the 400 hitters and just handing him the back and just telling him to get off their plate and take a big swing there’s very little to it beyond that. One thing I do is I sent him a letter.

We don’t have meetings and also our managers know that there are any meetings there and there no there’s no catechism or anything else. Once every two years I sent them. This is it was enough for one and a half pages or so only the instruction that they don’t they don’t send budgets to us we don’t we don’t care about their company whose budgets don’t use budgets. We just give them some of the managers I talked to a couple of times a week because they like to talk frequently. Some of them I talk to literally once a year because they don’t want to talk to me. AD Well you know it’s up to them. I adapt to that. The only thing I tell them and this letter was when on January 20th 2003 it says it’s been two and a half years since my last memo. Now I’m a pig. Have you have the managers out there have been two and a half years and they heard from the Home Office been two and a half years since my last mammal. Here are a couple things to keep in mind. And number one and this is number one every time this doesn’t change your own change. Two years in our four years in our situation number one we can’t afford to lose money. Even a lot of money we cannot afford to lose reputation even a shred of reputation. Let’s be sure that everything we do in business is going to really be reported on the front page of a national newspaper in an article written by an unfriendly but intelligent reporter in many areas including acquisitions Berkshire’s results have benefited from his reputation.

And we don’t want to do anything that in any way could turn vision. Last year Berkshire was ranked by Fortune as the fourth most admired company in the world. This year we were third the United States they just published and it took us thirty seven years to get there but we could lose it in 37 minutes. And that’s the message. I mean we we we can lose money. Not sure to make money but we’ve got we’ll figure out ways to make money but we can’t lose it. We can’t lose a shred of reputation because you don’t get it back and you can’t get 37 minutes because you can lose it a lot faster than that you can lose it in five minutes. And that I was talking to Bruce coming in and he did some work around Salomon Brothers and I went back there 11 years ago because this firm which had just as it had the second largest balance sheet in the United States at that time it was it was a preeminent firm on Wall Street. John good friend who would who ran it had his picture in front of BusinessWeek as the king of Wall Street. And in April late April 1991 he made a fateful decision. It was reported to him that an employee down the line had flimflams to the U.S. Treasury had broken some rules to try to play games with the and John did not report that back to the Treasury or the Federal Reserve or the FCC or to anybody else. He didn’t do anything wrong himself but he just he he got behind the curve. He didn’t report it.

The president of the company Tommy Strauss didn’t report it if you saw that Katie Curry show on Sunday night on the Central Park jogger Tom Straus was on the air. But Tom Strauss ended up getting losing his EEGs President Zoellner brother John was chairman. John good friend. Ah they didn’t do anything. They they dawdled and after a few weeks the same guy that Dunn committed the terrible acts earlier on May 15th. He did the same thing again in a Treasury auction and now they were in this terrible pickle because they had known about this. On April 28 this guy was a bad actor and they hadn’t done anything and I’m an atheist he does the same thing again. And now they go they start feeling it they go and talk about it. You know that people will say well why weren’t you in here before. So they just kept trying to shove it out of her mind to do other things. And it came within inches of destroying a firm to destroy their careers. I mean the friend who spent 30 years on Wall Street had a fire a fine reputation the king of Wall Street was brought down by one simple act of omission. All he had to do is pick up the phone. Jerry Corrigan was head of the New York Fed. He had to pick up the phones say Jerry you won’t believe this about this crazy guy in our treasury department. Phil Mosher has just done this thing and I’m terribly embarrassed. What can we do to make it right.

I mean you know and Jerry Corrigan being Jerry Horrigan turned red in the face and gotten very Madon a lot of language I couldn’t repeat here. But in the end he would have said thanks for calling him and talking about it immediately. You know will slap a fine on your do whatever is appropriate. And the next day the firm go on fine. But what John Goodfriend actually you know perfectly ok guy but he just he didn’t act like count and Tommy Strauss who was number two the same way. And later on they were fined and certainly kicked out of the Securities Industry and Solomon barely survived. Eight thousand employees around the world had their future in real jeopardy because of that single act. So just just apply the newspaper test. That’s what I tell our managers. I can have a thousand page book of ethics I got all kinds of rules and hundreds of them. But in the end just all you got to do is think about you know you really want what you’re doing put on the front page of the paper tomorrow to be read by your parents by your by your spouse or your kids by your neighbors by your co-workers. And if you’re embarrassed about it know just forget about it. You’re all going to do well financially. You know the nice thing about it is you know you live in America in the year 2003. You don’t live in Bangladesh. You don’t live in America. How 1791 it was. You live and you live in a society which has a GDP of over 10 trillion and you just pick up the crops and you’re gonna do it right. You’ve all got to acknowledge it.

It takes three qualities essentially to do well and extremely well I see in this country it takes intelligence it takes energy and it takes integrity. Now everybody in this room has the requisite intelligence you wouldn’t be here if you didn’t. I mean it doesn’t take 180 IQ although I’m sure you all have those. But it it it takes it takes a reasonable intelligence. You’re getting a great education you’ve got the energy that’s why you’re you know you’ve shown up in school and it takes integrity and I say if you don’t have integrity you know it we don’t want to hire somebody that’s got the intelligence and energy if they don’t have integrity we’d rather hire somebody who’s dumb or lazy. If you don’t have Harry because they probably won’t ever get around to Sheedy’s or do something. One last thing in the world I want is somebody that likes and Mosier had intelligence and energy at SLM and he was the head of the government of trading. He had lots of intelligence a lots of energy and he went to jail. And he and he almost brought down the firm and integrity is absolutely an option. You know you need to be able to throw footballs 60 yards and you know you may not be able to run a hundred and ninety eight. You know you may not be able to see Freeport pointers from but you can choose where you stand on the scale. Can you were born wired one way or the other. There’s an absolute trust you make. And the heroes I’ve had in my life other than the people that I’ve felt stood out of that respect my number one hero was my dad.

But I’ve had other heroes Tom Murphy and Graham people like that. And the reason I admire them was not because they were the smartest people in the world although they were smart and it wasn’t. It wasn’t because they made the most money. That meant nothing. It’s really because I felt they were the classiest people that I ever met my life. I mean I saw them behave over year after year after year in a way that I could write their story on the front page of the newspaper and even in an unfriendly tone I could not do anything that would embarrass them and at least they behaved extraordinarily well and having the right heroes you know is terribly important. You know you told me a 10 year old’s heroes are and I can give you a pretty good prediction about about how they’re going to turn out. You don’t choose your heroes very carefully because you’re going to you’re going to look like them at some point and you’re lucky if you’ve got if you’ve got the right I’ll give given aside and we’ll get on your questions. But it’s something you’re not a yet most of you but if you don’t you’re a parent you are the national hero of your child. I mean you I mean you know you’re this great big thing here. There’s two great big bags and there’s a little tiny child a pendant on it right. You are the national hero. And add anything you get to school subsequent or anything else.

They’re going to be shaped more by what they see in this behavior of yours for them than anything that will impact them later in our lives. And if they want you to be there you can destroy them of course and you know you’ve seen it many many times. But but actually if the parents are proper girls that their child is about 90 percent of the way home. And you know you’re lucky if you have parents like that and you can be that here’s when are you going to be something else and you’re shaping that person. It’s nice to learn accounting when you get in Nebraska. But but the behavior model that you take is incredibly important. Let’s talk about what’s on your mind now that you get to ask ask tough questions. More fun for me and they give me my business take a deep personal they’re going to be blogging gold. You pick it out and more from our business school is obviously in your mind. You or did you have to my meaning. Yeah. Oh that’s a very good question. You know how do you turn failure into a plus. And it’s true. When I was at the University in Nebraska one day I was reading the Daily Nebraskan and it said in Romans 300 or something at three o’clock there will be this panel of three professors here at the university and they’re going to award the Nathan Bowles scholarship. I don’t know. So you saw that around at the time said it will give you 500 hours to go to the graduate school of your choice of words change you know. But that was it.

So I read this and I went there to this room at three o’clock that day or whatever it was I walked into the room and there were the professors and I was the only student that showed up. We got to. I mean they were stuck. They kept waiting and looking at why should we worry more candidates. But there no one came in. So I won five hundred dollars by default. And now those are usually my biggest triumphs when nobody shows up. And so here I was I had five hundred dollars to go toward any. It wasn’t it wasn’t altimeters any any graduate school for a master’s degree. So I applied to Harvard. My dad went to a two and I surely heard from Harvard and they said voters Chicago and he is for running that who interviews applicants from the Midwest. So he got on the train as that’s what you did in those days and I spent ten hours on the Burlington going to Chicago. I transferred to another level an urban train to go up to this country day school. This fall it was the headmaster and he was the big interviewer for Harvard. And I got there and after about 10 hours he said I or think about something else. You know he come back later on. I was 19 at the time and I looked about 12 you know and I I actually about eight as was not a great combination but so he said forget it. So I spent in an urban train back to Chicago to attend are very very good all the time.

You know I told my parents you know I had embarrassing but it was it was the luckiest thing ever happened to me because if I’d gone to Harvard I would have gone to a two year business school. I instead applied to Columbia where I could graduate one year and get a master’s degree. Luckily that by the accident of it and being in a Rascon National Guard which did not get cold over the Korean War I missed going in the Korean War. I I got to meet Ben Graham and I had an enormous effect on me subsequently and I probably got my wife that way because she was going to Northwestern. And I was able to put on sort of a full court press because I got out in one year and otherwise. Q Did you miss the other guy. I mean I got her before the competition showed up. And so it worked out wonderfully. It couldn’t have worked out better. And that’s been that’s been my life basically. I mean the things you know you will get some disappointments. But the future is what counts at the front if I knew every decision I was going to make was not be perfect. It would be it must be like playing golf and knowing you’re going to hit a hole in one on every hole. You wouldn’t play golf every time you got out of key you took a swing of the ball ended up in the hole. Be fun for a few days you can get on TV. But if it does the game will not be any fun. So it’s failure and I wouldn’t even consider failures. But there were mistakes you you call them.

They’re part of the game and in the end you know you go out and we’ve made plenty of mistakes in business we’ll make more and then you know that Babe Ruth and you know for a long time subsequently got eclipsed by a few votes but hey hold the record for strikeouts. Also the old record for all Muslims eyes Bay baseball where until the modern era came along. So this is part of the game you take big swings you know you. In May. You may. You’re going to miss sometimes. But the you know the Harvard thing you get a kick out of this. Maybe I might be back to the 25th anniversary of this class to talk to them. And I want it back. It was kind of embarrassing because this was the 25th reunion and the class was talking about the next 25 years to these alumni that were back after 25 years. And my job was to talk about the next 20 years. Your financial future in the next 25 years this was it was in the mid 70s and right before me on the program. Masters and Johnson we’re talking next to me five years of their sex lives. So nobody stayed around for high talk but that night that night at the Ivy League they felt it was part of their class. And I said you know we’re big enough to make admit when we make mistakes around here and we turn this guy down through it back to the water. And so now we’d like to make him an honorary member of the class. So they did it and they voted and everybody voted for it.

And I stood up as I recited the story that I told you and I told him you and I said at the time I was kind of philosophical about this. I was young and he migration weren’t that good or something and so I took the rejection kind of well but I said now that I’ve met the people the guy didn’t have some really sore OK who’s next. Yeah. You have said I’ll repeat it here. Yeah well really I only want the Minister to say one thing at my funeral if he gets up there and play a few little him that there is no place like Nebraska. I’d be great. I just want to say up prayer and say My God he was old I’ll settle for crude as the Amish said Birchers my creation. So I would like people to the shedid people will regard that. Well that’s what counts. I mean that’s my painting and. And I hope that people will get been running for almost 38 years but 30 years exactly and he’s only got another 30 or 40 to go. And I hope that that we have done some things differently than other corporations. We operate on a different model. And I hope two things about it actually I hope that the people will realize that that model works and why it works and so on. Because it is it does conflict with certain management theory over the years. And secondly the important thing is that it last well beyond me. I was not a Wal-Mart six months ago and talked to their management group and it was I had a great time. What is really astounding. I voted for Wal-Mart as the most admired company in the country last year.

That was that’s where my vote went it was astounding what Sam Walton built starting in Bentonville Arkansas with a pickup truck taking on J.C. Penney a Kmart and Sears and all of these people with no money no real estate no preference vendors no credit card list anything he just took them on. And of course he just ran right away from them. But the really impressive thing about Wal-Mart is that Sam died about 11 years ago and that there had been no momentum lost. I mean what he is still doing that nobody else is going to build it like Sam. But David last first at least got. Now as the Zingo they have kept that company with its special culture going at full steam ever since. And that that’s really what I hope happens with Berkshire and I’ve tried to think about ways to make that happen. But the real test will be if 10 or 20 years after I’d die that the special culture that I think is part of Berkshire is not only just as strong as ever but even stronger. We have a situation in Berkshire where in 38 years we got all kinds of CEOs there and all kinds of businesses for forum and Omahaw. We have never had one CEO ever leave us period. They go someplace else. I mean it. I don’t know that there’s any because I’ve got the country. So it’s it’s been a and we’ve never issued a stock option. You know you know you read in the papers that you’ve got half stock options that attract quality of all that sort of thing.

We never had we never had to share them. And and and in the end I don’t know how many dozens of managers we’re talking about. But no one ever has ever left for another job and someone been offered way more money. Ajeet Jane who runs our reinsurance operation probably could have increased his income ten times tenfold. He’s already making any new orleans but but tenfold. But he didn’t want to leave. And that is the culture that I hope we can maintain and that’s what I’d really like to be if I’ve done anything to contribute to that continuing after I die that would never be worth it. I actually kind to keep managing Bircher after I die. You have to understand that I have given all the matters we keyboards you know I got the dark room. We’re going to go and do it. I’ll be there this is be it at the Russ Verney Park worked 103 in Berkshire and she’s she’s sort of our examples. And then she then she took off from work and she died the next year. So very dangerous to do early is that yep. I myself be calling on these people ok. On personal finance how do I have Wolmar in your duties. Oh I hope we’ve got a of there’s about a foundation. Eventually it will have everything. I mean basically everything I’ve made will go back to society. America has been on it for me and I know it as well. You go out. I have I got about an eight page letter that the trustees have already seen. It’s a very few trustees.

I don’t believe in large groups of people making decisions it gets to be you know sort of descends to the lowest common denominator so there’s only four maybe five or six trustees interestingly enough not just by accident but I picked the people I trusted the most in terms of both their intelligence but also their quality to run it after I met people I feel the surest of a significant majority will be women it will be a women woman controlled Foundation and probably the largest foundation in the world at that time but with a very small number of managers trustees. I have in my letter I tell them that I’m not going to give them any specific instructions as to what to do with the money. I tell them that their judgment above ground will be better than my judgment six feet underground so that in the end I want them I want them to do a couple of things. I want to attack really big important causes. I don’t want them to give a million dollars a year or a billion dollars there and everybody that you know that asks that they know what sort of things. I don’t want to doing things with an eyedropper. I wanted to swing take very big swings and then I want to measure what they’re doing by the importance of what they’re doing as contrasted to the natural funding constituency for that. Taking a health field. I mean you have the National Institute of Health spending billions and billions that are yet all kinds of money going into medical research. It’s crazy in my view for the Buffett Foundation to be engaged in medical research. It’s not that the subjects are isn’t important.

There’s already a huge funding constituency. It will be crazy for the money to go to Harvard or something sort it isn’t that it isn’t a fine educational institution but you’ve got all these people that gave money to Harvard and they’ve got a ritual on IBase and all of that sort of thing. So I want the combination of a terribly important program and the lack of an actual funding constituency. Well where do you find it you find out what unpopular causes are quite a degree Rockefeller felt somewhat the same way. It’s interesting. He was the first major patron of any sort of black colleges in the United States. And if you think about it black colleges had no funding decisions. I mean they’re they’re all on my didn’t have any money. Basically if you go back 75 or 100 years. So there wasn’t any money coming in. People didn’t know they didn’t go great businesses and then and then leave tens or hundreds of millions of dollars to the institution. And it was it was self-perpetuating. And so Rockefeller stepped in and he he took a group of black colleges and funded them in a very very big way. And I admire that kind of decision and obviously would otherwise not think what happened. And that’s why I hope the trustees of the nation do. I was with Bill Gates last week with and I consider his foundation. He and Melinda together because they’re equal partners in it. I consider their foundation to be the most logical big foundation in the world. They’re giving away about a billion dollars a year.

Now Bill said and Melinda said to themselves how do we say the most lives per dollar spam in the world. And they decided that in certain major medical areas that what was being done abroad in many countries was zilch in terms of these things that were easily preventable by vaccines or various other things. And they decided they could save huge numbers of lives per billion dollars spent but they’d be spending it on places like India and all Africa where they would get no credit and save them no building put her name no nothing that was their metric. And as that Bill sold metric I mean he doesn’t want to talk about go to him was Proposition to stick his name on something that over 50 million dollars that doesn’t interest him at all. He is a totally rational and he pours himself into it. He has educated himself on medicine and medicine outside the United States in a way that I’ve never seen anybody and I’ve got news with this you should write down on May 2nd on public broadcasting there will be a program where Bill with Bill Moyers Bill Moyers is interviewing him and Bill explains his philanthropic thinking and it I went there. It was taped at Columbia University and back in and. It’s actually more about the that that is going to be a great program. They took about an hour and 20 minutes it’s going to get edited down to 56 or 58 minutes. But you will hear as you’ll hear is Colgin an argument for rational philanthropy on that program as you’ll ever hear in your life.

So I it’s interesting that program came about because about two years ago I asked Bill a question had a group get together something akin to us you asked him I asked him to talk about the evolution of his philanthropic thinking. And there were a group of about 60 who was there and he talked to us. And I mean it was a fabulous start. I just said you know you got to get that out in the public domain somehow. So. So this thing with bone wires does that if I died tonight. All my Berkshire shares which are ninety nine percent of my network plus go to my wife she dies for Schreurs over me and then it all goes without the foundation and it will then be active on a very big big scale. And those are the guidelines. And who knows what those problems will be. I mean it will probably in my welcome in civil rights in the early 60s. I mean the civil rights organizations were not being funded by anybody and the money wasn’t the big problem but it was a problem in the civil rights arena. And there was no natural funding constituency for that. It was an important very important issue but it was an unpopular issue that he respects and it seems to me that’s where the money should go particularly to have on our big scale where he can really do something pens why die. But but you know 10 or 50 years from now the foundation to really I mean he could have a lot of money. And so they could do things that nobody else could it happen and it will be what people want to do. That’s the nature of it was what he wanted to do it already being done.

Interesting the contrast between business and philanthropy is interested in business I swing at IJI pages. I stand at the plate and I like pitches one inch above my table right in the center of the plate. I can wait and wait and wait because there’s no called strikes. As long as on my shoulder nobody’s going to strike. If the pitcher throws me General Motors at 36 IBM at 82 Microsoft at 25 and I know swing it’s not a strike. It’s not a head either but it’s not a strike only why swing is it a strike so I wait for easy patience I wait for things I understand your factory in my sweet spot. Philanthropy is just the opposite. You’re looking at the toughest problems the world faces and there are intractable. To some extent I mean these are tough tough problems and they have resisted the utilization of money over the years. And that’s what makes them tough problems. I mean the problems you solve them are the humans are the problems you can’t solve with money. So they are very tough problem one. One thing I’ve got involved in just a little bit recently is something the sand on this heading. Senator the former senator called the Nuclear Threat Initiative added. Essentially I say not who is who is as well-informed as anybody in the world on this subject can articulate and everything is working on a problem of the nuclear materials and hord nuclear talent that exists around the world that might become available to terrorists or to governments to impose on the rest of the society.

And there are vast amounts of uranium and lesser amounts of plutonium and there’s a lot of unemployed Russian scientists and so on. So this is something that Ted Turner actually set up a couple years ago and got Sam to handle. And because AOL Time Warner stock which was you’d be used or funded from Ted. One now on price. They’re short of money. So that’s something I’m involved in. And you know it’s not something that has popular appeal. You can’t raise Gant’s and as I’ve hit hundreds of thousands of people that it was not. But but that’s the kind of thing that I think you know the foundation should be doing. Yeah. Yeah the question is with the government considering eliminating the double taxation on dividends. Would that change your attitude at Berkshire geared toward paying dividends and what sort of decision making framework do we have about whether we pay dividends or not. Berkshire I took over in 1965 and we paid ten cents a share one year. In the late 60s. I can’t remember if I’d blocked it out on my resume the or something because that was the only day that we paid. The determination is very simple. As is can we retain a dollar or a billion dollars or whatever the amount of earnings and have that dollar become worth more than a dollar in immediate present value. Now even though he may not get used for a few years or something and others are weak. If that dollar worth more than a dollar if kept doing that is forgetting about taxes entirely.

Let’s assume the total tax free society in terms of dividends and the answer to that so far has been yes we have kept the dollars that we’ve earned and we have created more than a dollar of market value for every dollar we retained. And as long as we can do that it’s simply to pay out a dollar even if it’s not taxed and put it into my pocket. It’s still only worth a dollar if I can create more than a dollars worth of value in the stock. So we have done that for a lot of years. Doesn’t mean we can do it forever but we’ve done it for a lot of years and that is the test and you will find in the back of the Berkshire Hathaway annual report which will be glad to send any of you on the Internet. Also what you’ll find in the back of the back of Berkshire report something that isn’t in any other report that I know of is something called the economic principles of Berkshire Hathaway that’s been in the report every year now for at least 20 years. And those principles don’t change. That’s why there are principles now and that’s why I’m willing to lay them out. I mean if if I act in conflict with those principles I expect the owners to call me out. But I look at the investors in Berkshire as my partner. Now I’m the managing partner. They can’t because I was somewhat shocked they can’t do much. Ah so they ought to know what the gain is when they if they join us. And that doesn’t mean everybody wants to join us but they want to know what the rules are just as if you and I were starting a partnership.

I was going around it you’d want to know you know how we were going to conduct business and what our costs were and what our time horizon was would be ever so what would I make distributions all that kind of thing. So that those principles cover at this point you raise I don’t forget what’s the third or fourth quarter something like that. But it’s explained there and I want people to understand our owners understand it. I mean I look at every owner when I write my annual letter to shareholders which takes me an ungodly amount of time. Are you miserable. But nevertheless it’s important because it is the one time of year I’m talking to my partners and when I started out actually mentally put dear to us and Birdie because those are my sisters and they have all our money and Bircher they’re smart but they’re not financial types I mean they’re spending their time on Appert and I essentially want to be talking to them as bright people who don’t know a lot of financial jargon necessarily but they’re all but are interested enough to read a lot because they’ve got all that money. So I don’t have to worry about keeping a shortening I got it if I if I’m talking about their money I’d probably get their interest. And I take that off of the very end and then I’ll take up your doors and Burgin with the shareholders of Berkshire. But I want to tell them exactly what they’re in. I want it to be just as if our roles were reversed.

As always the test if Doris and Bernie were running your place and I was living in Carmel California like Birdie is what would I want to hear from them. The managers at one of the things I want to hear is just exactly the question that you asked you know what is what is your attitude about distributing money from the from the company because I get to make that decision along with the board of directors and they don’t. And so management’s withhold money that really belongs to their owners because they like building the kingdom. Some of them you know do. Out of fear. I think I’m doing it for a rational reason and I want to explain that reason I sell a lot of testimony on that too because I think I should be tested. And it’s a it’s a very important relationship that really has deteriorated over the years in my view between management and owners. I mean you’ve seen in the last 10 years a slippage in my view of the behavior of American CEOs on all kinds of exceptions but it’s very interesting because there are culture and also there’s a few. And they’ve gotten a lot of publicity lately. But nevertheless they have behaved as most humans do they sort of picked up the behavior of those around them. So I’d hate to hang out with people better than you are. I mean you know if you hang out with people better than you are you’ll become better yourself. Everybody behaved better those around my wife. I mean even including me starting from a low base. But the she just had an effect on people and other people pointed out.

I mean when I was in the National Guard and we were going cap and about an hour I was reading comic books you know pretty every measuring probably goes with the language you know every every other word go to some form of profanity. It just gets sick. Well what happened to American CEOs in the 90s is that they they the behavior the situational ethics sort of cause behavioral norms there’s the sink I say is a little like Mae West described her career. She said I was so white but I Drifted an American management drifted to quite a degree during that during that period. I think it’s very important. You know what that relationship is. People have given you their money at Berkshire Hathaway or any other company. And and I’m I’m I’m a I’m a trustee for the net effect. And then the question is they ought to see if I control the place they ought to know the yardsticks. So if you do go to our Web site go to the back of the report or something like anomic constables and we try to discuss everything is important. And I tell them I’m going to vote them in every year so that they can you know they can hold me accountable. Yeah. Yeah. And the question is about the personal qualities we look for in the executives we’ve placed in our various companies. The first thing is we don’t usually buy something. I mean they come with we don’t have anybody to place. So I have a problem occasionally if somebody dies or to replace a CEO. But most of our CEOs came with a deal. Clayton Homes which were buying comes with Kevin quite right. We will put an overhang there.

It will run a place just as before. But in terms of the personal blog. One when a seller comes to me with a business whether it’s Klayton or any of the others I Friedman and borsch Heim’s Mrs. B at Nebraska Furniture remarked when they come to me the first question I have to ask myself because I’m counting on them to run the vice. I have to decide what do they love the money or do they love the business. There’s nothing wrong with liking money. I know like money. But but they love the business. They can have a passion for it because I give them a whole lot of money and a lot of money and they all of the business no matter what they tell me. Six months from now they’ll be gone. I mean that is all. Why am I getting up to 7 in the morning is like a lot of money on it. I mean it it just it won’t work. So they have to love the business. I mean I want people with passion Boulez’s. I used to say that I had a one line employment for one question employment for the question was Are you a fanatic. You know if you answer yes you got the job. I was a fanatic about their business. You know I mean you are people that love teaching. If if if you’re in the classroom. You don’t have a passion for it. It doesn’t work very well. So right now they’ve got the passion and our managers do. But not everybody in the financial operators.

We never bought a business from an LBO operator or a financial operator. So they don’t give a damn. I mean all they want to do is make sure your share clears and they’re gone. And it isn’t going to work if we try to buy from them. So we buy from these people who love their businesses and and then it really my job is just to make sure that I don’t mess it up and create conditions that cause it to call it loving it for some reason because they can’t inlining only I can only I can sit up and they care about being treated fairly on compensation. They all measured against everybody else. They’re not a lawyer they’re negotiating with me. I don’t have a compensation arrangement with any of these managers. You can’t be putting one paragraph. And I go to other companies where they have a lawyer on it and there’s 80 pages on it. It tells what happens John they get paid a severance or they end up going to jail. You know I I just I will deal with somebody that thinks that way. And that’s why there’s a self selection process in terms of who comes. There’s this invisible filter out there that causes the clients of the world the Alula usable world the framers of the world of Mrs. Beatha world to come to us. Well I made a deal to be in 1983 Mississippi had another offer from somebody else that was on Mohajir and she just said I don’t care who don’t own 20 percent of the company that she had four children aged 20 percent.

She told them you know I’m selling Mr. Buffett shoes communist or above and I tell her when she was 104 and back when I walked in the first to hear him my new boyfriend wish I didn’t I don’t get a lot of places I get tired of that. Yeah but she you know she she built this. She came over here in 1921 too she landed in Seattle with a tag around her neck. She couldn’t speak a word of English said Fort Dodge Iowa. She couldn’t couldn’t communicate. She said that had the American Red Cross got her out to Fort Dodge and for two years she got no place because nobody nobody spoke Russian and or Yiddish actually. And so she moved on just to be around a lot of Russian Jews who she could talk to. She learned the English language when her oldest daughter Frances would go to school and come home at night and teach her good words. And she started and she started saying 50 bucks at a time over to Russian or or 70 she has seven siblings. And her mother and father to get them over here after 16 years she bought all the family over she say five hundred dollars and 60 years. Pedaling is calling whatever. And she started in the restaurant of the 500 hours and established artists home furnishings complex in the world. And it all came from 500 dollars in a very special woman. And can you imagine building something like that and selling it to some financial operators and the result you’ll go public with a couple of years later. And you know it meant something. She wanted it to continue like it has continued. And that’s that.

Those are the kind of people we want to attract. Is it so much me selecting them as them selecting Berkshire. I mean that’s that’s the key. And and frankly we’ve gotten to that position in this country where the people do care about their businesses. It is. There’s no second choice to be on site Berkshire we get they come to us. We had a woman Doris Christopher come to us last year or Christopher in 1980 had two little girls lived in Chicago lived in a twenty thousand dollar house. She and her husband both work looking for something to do to make a little extra money. She thought about catering and decided that it would take her away and the kids too much. So she decided that you know best though was she bought a home ec teacher. She knew cooking and as you know the kitchen and what was useful to people. So she borrowed three thousand dollars and her life insurance policy that’s all she had. She went out of oversee she noticed Martin Chicago and said what’s the least amount of this utensil utensil manufacturer was so usually doesn’t. And she took them home and then she got the as she had the idea that she would hold these parties essentially in people’s homes. And so she arranged with the woman in suburban Chicago to hold the first party. She almost turned back. She’s right there should laugh at me and a lot of overhead they will buy you what you do. You’re very unsure of. But she went there. She sold out.

One hundred seventy five dollars worth of goods that I she sold me her business last year. And that business just made 140 million dollars pre-tax from this 3000 dollar investment. That woman had a passion for business and she understood her customers she loved her because she loved the people that work with 67000 associates. It’s called The Pampered Chef. Some of you may have been to a championship party. Almost one woman out of 10 of the United States wants something from us last year. And now unfortunately have to acknowledge that she probably didn’t understand that but she had her customer and she understood the people and she likes she likes people you know. I met her one time when she wanted to start a business. There wasn’t anybody else to sell to as far as she was concerned. You just came on we had a deal in a few minutes with a compensation deal. You know 15 seconds. She’s running as I’ve never been there and she I hope they’re there. I pay a lot of money for it as I did. Someday we’ll buy a business and I’ll just be some guy in a closet somebody amazing what triggers this month. I’ve never been there and I’ve met her and I’ve seen the results of what she’s done and she is in love with the company I don’t like the business of Berkshire acquired. Well the first thing I have to decide when somebody calls me is is valuing this business within my circle of competence. I don’t know how to value Microsoft. I don’t know how to value Oracle.

I mean if you know Larry Ellison calls me or Bill Gates called me and they go but if any of those I don’t know or biotech or any I would not value. I just you know I wish him well and tell him I think it’s worth twice as much of a negative. I’m just not in the mood to buy today. I don’t so it has to do with my shirt. My circle of common is that businesses I can understand when I say understand I don’t even understand how to use a computer or not use a computer in terms of a computer. I didn’t understand what the economic characteristics of a business are and what the company is really going to look like in five or 10 or 20 years. Bill Gates will tell you that that he is here investing he would buy her Berkshire rather than Microsoft because is so much easier to understand what our businesses are going to look like whereas he’s in a business where you really have to be doing things differently over time. So I know that Wrigley’s is going to be the number one chewing gum in the country I know Snicker’s going to be the number one handywork in the country ten years from now isn’t the number one candy bar for 40 years. You don’t have to be very bright to understand that when people lay out 50 cents for something that they stick in their mouth that they’re not about experiment. Yeah I mean it’s so we we try to look at business as we can understand. I got a call a year and a half ago from a fellow I never heard of them in Denver’s name was Craig Paranzino.

He called me up and never heard of him and he said I’ve got a business this year kind of business and I’m going to I want to sell it. There’s the reasons I we have to do with health. And I don’t pay much attention to the reasons. And he said it’s the leading company by far in the custom picture frame business. And he said let me tell you why it has what I call durable competitive advantage. That’s what I call it urban about it he says. Tell you why it has it. He said there are 18000 people. The framed pictures in the United States little mom and pop operations every town Lincoln will have half a dozen or more have a dozen or an eight day frame pictures. I go over to get a picture frame. I hand it to somebody I say you follow their judgment I say you know biggest thing I want is I want a good looking frame and I want I want it back so I want I want quick delivery. Over 18000 people in that business and a zillion kinds of picture frames. Nobody can carry a big inventory. They don’t do that much business. I mean it’s not Wal-Mart or something of a sort. Craig Paranzino graduate school in Wisconsin went to work in a tiny little firm that made these things five or six years later bought the place when it was doing three million dollars a year out of 300 million dollars a year and a totally dominates that wouldn’t custom for Amos’s. Why does it dominate it down age. Because it calls on these 18000 people has a sales force calling on them six or eight times a year.

And it has 22 plants around the country that can get a frame that the custom Kramer orders. Eighty five percent of the time they order by 5 o’clock that day they’ll have it by 3 o’clock tomorrow afternoon. Think of that car. That’s what the customer wants. They don’t care whether they pay eighty three dollars or eighty eight hours to get everything from a you know you’ve got something you want done and you want it done fast. In the end a little custom framing taking 2000 people they want happy customers that needs speed of delivery and certainly all that you couldn’t build a distribution system to compete with us. I mean you know it’s just like you’re trying to build distributions isn’t starting to scratch. That would take that business away from us it can’t be done. Well Craigslist had to be in about 15 minutes. I had never thought about the doesn’t frame it in the spotlight. You know I’d frame pictures or had people crying before me and I understood the power of that that was in my day. I said I think we can make a deal. He came on Wednesday. He came at nine o’clock and he left it on record. We had a deal. I never seen him since he got the money. Probably after he was going to come to the annual meeting last year. But his wife was sick on measures a good guy and no one could knock as often as every time I buy a business I say to myself if I had a billion dollars and I wanted to go and compete with these guys could I knock them off.

You know if you gave me a billion dollars and you told me to dislodge Snickers as the number one candy bar in the country I don’t know how to do it. If you tell me I’ve got a billion dollars I got to make it or. Five billion. I got to make it so that Wrigley’s spearmint you know that will mean Juicy Fruit. All of those get knocked off the top something Douglas. I can’t do it. If you give me a you know if you give me a billion dollars and tell me to knock off all the ladies apparel shops and I’m going to you know I’ll make mincemeat of them very fast. I mean I have a very good business myself but I can destroy that. And the real test is you know because some idiot with a lot of money destroy the business you got. If you decides to be with here and we we try to buy businesses where no matter who comes along you know they’ve got this durable competitive advantage. Those are the three words that count and you can make that. You may be able to make that decision about companies that I can’t make that decision about that they have to be pretty simple for me. We buy things that we have fruit of the Loom underwear. Are people going to quit wearing underwear clothes when we sell 44 percent of all the mens and boys underwear that goes through Wal-Mart and all of the mass merchandising chains. We have the lowest cost around for the loom as an aim has been Rossett 18 50 or 60.

If you can buy three pairs of shorts from monster with six EURES or whatever is her five and a half bucks and nobody’s going to solve sheepman why are going to buy anything else. Well all that is unless we mess up somewhere. We’ve got a very potent advertisings. So hard to cover the asses of the masses that. Yeah there. Or could you repeat that just a little a lot. I think that most of the time you again yell fluff OK. The question is why don’t since I say a one or two years doesn’t make much difference in business but long term. How do I play that my life. Well you know I could probably give you some terribly philosophical answer on it. But the truth is I get up every day and just do what I love doing. And you know I want people will Romney to have good experiences. But you know the truth is I don’t spend most of my time thinking about that. I mean I’ve spent most of my time thinking about what can I do to keep Berkshire going the way it has going. But I will tell you how to apply that and it works reasonably well I think that Berkshire because we get to sell selection of people that mean we have created a working environment we’re in 38 years nobody’s left that runs. So I know I do feel good about that. Obviously I feel good about the results of the investors and the officers and those people. I mean actually I think if they write a book about what’s happened with all the money that all these different people have made at Berkshire.

But I’ll tell you the test on that and it’s a terrific question. Because you will when you get to my age you will not measure how well you’ve done but how much money you’ve got. I can guarantee you that you will all do fine on money anyway. I mean you know think about it seven hours a day. You know you’re in a bad way. You’ve got exactly the same mattress I’ve got if you don’t sell it to the furniture mart. You know I mean so. So that mom who had parody I can’t I can’t outdo you you know in terms of my sleeping enjoyment. You can you can match it I buy you the factors which will give you a special price. Just mention my name. We eat at the same places. You know we had a Dairy Queen particularly if you’re in my position because we own it. We eat at McDonald’s and Burger King and when I leave here I’ll stop by a fast food place and we are eating insurgences. We travel the same. I mean I had a 10 year old car up till about a year ago and it just doesn’t make any difference to me at all. They all work. We live in a place that’s warm in the winter and it’s cool in the summer and we watch the Super Bowl on the screen. You do what I do. You know we dress more or less the same. I mean I pay more for my clothes but they look cheap. I put them on so we’re really on a parity.

So the money isn’t going to be that big a deal. Everybody in this country is going to know that with intelligence this group had the energy you have. You’re going to do well. So what’s was that it what really counts. Well I would say that you will measured health is enormously important and that’s a matter of a fair amount of luck. I mean are we. So I I don’t want I’m not shortchanging it I’m just saying you can’t do too much about that. But you will measure your success in life I was there. I how many. And he said what are the people you want. At 70 or whatever the age maybe you’ll measured by how many I’m really love you. You know in the end I mean you can’t you know you can’t buy love. I mean it doesn’t work you buy sex. My cousin O’Neill donors in my building you get all kinds of things but the only way you get involved is to be lovable. It’s kind of irritating actually about money. More fun to just write a check for more you know everybody you know from now on knows me but it doesn’t work that way. And in fact the only way is to be is to be lovable. And you know I’ve had this friend who who came out of Auschwitz and had a least one member of the family die there and but as it now it’s 60 years later. Now she’s still when she looks at people the Polish Drew when she looks at people the question she asked herself in determining who she really trusts as friends. One question in her mind is would they hide me.

When you get to be 70 you have a lot of people that would hide you. You’ve had a successful life. I know people who have a tremendous amount of money. No one would hide their own kids wouldn’t hide them. I mean they they really wouldn’t. I mean their business associates wouldn’t or anybody else if it really came down to it you know they that they don’t have anybody’s respect. They’ve got their attention maybe with money or something but nobody loves them and my friend Tom Murphy at capsid. I mean dozens of people would hide Murff you know all kinds of people would hide my wife. You know Ben Graham a lot of people would have my dad at that number and then like I say that I can I can tell you people that you know everybody may pay homage to him and the kids may put up with them and hope they don’t change their will or something but the truth is that nobody would hire them. And if you’ve got a lot of people that would hire you when you get to be 70 you will have a very successful life. OK right now we’re so just in terms of personal goals or how well I would know the truth is the main goal I have had has been at Berkshire. I mean it might be more admirable to say I didn’t I was feeding the poor somebody some someplace in. But it isn’t true. It it’s been the focus of my life. Most of the time the money will be used for very good purposes later.

I don’t use any real heart of myself but actually somebody else was going to do most of that. And I pick good people to do it. But I have got three kids of which I’m enormously proud and they and they like each other they get you know they do things together they work you know the family works extremely well. But my wife gets ninety nine point nine percent of the credit for that. I mean if you didn’t turn out well under her is really wrong. And it’s know it’s it’s a life. There’s a lot of fun but it’s I do what I enjoy doing. You know I I play like The Bridge on the internet because I like to do that more than anything else. I used to do way more reading. I do a lot of reading but I just read all the time. Now I spend 12 hours a week on the Internet vibration and I know it’s great. I will talk to the Microsoft summit here in about a month and I tell this group there’s all these high powered internet types and I tell them look at you know you guys are all failures. Here I am got all kinds of money. You know I don’t fool with the internet after 10 or 12 years I spend 12 or 14 hours a week on it mostly bridge. But I do the Google searches and I’m writing a talk. I will I will do all kinds of information on it. And I read the New York Times The Wall Street Journal tower the night before all these things you guys are getting exactly 120 bucks a year out of me. And that is a failure.

They have not figured out how to get any money out of me and I gained this last year. And this year I’m back and say you made no progress at all. And you know 20 bucks last year this year and in between I had 600 hours of enjoyment. Nerd all kinds of things. So I do enjoy you know I enjoy that morning when I was young I had a lot of money and you know I don’t know professional sports even I play golf all the time maybe have my own private golf course. All kinds of things. He thanked me a I have something where 365 days a year. Everything is good. I work around terrific people here today that cable had broken down. And I mean I get to select the people I work with that’s a huge huge lottery. I literally just think that had to work for a boss you couldn’t stand our ground people because your stomach churn. It is what I mean to be miserable. The ultimate luxury really is doing something every day that you love doing with people that you be doing it with. And I got that by accident. I said you if you if you take on a job just to make a lot of money and because you’re someone that you’re you you and I don’t kick the dog in was sort of thing you know that that’s a little bit like marrying for money. You know this is probably a bad idea under any circumstances but if you’re already rich it’s crazy right.

I mean if I marry for money I mean I have examined what’s it going to do you know. And so it’s you know it’s it is. And we’re lucky in this country. I mean we won what I call the ovarian lottery one we were born in this country. It was four times more likely to have been born in China just like we had been born of Bangladesh. You’re born the greatest insight in the world so make the most of it and have a good time. See who’s had. OK. Up there you guys are invited out. Well yeah. Good question. I always say well I love it. And you know my my grandfather went to Central High. My dad went there. My wife went there my kids went there and now our grandchildren are there. They are my grandchildren. So they have the same teacher that my granddaughter. But there’s continuity there’s friends there are all kinds of things. I mean there’s no disadvantage to being an orphan. I mean I like New York when I’m married at a house in California you know and I get around some but I can’t imagine anything better. I mean I you know what. What doesn’t it have I have a home. I never sold a house in my life. I have a home I’m moved into a 1958. So I’ve been there about 45 years or so. I’m five minutes from the office. I move into the office in 1962 and are 41 here. We’ve just gotten so we take it we take a whole for 41 years where we can use a whole floor kind of discouraging.

But there there I am five minutes we. Everything is easy and all works. And all I know the doctors all my life and I want everybody to feel connected. I had taught in the public school system and I’m alive. I named a scholar prize that I get after her. But I mean it all means something. And I lived in New York for a couple of years I’ve been to Washington D.C. for some years and never felt that kind of connection at all. So there is absolutely no disadvantage. I get the same information. Actually with the with the Internet and Bloomberg and all that I know I can get any information any faster than I can get it. There’s just no downside. And I think it’s been a terrific environment for my kids to grow up in. I mean my kids are growing up in a neighborhood perfectly normal neighborhood. I mean you know open houses around it. No no no golden ghettos or anything of the sort. It Gandu an integrated public school. School has probably had as many 20 30 percent black students for 75 years. They had great teachers. I mean I think that you know part of education is a total life experience. And I think it’s great that we have a public school system and a small island in Washington or Los Angeles or New York that is and I get the private school. I would not do that. I do it because I wouldn’t send them to a vastly inferior school just to prove some point. But the nice thing about it and make that choice Sonoma.

I’ve got classy public schools the same kind of up to 50 or 60 years ago and they get more out of that experience in my view have a better balanced view of life. Going through that experience you know I sent them off to some private school. I was with actually last week. There were six couples. Bill Melinda Gates arranged it and they had the headmaster of a private school in Seattle that the bell went to. It’s a class school but you know if you read I gather from that in terms of the public school system that you’re making a conscious decision to hurt your kid if you don’t send them to a private school if you can afford one. And that’s what these people do. And I don’t blame them. I do the same thing. But the nice thing about it is that on I’m sure LinkedIn as well and throughout in Nebraska we have kept a good public school system. Frankly I think that’s where the most important things in America. Because one of the things that has made America what it is thinking about it the 1776 three million people in America 300 million people in China and a hundred times as many people had the same IQ as we had. You know they had the same physical abilities and all that sort of thing. They had a culture of the work far back they had lots of natural resources. We didn’t know a lot of them because we didn’t have oil and they didn’t have oil but we both had oil and coal.

All of these things you lie in educational institutions are far surpassed ours at the time and now we end up 200 30 years later we end up with know thirty six or seven percent of the world’s GDP. And from those three million people something about the system really works. And I think one of the things that worries about as it is we come closer to equality of opportunity than any major country in the world. But one of the keys to having equal opportunity is a good public school system. You have one public school system for the rich one for the poor. You do not have equality of opportunity. And so it is really one of the top things on my list I got asked about you know what you can do with money. I think that anything that creates equality of opportunity right from the word go I’m talking about from when you’re five years old and actually my daughter is working on something that goes back before that. But anything that crazy equality of opportunity is what’s going to keep America what kind of America that we have now. It’s it’s vital and nothing more important than that than having a first class public school system. And unfortunately the communities where they’ve lost it don’t get it back. I say that about Sandy.

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