(As is standard, no recording equipment was used to reproduce these notes. My high school typing teacher gets all the credit. As aresult, these notes are recollections only – not quotes, and should not be relied upon. –PB)
WB interviewing Hank Paulson in an Omaha Business Event, saying the best summary of the credit crisis he had seen was the comment by George Bush during the Crisis: “If money doesn’t loosen up, this sucker is going down. “
CM To Westlake Harvard School
“At a young age, I realized that I couldn’t play six grandmasters blindfolded. So Idecided to avoid the mistakes that most people make. Many think we at Berkshire havefound some trick. We haven’t. Instead, we ignore the lesser choices, the mistakes. It’snot brilliance, it’s just avoiding stupidity. Life is about avoiding mistakes, andconsidering opportunity cost. Most need one rabbit, one horse – they wantdiversification. Life is not about that. When you picked your wife, you picked the bestwho would take you. We should live the rest of our lives like that.”
[WB & CM walk onstage]
WB: Good morning, I’m Warren he’s Charlie. He can hear, I can see – we work together for that reason. In the movie, my fastball was filmed in slow motion – they triedit the regular way and you couldn’t see it!We’ll announce earnings, and directors, then have questions until noon. Then until 3:30we’ll take questions again, then after we’ll have the election of directors. I’m introducingdirectors now. Hold your applause till the end. Howard Buffett. New Director SteveBurke. Susan Decker. Bill Gates. David Sanford Gottesman. Don Keough is not here –he had an operation but is recovering very well. Tom Murphy. Ron Olson. WalterScott.Preliminary earnings for Q1 are up on slide. What we are seeing is that a sputteringrecovery has picked up. Our industrials, like Marmon and Iscar and the railroad, areseeing good uptake. What was spotty - now trends are stronger in last few months. Notas good as previous years, but better than sputtering. We encourage you to focus onoperating earnings. In any quarter, the derivatives are meaningless. We don’t put downEPS on this slide, and we aren’t focused on those numbers in any quarter or year. We arefocused on build-up of value. We think the focus on quarterly earnings is not good forinvestors, but and really bad for managers. We think they might fudge if they need to hitsomething. There was a very interesting study a few months ago, where they took it outone further digit – past a penny. A statistically impossible number of 4s showed up [toofew] – it was not an accident. They stretched for the round-up. We think in our view it isa terrible practice to report to some penny you whispered to some analyst months before.We carry this to an extreme at Berkshire, we think about building value as a whole.Charlie may want to weigh in?