Berkshire Hathaway Annual Meeting May 3, 2008 (Notes taken by Professor David Kass and Professor Susan White

, Finance Department, University of Maryland) A one hour humorous film was shown which featured a Charlie Munger (CM) cartoon character running for President on the “Financial Independence” Party ticket. Walter Cronkite (cartoon character) reported that CM was far ahead of the other three major candidates (cartoon characters of Barack Obama, Hillary Clinton, and John McCain) in the latest polls. Near the end of the film, Becky Quick of CNBC announced that Warren Buffett (WB) was leaving Berkshire Hathaway to switch jobs with Susan Lucci, the TV star of “All My Children”. Warren Buffett then appeared in an episode of “All My Children” along with Susan Lucci. (This episode was subsequently broadcast on ABC the following week.) After the film, CM came on stage and sat in one of the two chairs. Then Susan Lucci appeared and sat in the other chair. She announced that she was the new CEO of Berkshire Hathaway. CM then remarked “I must admit you possess certain attributes that your predecessor lacked”. Susan Lucci then took her first action as CEO by declaring an initial dividend on Berkshire stock. The shareholders enthusiastically applauded. She also announced that she was raising the pay of the Board of Directors from the current level of $900 per year. The directors then stood up and cheered. At this point, WB appeared on stage, tore up a piece of paper, and said he was still CEO of Berkshire, and the company will not be paying any dividends. WB then announced that there were 31,000 in attendance, setting a new record. Last year 27,000 attended. WB then started accepting questions from the shareholders. Questions were asked on a first come, first served basis at 13 microphones. Questions and answers are paraphrased. (1) How can investors become less like lemmings and avoid the crowd mind set. CM: Become less like a lemon. WB: Read everything in sight. He said he began reading at 6 or 7 and read Ben Graham’s Intelligent Investor at age 19 and it changed his life, particularly Chapters 8 and 20. He said you can’t get a bad result if you follow Ben Graham. When you own shares of stock, you own part of a business. You should let the market serve you. WB has a “margin of safety” when he purchases shares. He and Charlie worked for their grandfather’s store (Cousin Bill Buffett has written a book about the grocery store.) He said his grandfather was negative on stocks and big on working hard, which is why they quit working for the grocery store.

CM: WB was against the formation of option exchanges. CM: Berkshire does not operate sweatshops. our job is to retain them. The market should not influence you. Many people go to church and their donations mean they can’t do something else. If we knew. Shoe production was in Maine – a bunch of Imelda Marcuses in the U. ideology. (5) How do you use options? WB: If we want the stock.S. WB: We rely on our managers to be ethical. we buy that.2 (2) What are the expectations for BRK’s purchase of the Cologne Re-insurance company? WB: To grow the company and better integrate its operations into Berkshire Hathaway. WB said he gave from excess. We don’t select good managers. we’d play S&P futures. She then died the following year – this is a lesson to our managers! CM: We always keep a few million dollars around in case a good opportunity comes up. For investment success. . Fruit of the Loom’s competitors have sweatshops. you should buy the right businesses at the right prices. are most likely to make dumb charitable gifts. left or right. (6) You are both very generous. (7) What is your level of involvement when the company has an ethical dilemma. He said his sister Doris gave from necessity and also gave of her time. There are 250. You can see passion in their eyes.000 employees working for Berkshire Hathaway. for example. but serve you. (4) How do you select good managers? WB: We buy companies with good managers in place. The professors know formulas and need to teach them to fill the class time– like someone in the priesthood in finance. B (Blumkin) of Nebraska Furniture Mart worked until the age of 102. CM: Those who are at the extreme. but was moved to China for cost reasons. WB: Teaching option pricing is nonsense. and has nothing to do with eventual success. not options. It’s not what we do. Our managers love their businesses. They’re turning stock markets into gambling markets so the croupiers can make more money. Mrs. (3) Where is the market going? WB: Charlie and I don’t know where the market is going. What are the joys of giving or the pitfalls of donating? WB: I never gave anything that made a difference to my standard of living. not necessity and that those who gave from necessity were truly charitable. with only 19 at corporate headquarters. You need to know how to value businesses and assess the stock market..

Those asking the questions said they have been treated better this year than the previous year.” WB works with a trainer three times a week for 45 minutes each time. the audience was getting very restless. This is the best country in the world. but they won’t produce the returns that they have in the past. CEO’s are not being paid a market price.See’s. We follow the public utility commission rules. PacifiCorp. (10) First of three questions about the Klamath River dams in Oregon. but we’ll make more money over time.) Second question about toxicity of fish. He called on Dave Sokol to address these questions.. In the carpet business. There are some jobs that he would pay to get. BRK made an agreement not to interfere with the four dams. We can purchase 5% of a $10 billion company for $500 million. . (WB looked very bored during Dave’s answering of this question. (9) What will BRK’s return on investment be in the future? WB: Berkshire’s return will be lower than what we achieved in the past. CM: Has no health or dietary rules and does not plan to change. and Coke . Mars. I’ll be happy with a 10% return. owned by PacifiCorp. CM: You can take Warren’s words to the bank. built over 100 years ago. Dave said many other lakes in the area also have algae problems. asked about Chinese tungsten prices going up – will this have an impact on Iscar’s machine tool production? WB: We built the Iscar China plant to serve the Chinese market. WB: We can’t make decisions. But Iscar has succeeded and was a terrific acquisition. with a web site. not because of the price of tungsten. They would stay in their jobs at ¼ or ½ their pay since they would not be able to get better jobs elsewhere. (11) How do you maintain your mental and physical health? WB: (as he put a piece of candy in his mouth): I eat a balanced diet -. and WB said he would take no more questions on this subject.3 (8) Mike of California. CM: I don’t like inflation. WB is 77 and CM is 84. It’s bad for civilization. At the time of the purchase. We need to lower expectations. the costs of inputs are hard to pass along. polluting the waterways and killing the salmon. financial fogorn. but not indecent. first class businesses. Shareholders with small amounts of money and lots of time can find better opportunities. Will you make PacifiCorp accountable? (Problem of green/blue algae. We’ll get decent results. Berkshire is limited to investing in large companies. was a 2005 acquisition of Berkshire By the third question. WB: We’ll continue to buy large. For his mental health: “I do what I love every day with people who love their jobs.

and paid with cash. He read his father’s investment books.5% the next. There are some inefficiencies (“market dislocations”) that they have taken advantage of.4 (12) German high school student: What should I do with the rest of my life? WB: I would choose the same life over again. she was looking for the perfect man. introverted part of the population? WB: I was terrified of public speaking. that’s themselves. then went home and stopped payment on the check. WB specifically mentioned mispriced municipal bonds. he wouldn’t have been as enthused. He told the story of the man who spent most of his life looking for the perfect woman. WB: BRK entered the municipal bond reinsurance business in the first quarter of 2008. WB: Will leave you the joy of searching for those opportunities. WB: Ben Graham did this in the 20s. He said he was lucky that he found his passion early. at a yield of 3. Go to work for an individual you admire – for many people. It’s like waiting at a stream to spear fish. WB has bought long in attractive companies and shorted the market in general. He finally found her. . He made money 4 out of 5 times. but unfortunately. It is important to communicate well both in writing and speaking. The reinsurance company is the only one they created from scratch and became a big business. CM: We made our money by being long in wonderful businesses. 4% the next. CM: The dislocations are extreme but the opportunities are brief. then 8%. If his father had been a minister. CM: Most small businesses never get big. and that it was a great time to make money. Get the right spouse. his life would have been very different. but the fifth time killed him. It’s better to do something simple and important than something foolish and unimportant. (15) Question about the subprime crisis and how to take advantage of it. It is helpful to teach and get up in front of people. once a year. then 10%. and having an aptitude for that something is better. when a fish comes by once a week. Then I signed up a second time. His advice to the young man was to find his passion. CM: You can do better if you develop a passion for something. CM: It’s good to have an education. (14) Question about the strategy of buying long and short in the same industry (pair trading). 3. and then 4. If Warren had had a passion for ballet. I signed up for a Dale Carnegie course. (16) How to grow a small business? WB: it takes time. most big companies fade. He said the mispricing occurred when billions of dollars of municipal bonds were sold as a result of margin calls.15% one week. He mentioned a particular bond. and they’re buying BRK’s secondary insurance at a higher cost than their primary insurance. (13) What is your advice to the quieter. Their insurance is being purchased by a lot of munis that already had insurance. WB worked for Ben Graham for two years. or once every 10 years.2%.

sell to Berkshire Hathaway.S. you will find out what is most interesting to you. (18) From a 12 year old from Philadelphia: What should I be reading? There are a lot of things they don’t teach in school that I should know. WB: There are some very mispriced bonds. (21) Eric from New York had a follow up to a question he had the previous year. CM: He prefers companies drowning in cash. dollars? WB: I’m happy to invest in businesses that earn money in Euros. What do you look at? WB: Will financial statements tell me enough? Most of the time. BRK does not hedge its foreign businesses – we’re not in the business of hedging. But if I understand the business and I can buy at 40% of what I consider to be a good price. etc. (20) How should you hedge U. but no one proposes taxing farmers because the price of food has gone up. the most logical choice. Of that amount. $500 million is earned internationally. If it’s a good private business and it wants to stay that way. Through reading. will continue to follow its current policies that will weaken the dollar. fine. since I know the business. who started and runs this business. What do you think of social security? What would be your position if you were a presidential candidate? WB: All three candidates pander to the voters and don’t understand economics. Some propose taxing ExxonMobil because the price of oil has gone up. more than all other firms in this industry (MBIA. WB: Read the daily newspaper.) (17) You have said that sometimes you make investment decisions solely on the basis of reading financial statements. Quoted Bill Buckley: if elected. (19) Do you want companies with lower profits but high growth or those with higher profits and lower growth? WB: We want companies with a durable competitive advantage. . then I have a margin of safety. AMBAC. (22) Doctor from an infertility center – he’s in the business of helping make babies to help social security’s solvency problem. But if they want to sell. The municipal reinsurance business collected $400 million in premiums in the first quarter. CM: Sell what you have created to a good steward. I can just look at the financial statements of Wrigley.S. BRK owns 200 million shares of Coca-Cola. buying and holding stocks. BRK will be looking in Europe later this month for private companies that may want to buy. The more you learn. the more you’ll want to learn. which earns $3 per share. Should you invest in non-stock investments vs. no.5 His best business decision was the fee paid to the executive recruiter who brought them Ajit (Jain). or $600 million (for BRK). What should you do with small sums. This doesn’t make a big difference to BRK but would to small investors. CM: This young person has already figured out how to succeed in life. The U.

This is true for the country as well. (25) Boys Town head. age faster – at 2% per year. we only age 1 ¼% per year. other than having. CM: After Enron. He’s read that BRK is a troublesome advertiser. We have three good candidates. What company should you buy stock in – one that will do well even if idiots run it. BRK could have put 100% of its net worth in Capital Cities Broadcasting in early 1974 when the stock was selling for 1/3 or ¼ of what its properties were worth. The process is corrupting.) (27) Oil resources will run out by the end of the century. WB: I have a job I love. CM: (age 84) We still have this rising young man. WB: The secret of investing is not to diversify. Their investments had to converge and would have worked out if they could have played out their hand. Warren Buffett (only 77). WB: We have three CEO candidates all of whom will do better than me. asked about keeping toxicity off TV. we have four candidates. There will be no gap after my death. (24) Question about diversification WB: Investing 75% of your net worth is not a problem if this is something you believe in. and enough stock so I will keep the job. He predicted changes in regulations that won’t work perfectly. separate IRA accounts. (23) What is the plan for CEO succession. you might want to keep assets separate. Investing 500% of your net worth is a problem. I might have a different answer if I were making a pitch. People only listen to ideas in short form. Should their assets be separated? WB: Better to look at it altogether. Our secret is to find places where it’s okay not to diversify. BRK could also have put 100% of its net worth into Coca-Cola in 1988. Diversification (across time and equities) is for the know nothing investor. When the time comes. They do not have offensive ads. If you’re just starting out. This was like shooting an elephant with a pea shooter. I don’t get into marital counseling often. representing Parents Television Council. so I’ll turn it over to Charlie (who had no comment. as required.6 I’d demand a recount. For Chief Investment Officer. WB: BRK’s highest spender on advertising is Geico. Many people have 100% of their net worth in BRK and have had it there for 40 years. or before. (26) Deborah from New Jersey spends full time managing her and her husband’s money. There will be someone more energetic. WB: At an average age of 80. CM: Students go to elite schools where they learn the whole secret is diversification. while companies with executives at age 50. we’ll pick someone reasonably young. all of whom have good jobs now. Congress passed Sarbanes Oxley. and we want to encourage him to reach his full potential. How will it all play out? World War III? Alternate energy sources? . LTCM invested 25 times its net worth.

They don’t even have the right approach. WB: Massive retirement program. Tax the middle class less and the super rich more. we should have bought all of the Middle East’s oil and put it in the ground here. CM: Keep up with the Buffetts. Stocks outperform bonds over time. even if everyone else is. In the 30s. we’ll use sun power. It’s stupid to use up our reserves as fast as we are doing. who had fled the country.000 derivative contracts. he saw Salomon trading with Mark Rich. Demand will taper down as the supply goes down. CM: As an industry. there’s a crazy culture of greed and over-reaching. When BRK acquired General Re. you have to prove that something works. and there will be some pain in the process. what should you do. After the first question period there was an hour’s lunch break. The traders said they were making money. what asset classes and what percents? WB: Put it all in a low cost index fund such as Vanguard. The accounting profession failed us. I don’t advocate extreme frugality. Demand is not going to go down. CM: Eventually. Just don’t spend 105% of your income. In the drug business. The world will adjust.7 WB: Oil will not run out suddenly. evil. forget it and go back to work. when WB came in. And we’re still not doing this. Many financial advisors take croupiers profits by pretending to be professionals. The accounting people failed us. (28) Name three difficult policy decisions and three perfect solutions. WB: Children will follow the example of their parents – if parents increase their cost of living without improving the standard of living. but they still didn’t catch the two worst accounting misrepresentations in the history of the world. Capacity will level off and decline gradually. It’s okay to spend on a great Disney vacation when you’re young that everyone will remember. say 30 years old. (30) Tim from Austin: How do you resist the temptation to keep up with the Joneses – advice on work ethic. We have less surplus capacity than ever. a million in the bank but not a full time investor. You need the man at the top to say we don’t do risky things. I don’t think more commercial bank regulation will help. frugality and debt. WB: At Salomon. WB: China is selling 10 million cars. Fannie and Freddie had a lot of oversight by 200 people at OFHEO. (29) If you are a small investor. CM: Turning corn into fuel is a dumb idea. Buffett had to send out a . Wall Street believes in the tooth fairy – it’s a crazy culture and to some extent. The big IB’s are too big to manage effectively. not even slim risk. How much risk would they represent under extreme conditions? WB wants no risk. it had 23. There is nothing we can do to wean the world off oil. Being “too big to fail” has policy implications. (31) Are investment banks so complex that the head is not aware of the risks? WB: He is the chief risk officer at Berkshire. They have “good until reached for” assets. CM: Don’t judge stock brokers by the ones that are at this meeting.

(34) When you are gone and BRK stock held in trust is sold. 10. You don’t have to carry out the analysis to three decimal places. It’s safer to do it our way. (33) Do you believe in Jesus? WB: I grew up in a religious household. and all you did was read an annual report. but I know he’s fat. There would have been a spectacle. didn’t talk to any brokerage houses. There’s a lot of trivia that doesn’t need analysis. (32) You invested $500 million in Petro China. CM: We have lower due diligence expenses but less trouble than others who pay more for due diligence. I don’t know how much he weighs. It can’t happen for years after I die. CM: What Warren wants people to say at his funeral is “that’s the oldest looking corpse I’ve ever seen. I’ve made mistakes but none that would have been prevented by due diligence. didn’t talk to management. WB: I only read the report.5 billion worth of contracts would have had to be undone to establish damages. Coke sells a billion 8 ounce servings a day.” (35) Why is Kraft a good business? WB: Most food companies are – they have good profits. I want companies that are fat. CM: I don’t want to talk about my religion. Coca-Cola was introduced in 1886 and is sold around the world. WB’s due diligence was going out and sampling the candy bars all day. There would have been 4 or 5 hours to unwind contracts. what is to prevent a hedge fund from taking over and breaking up the company? WB: This is not likely – Berkshire Hathaway is too big. $100 billion in value was selling for $35 billion – what’s the sense of talking to management? If I thought it was worth only $40 billion. Buffett has the ability to say yes to a deal with no contingencies like obtaining financing. the next day $14. If I see someone weighing 300-350 pounds. Had Bear Stearns failed. When the world doesn’t want to lend you money. or worrying that Ben Bernanke will run off to South America with Paris Hilton. There are hundreds of colas – who is going to buy an unknown product for a penny or two less? If you buy a good brand. It wasn’t hard to understand the operation. . 20 or 40 basis points doesn’t matter. Branson brought in Virgin Cola – a strange kind of promise. and don’t pay too much. More analysis was a waste of time. There is a ten year distribution period that begins only after the estate doesn’t last. Branded products in general are good assets. Another investment bank or two would have gone down. then it would have been worthwhile to refine the analysis. WB: Being agnostic means I don’t have to talk about my religion. you’ll do well. It is impossible to take on Coke. The Mars people wanted to deal only with Berkshire Hathaway. WB: He got a call on the Mars/Wrigley deal. We think like engineers – we want margins of reliability.8 directive forbidding the trading. but I am an agnostic.

In mid sentence. A lot of people have most of their net worth in BRK. CM: BRK is very risk averse. We’re stressed by imperfections in China. CM: Warren understates my position. we have done as much to the planet as any other country. (40) If you buy small banks..9 (36) How will you select the four investment professionals who will run the Berkshire Hathaway portfolio? WB: This is detailed in the 2006 annual report. Per capita. but are still dependent on coal. for example. It’s hard for us to go about preaching. we don’t do start ups. We want people with good records. You can have PhDs do dumb things. what do you need to know? WB: You should know the culture of the institution and the DNA of the institution – so they will be immune from institutional stupidity – like Wells Fargo. For many companies. but if they didn’t like our credit.S.S. You need someone you can trust with reasonable analytic skills. we wouldn’t know for months because we have so much liquidity. but this is not sufficient. Solving the problem will require cooperation and leadership. It’s wrong to pick the worst thing about a country you don’t like and obsess about it. I have an environmental reason for this – oil is more important to feeding the world. we may say. the chief risk officer is a guy who makes you feel good while you do dumb things. forget it. BRK companies use wind power. Bancorp. but I do. CM: we can make a lot of decisions about a lot of things very fast because there are a lot of things we won’t allow us to think about. but they’ve just clobbered their own heads. withdraw sponsorship of the Beijing Olympics? WB: Everyone should participate in the Olympics. We earn a decent return on capital – what’s an extra percentage point? (37) Professional investors should act quickly and decisively. like torture some mathematical model when the real world doesn’t fit into it. WB: We want to run BRK so it will run well even if the world changes. China is moving in the right direction. No rational person will worry about our credit. U. (39) What are future trends in coal? Does the cost advantage outweigh the environmental impact? WB: We will figure out better ways to do what coal does. other alternative sources of energy. who can contemplate problems that have not yet occurred. Most people don’t think that way. What companies act in a day or two? Why invest in Korea or China? WB: Some people think we’re rude – we’re just not wasting their time. (38) Should the U. They think they’ve clobbered risk. On balance they contribute to a better world. We need a leader who can gain cooperation. I’d rather use the coal first. CM: With coal and oil. It’s a tough problem to solve. and .

a minor league team. (45) What are WB’s reasons for going to Germany? WB: We want more family owners. CM: Germany has a particularly advanced civilization. We’ve been very lucky since 1945. We want to be more prominent in Europe. change the oil. all to make it last a lifetime. and how can this be corrected? WB: The country’s net worth is up in real terms.10 M&T Bank (BRK’s equity holdings in this area). He recommended the books “Influence: The Power of Persuasion” and “Yes” by Robert Cialdini (43) Andrew. but the catch is that it is the only car you will get for the rest of your life. but she took it as a sign to continue. they won’t pick the person with the highest IQ. Leaders are effective because people want to be around them. For millennia. who when they feel the need to monetize their business. If you own BRK stock. You get one body and one mind to last a lifetime – treat it well. Finally. WB asked her what her question was – what else should she be doing? WB: The most important investment is in yourself. We are so rich. CM: Teach them to avoid being manipulated to their disadvantage by vendors and lenders. I like a quote that’s not mine – “there are more banks than bankers”. (BRK owns the Omaha Royals. 9 years old from Chicago said he is a big baseball fan and would WB like to buy the Chicago Cubs from Sam Zell? WB: Cable TV has expanded baseball’s market. CM: The population of Mexico suffered a 95% decline when the Europeans came and a civilization was destroyed. CM: We already own one. He tells high school students. since the company doesn’t pay a dividend. you are automatically saving. . CM: That’s a territory that has some promise. but it didn’t wipe out the species. (41) How can further nuclear proliferation be prevented? WB: The genie is out of the bottle. How will you treat it? You’ll keep it garaged. the ability to do widespread damage has been limited. WB would not be interested at that price. we are their best call. We live in a very dangerous world. More people know how to do enormous damage. They’ll pick the one who will be the most effective. As a rich country. we may not need to save as much. If they care about the business. People buy baseball teams for psychic income and instant celebrity and recognition. The group applauded to get her to be quiet. the average American’s standard of living is going to increase in real terms.) (44) Americans don’t save while Asians save 40%. imagine that you’re 16 and I’ll give you any car you want. If you ask a class what person they’d like to own 10% of. The Cubs would sell for $700 million. WB: That’s a wildly bullish statement from Charlie. will think of Berkshire Hathaway. (42) Eliza from Florida teaches at a community college and endlessly recited what she does in her class. Why don’t Americans save.

Costco paid no dividends when they were growing rapidly. then the counterparty is down. For many companies. WB: Charlie 1. Invisible Hand 0 (51) 12 year old – why doesn’t Berkshire Hathaway pay dividends? Your mentor believed in dividends. it’s all right. CM: Warren pays a dividend in the mode of St. (47) What can be done to improve the accuracy of financial statements of financial institutions? What can be done to improve the integrity of financial statements? WB: Often it’s hard to determine fair value. Augustine: “God give me chastity. (49)What is the future of mass transit? WB: The American public doesn’t like mass transit. (50) Question about Credit Default Swaps (CDS) and the credit risk market. if you are up. WB: I do believe in dividends. CM: People overdosed on Ayn Rand. See’s distributes all of their earnings to BRK – the company doesn’t have better uses for it. the country would have worked better. If the phrase. We’re unlikely to see a large movement to mass transit. CM:: The credit default swap market is insurance against a company going bankrupt. but not yet. WB talked about the problems of packaging mortgages in such a complicated way that no one could understand them or truly be informed. CM: The online grocery delivery business (which failed was a lot smarter than what the mortgage companies did. Politicians are never so bad that you don’t live to want them back. then don’t pay a dividend. Chances of problems have been reduced by the Fed stepping in for Bear Stearns. One person to a car is too popular. “this is a financial innovation that will diversify risk” were banned. If you can continue to create more than a $1 for every dollar invested. they’re better off if they retain their earnings. Greenspan overdosed on Ayn Rand – if it happens in the free market. (48) Statement about property rights that was not understandable – when the individual said he was making a statement and didn’t have a question. pay a lot to park and pay $4 a gallon for gas. he left the podium. CDS are a zero sum game. People want to get in a car.11 (46) Do the current economic stresses remind you of any prior period? WB: This crisis has more of its origins in mortgages and the residential real estate field. CM: You have a more optimistic view than I do.” (52) 8th grader from Texas: Will you invest in any business in China and India in the near future? .

Then both the price of oil and PetroChina went up. Ben Graham. CM: The English had a high tax rate against the wealthy. CM: To see Berkshire Hathaway as more of an exemplar and to have more influence on other companies. you double down.S. If you have the right spouse. And. who’s told to get rid of this nuthead. He devoured books. An individual investor can’t do much – a well-written letter is given to the corporate secretary. in the next few years. BRK sold PetroChina when oil was $75/barrel. Smith School of Business University of Maryland College Park. WB: If you have the right parents. Maryland 20742 . People taking compensation have a moral duty not to take it.12 WB: Odds against. CM: Approves of Confucius’ reverence for elderly males WB: You need to dig yourself out by adding elderly females. except in the U. Now. CM: It was Confucius’ idea. which was counterproductive. If the price declines further from current levels (about ½ of its peak price). but worth $100 billion. Many people believe Ben Franklin learned a lot from him. Dave Dodd. (53)What are 2 or 3 important influences on you? WB: His father. (54) What can be done about outrageous executive salaries? WB: We can’t do much on compensation. Charlie learned a lot from Ben Franklin. I like to read – you learn what you want at a speed that works.S. The politics of envy ruins the economic system. Professor David Kass Professor Susan White Finance Department Robert H. (55) You did a quick trade of PetroChina. (56) What is your fondest hope for Berkshire Hathaway? WB: I want people who want to sell their businesses to think of Berkshire Hathaway. It is difficult to buy companies in any country outside of the U. there’s something to that. Envy makes you feel worse and the person you’re envious of may even feel better. to have the oldest living managers. We might buy one or 2 companies outside the U. gluttony. CM: People learn in different ways. Ben Graham bemoaned the fact that investors were a bunch of sheep – I don’t see much difference with institutional investors. you’re very lucky. not your usual buy and hold. I wouldn’t rule it out. Conceptual stuff you learn from books.S. BRK could buy it back. A few years later PetroChina had the largest market cap in the world (over $300 billion). Why? WB: BRK bought PetroChina when it was selling for $35 billion. The institutional investors can do something in a few cases – issue statements – the company doesn’t want bad press.

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