2024 年股东大会 · 下午场

Berkshire shareholders are unusually generous with philanthropic contributions

WARREN BUFFETTSo please take your seats. Were going to finish at 3 so the sooner we start, the sooner - more chance well have to talk about various questions you may have. Id just like to follow on however with that film we showed just before we left for lunch because it says something about Berkshire. There are, you know, all kinds of public companies and wealthy public companies and - throughout America. And there are certainly cases where in one family somebodys made a very large amount of money and is devoting it to philanthropy, or much of it to philanthropy, such as the Walton family would be the number one thing in the - in Walmart. And certainly Bill did the same thing at - Bill Gates - did the same thing at Microsoft. But what is unusual about Berkshire is that a very significant number of Berkshire shareholders, located all over the United States - not just in Omaha - but the number of different Berkshire holders who have contributed a hundred million dollars or more to their local charities - usually with people not knowing about it - I think is many multiples of any other public company in the country. Its not more multiples than - you know, Bills put a whole lot into philanthropy. (Applause) And I dont know the details of the family, but clearly theres a huge sum of money that the Walmart family, Im sure, has done all kinds of things philanthropic and will continue to do it. But I dont think youll find any company where a group of shareholders who arent related to each other, so many of them, have done something along the lines of what Ruth [Gottesman] did, you know, a few weeks ago. Just to exchange a little piece of paper that theyve held for five decades - and theyve lived well themselves. They havent denied their family anything. But they dont feel that they have to create a dynasty or anything and they give it back to society. And a great many do it anonymously. They do it in many states. To some extent we see a little - some concentration of it in Nebraska because, generally - When youre giving away a lot of money they call it - in the philanthropic world - they call it, absorption capacity. And the truth is its very hard to give away a billion dollars, 10 dollars at a time, to people who are needy or something of the sort. And so large institutions have this absorption capacity, which tend to be universities or colleges or that sort of thing. And some philanthropies are much more imaginative than others. But the one thing - Ive never - well, most of them want to do it anonymously so I cant tell their specific stories. But I have to say one thing that was astounding is that the same day we bought a billion dollars worth of Berkshire Class A stock from Ruth so that - and I guess we were actually buying it from the school at that point because shed just given them the - so the transaction was them - was with them - but Mark Millard in our office bought a billion dollars from them, but he also bought 500 million dollars worth of stock from somebody else that nobody will ever have heard of and - in a different state - and I wont elaborate beyond that. But we have had a very significant number of people, and theres more to come. And obviously they had to be people that came in early, or their parents did, or their grandparents did. But theyve all lived good lives. They havent denied themselves anything. I mean, you know, they have second homes and they - but they - they generally - well, in fact I would say almost universally they - people knew them in the community and everything, but theyve used what they accomp - what they saved. They denied themselves consumption, themselves. Thats what savings are, is consumption deferred. And they've - theyve given - they've financed everything, all over the country. And usually, they like to do it anonymously. I outed my sister when I wrote about her in the annual report, but Berties here today. And I told her she should wear a t-shirt or something that said no solicitors allowed, or something that - (laughter) - but they - But they just do it. And its really - both Charlie and I felt its really - it's really fun to work for a group of people like that rather than for index funds or for hedge funds or whatever it may be. I mean, youre just seeing what people actually - it sort of restores your faith in humanity that people defer their own consumption within a family for decades and decades, and then they can do something like enable, I think it may end up being 150 people, to pursue different lives - and talented people and diverse people - to become a dream of being a doctor and not have to incur incredible debt to do it or whatever may be the case. Theres a million different examples. And I want you to know that youre very - you're very - well, youre a unique, actually, group of shareholders among public companies, as far as I know, in terms of the way youve deferred your own consumption, while living fine, to help other people. And it - you know, it takes a lot of years, but it can really amount to something very substantial. And what Ruth did was - you know, at roughly my age she looked at a little piece of paper which actually was a claim check on the output of others in the future and she said instead of the output being for her that the output would be for a continuing stream of people for decades and decades and decades to come that were having a different life in the pursuit of becoming doctors than they otherwise wouldve. And Berkshire has been - and of course her husband Sandy contributed substantially to Berkshires record. Sandy was a wonderful partner to have. So he - it was both input by him and then there was deferred consumption by his family, and then there was ultimately this final gift to Albert Einstein. And like I said, the same day - it was only 500 million. Itll go to - in a different way. But its happening all over, and I dont think any companys like that. So I just want to tell you that its inspiring to work for a group of shareholders. (Applause)

Buffett would make Abel, when he is CEO, responsible for deciding both which businesses and which stocks to buy

WARREN BUFFETTAnd, Becky, go to it. (Laughs)

BECKY QUICKAll right. The next question comes from Slaven Vukobrat. "As CEO, will Mr. Abel be in charge of the portfolio of common stocks that Mr. Buffett has been managing? Or will this function be exercised by Mr. Combs and Mr. Weschler? As investing could be defined as the discipline of relative selection, can major capital allocation decisions such as large acquisitions be separated from the common stock selection process?"

WARREN BUFFETTYeah, I would say that decision actually will be made when Im not around. I may try and come back and haunt them if they do it differently than - (laughs) But - Im not sure the Ouija board (unintelligible) will get that job done. So that job - Ill never know the answer on whether it got covered. But I feel very comfortable about the fact that it will be made by a board that - theyve got loads of brain power. Theyve got a dedication to an unusual institution. And they will figure things out. But I would say that if I were on that board and were making the decision, I would probably - knowing Greg - I would - I would just leave - I would leave the capital allocation to Greg. And - He understands businesses extremely well. And if you understand businesses, you understand - you understand common stocks. I mean, if you really know how business works, you are - you are an investment manager. How much you manage - it may be just your own funds or may be other people. And if you really are primarily interested in getting assets under management, which is where the money is, you know, you dont really have to understand that sort of thing. But thats not the case with Ted or Todd, obviously. But I think the responsibility ought to be entirely with Greg. The responsibility has been with me, and I farmed out some of it. And I used to think differently about how that would be handled. But I think the responsibility should be that of the CEO, and whatever that CEO decides may be helpful in effectuating that responsibility, you know, thats up to him or her to decide at the time theyre running the money. But so I would say that my thinking on that has developed to some extent as the sums have grown so large at Berkshire. And we do not want to try and have, you know, 200 people around that are managing a billion each. It just doesnt work. And I think that when youre handling the sums that we will have, youve got to think very strategically about how to do very big things. And I think Greg is capable of doing that. I think Ive missed a lot of stuff in the past, so Im actually wiser about doing that now. But I - you know, I would do it better this time around than 2008 and '09 if something akin to that happened. But it wont be exactly like 2008 or '09. You can be sure of that. But you also can say that there will be times when having huge sums available extremely quickly -maybe itll be once every five years - maybe - it will probably be more like once every ten years or something - but as the world gets more sophisticated, complicated, and intertwined, more can go wrong. And theres no sense going through here exploring the possibilities of the different things that could happen. But you do want to be able to act when it happens, and I think the chief executive should be somebody that can weigh buying businesses, buying stocks, doing all kinds of things that might come up at a time when nobody else is willing to move. It wasnt that people didnt have money in 2008. Its that they were paralyzed. And we did have the advantage of having some capital and a willingness to - an eagerness even - to act and a government that, in effect, looked at us as an asset instead of a liability. And I think that all of those qualities will be even more important as our capital pile grows. And so I think Greg may have even more fun than I had in a period when extraordinary things were happening and we were the logical place to go. Well, it - you never know whether it will be next week, next year, next decade. But it wont be a century from now. That is for sure. And the more intertwined and sophisticated the world financial situation gets, the more vulnerable it gets, in a certain sense. It solves a lot of small problems, but it leaves it more vulnerable to large problems. Greg, does that bother you at all, or not? (Laughter)

GREG ABELWithout directly answering the question, I think theres - one important thing is, I think, as we go through any transition, its important to know that the capital allocation principles that Berkshire lives by today will continue to survive, Warren. And I think thats what - the thing Id want to communicate. That well - we have our operating businesses, insurance, non-insurance. Were going to - well provide them the capital necessary to be successful and grow if its appropriate. At the same time, were expecting a return of capital from them when they have excess cash. And then, as weve discussed or youve touched on, always looking at potentially new businesses as a whole or in a piece. And as youve always highlighted - and I fully agree - its - well always look at equities as were investing in a business, either one percent or a hundred percent. But were looking at the business. Were looking at the economic prospects of that business and how sustainable it is and what it will look like 10 years from now and is our - the capital we originally put in at exponential risk, or where does that risk sit, that profile? And then, of course - and then well obviously have our contingent to always put excess cash in the safest investment there is in U.S. Treasurys, knowing we want to maintain that fortress of a balance sheet for two reasons. One, to act, but also to always protect our shareholders. If we have - we want to maintain the position Berkshire is in now realistically for the - to ensure - to ensure it endures.

WARREN BUFFETTWell, when he says that it makes me wish Id stayed around to be number two instead of number one in this process (laughs) over the years. It's - You know, it doesnt get more fun than what were doing, and were better positioned than ever before. Were not positioned, though, however, to earn extraordinary returns versus what American business generally earns. You know, I would hope we could be slightly better. But nobodys going to be dramatically better in some - you know, over the next century, it gets very hard to - it gets very hard to predict who the winner will be. And if you look back, as we did a few meetings ago, as to the top 20 companies in the world at 10-year intervals, you realize the game isnt quite as easy as it looks. But getting a decent result actually is - reasonably - should be reasonably easy, if you just dont get talked out of doing what (laughs) has - works in the past. And dont get carried away with fads and dont listen to people who have different interests in mind than the interest of our shareholders.

Distribution companies don't have a 'wonderful' business, but Berkshire will look at them

WARREN BUFFETTOK. Well go to station number one.

AUDIENCE MEMBERHello, Mr. Buffett. My name is (unintelligible). Im from Dusseldorf, Germany. This is my first time out here in Omaha so thank you for having us here today. So my question is directed to you, Mr. Buffett and Mr. Abel. In 2019, you reportedly made a bid for the IT distribution business Tech Data and commented that you understand its role as a middleman. I wonder if you could kindly elaborate on the criteria you look at when evaluating IT distribution businesses like Tech Data and their competitive position. Thank you.

WARREN BUFFETTWell, we had some experience with distribution businesses and we know their potential, to a degree, and their limitations. And, Greg, you were involved in that more than I was so - I mean, that was a case where there had been a bid made and there was a go shop provision and I think the management probably wouldve preferred that we buy it. And when we went in with a better bid, the original party raised their bid. And we never make the same offer twice. So, Greg, tell him more.

GREG ABELYeah. So, absolutely. In 2019, we saw Tech Data as a unique opportunity when we saw the other bid and the underlying value of that distribution business. We did - when Warren and I were talking - and others - made the conclusion we should talk to management. We talked to the team. They were very interested in Berkshire being their long-term owner. And we still saw good value in the opportunity. And we have a good understanding of distribution businesses. We have TTI. Its not exactly identical to Tech Data in that theyre very specific to the - who their customers are and who they serve and supply and who they purchase from, because on the distribution side its important to have that input coming in from folks who want their product and you know its needed on the other side, that theres demand for it. And they had their - they had an excellent model. If you think of TTI, for example - Warrens talked about Paul [Andrews] many times and the person who founded this business. But its a unique business in that our revenues on that business is approximately 10 billion dollars. The average part they sell is a little over nine cents. Ninety-five billion parts go through their warehouse every - every year. But its a model that if you have the right people on both sides of the equation and you understand that well, theres a unique opportunity there. And that is something we saw in Tech Data. And, as Warren highlighted, we made our bid. Unfortunately, it was then topped by the original bidder, and we moved on. But we thought very highly of it. Warren -

WARREN BUFFETTYeah. Weve probably seen at least five of them in aggregate - over the last three or four or five years. Its not a business that you can dream about because - its a decent business. But, for example, many of the items that - the manufacturer just - they dont want to tie up their capital. You tie up - if you have a million-plus SKUs - what they call stock keeping units - its like selling jelly beans or something like that. And you do - youre serving a purpose to a degree, but you dont - you don't really - it isnt your product, in effect. I mean, youre just a good system for the producer of the equipment to get it to the end user without tying up a lot of capital and being in a business they dont want to be in. And so we understand. But theres no magic to it. There was - with TTI you had a marvelous man running things. And he - when you get a marvelous person running something, to some extent that selects for better people underneath. And Greg and I went to Paul Andrews funeral, what, like, a few years ago. And there were 300 people or so there. And there wasnt one person that had to say something particularly nice but stretched a little bit about the deceased. I mean, everybody - Paul Andrews was the real McCoy, and he was an amazing man. And he behaved wonderfully with Berkshire. I mean, he wanted to do more for Berkshire than Berkshire would do for him. I mean, it was very sim - And you run into those people, and as I say, you run into people who bend over backwards for us and then some bend over forwards. (Laughs) But thats just the way it is in this world. And weve had quite a few that have bent over backwards for us. And the distribution business is not a wonderful business, but it is a business and its a business that, if its big enough, its one we would look at and we would buy additional - And TTI makes some smaller acquisitions on its own all the time. I dont even - I don't even hear about them until I read the quarterly reports. And so we want to build up - we want to build our businesses in every area that we operate. And weve got unlimited capital to do it, so were willing to have small acquisitions take place if they fit in with something we already have. But were not in the business of going out after small acquisitions. If we did, we would - we just dont have the people for it. And it wouldnt move the needle anyway at Berkshire. So we may or - we wouldve been happy doing the deal that the questioner asked about, but if we dont do it, you know, it just doesnt make that much difference. And we want to do it - if we do it, well do it well. Well do it right. Theyll have made the right decision. If they dont, you know, we will find something else to do with the money in the end. And we can always buy a little more of TTI for you, the shareholders, by just buying in our stock, too.

GREG ABELExactly.

WARREN BUFFETTYeah.

We havent seen anything that makes sense

WARREN BUFFETTOK. Lets see, we need Becky next, dont we? Yeah. Becky?

BECKY QUICKAll right, Warren. Earlier you talked about selling some of the Apple shares in order to build up your cash supply. And I think its got a lot of people wondering where you see opportunities or what might be coming or market valuations. So Ill ask this question from Foster Taylor. "At the 1999 annual meeting, you mentioned that if you owned all of Americas 500 businesses you would be making 334 billion dollars, while paying ten-and-a-half trillion dollars. You emphasized that this was not a good return on investment. "Today, by my math, the S&P 500 has a market capitalization of around 44 trillion with profits of around 1.45 trillion. This is a very similar return on investment to the 1999 levels. "Do you see similarities in the market today and the 1999 levels?"

WARREN BUFFETTWell, one thing thats changed dramatically from - well, from 1990 - I misunderstood on the 1999. But there have been times in my life that Ive been awash in so many opportunities that I could have invested everything by nightfall. And then theres other times when the year goes - well, not in the early days, but now. We just - we havent seen anything that makes sense. That moves the needle. Now, weve made small acquisitions during the year. Our companies have made acquisitions, and we - you know - Greg and I may talk about something that involves a 300-million-dollar purchase or something like that. And, you know, if it fits well enough, we do it. But - And if our managers see things that fit them, we want to look at them, because our managers do not have necessarily the same equations in mind that we do. But there are some managers which we would have - just say, you know, whatever you decide to do, and then theres other managers that would not know how to allocate capital, particularly. And they dont have to be able to be great capital allocators, if they happen to be great at serving customers and understand their own industry and all of that. You know, they can be great managers. But many of them arent capital allocators and others are. But this is not - this is not a time when the phone is going to be ringing often, but there are times. And Greg will know how to handle them as well or better than I have over time. And Charlie and I would - you know, we missed a lot of things. And what we really regretted was missing something that turned out to be very big. We never worried about missing something we didnt understand. I mean, why should we be able to, you know, predict the future of every business any more than we can predict, you know, what wheat yields are likely to be in Illinois next year. (Laughs) Well, not wheat in Illinois. Wheat in Kansas. But corn in Illinois. So, I wouldnt - I dont really think of whether its similar to 1999, because Im not that good on chronology anyway unless something really dramatic happened at the time. I mean, I remember things from 2008 and '09 much better than I remember whether something happened in 2015 or 1987 or - well, 1987 I remember because of October 19th. But I just dont think - I dont think that way. I just look at what I can do every day. Greg?

GREG ABELIm going to have to use it. Nothing - sorry, nothing to add.

WARREN BUFFETTOK. Well go to station two. (Applause) I mean - its nice to know what lines you can get applause for. (Laughter)

'Seeing something that turns on the lightbulb'

WARREN BUFFETTStation two?

AUDIENCE MEMBERHello. My names Stefan Wunbafam (PH). I am a shareholder from Hamburg. Hamburg, Germany. Ive been coming to Omaha since 2007. And Im deeply grateful for all the things I could learn here, both about investing and about life. In particular, creating circumstances that will enable me to lead a productive life during my entire healthy lifespan. So, thank you for that. My question. My question to Warren. Your favorite holding period is forever. Holding American Express or Coca-Cola for decades. Berkshire recently went in and out of Markel, and you, I believe, sold and later bought OXY, which I think happens to everyone all the time. But can you maybe to us give examples of your thought process when you exit positions? Thank you.

WARREN BUFFETTWell, there are various reasons for exiting positions. One is if you need the money, but that doesnt happen very often with us. But it used to happen on every decision I made when I started it when I was 20 years old, which I consider the post-Graham period, although I actually started in 1942 if you just talk about buying stocks. But in any event, the decision process is really quite interesting in a certain way, because it - we made - Charlie and I made decisions extremely fast, but in effect, after years of thinking about (laughs) the parameters that would enable us to make the quick decision when it presented itself. People have speculated on how Ive decided to really put a lot of money into Apple. And for a reason I cant - well, one thing that Charlie and I both learned a lot about was consumer behavior. That didnt mean we thought we could run a furniture store or anything else. But we did learn a lot when we bought a furniture chain in Baltimore, and we quickly realized that it was a mistake. But having made that mistake made us smarter about actually thinking through what the capital allocation process would be and how people were likely to behave in the future with department stores, and all kinds of things that we wouldnt have really focused on. So we learned something about consumer behavior from that. We didnt learn how to run a department store. Now, the next one was Sees Candy. And Sees Candy was also a study of consumer behavior. We didnt know how to make candy. You know, we didnt - there were all kinds of things we didnt know. But weve learned more about consumer behavior as we go along. And that sort of background, in a very general way, led up to the study of consumer behavior in terms of Apples products. And in that case, while I watched what was happening at the [Nebraska] Furniture Mart, in terms of people leaving the store, even though we were selling Apple at a price where we werent even making any money. But it was just so popular that if we didnt have it, people left the store and went to Best Buy or someplace. And if you know the Blumkins, they cant stand anybody leaving the store. So theyd behave accordingly. But then you learned - that had to interest you in the brand. And then you had a million different inputs. But I think the psychologists call this apperceptive mass. But there is something that comes along that takes a whole bunch of observations that youve made, and knowledge you have, and then crystallizes your thinking into action. Big action, in the case of Apple. And there actually is something which - I dont mean to be mysterious - but I really cant talk about. But it was perfectly legal (laughs) and everything, I can assure you of that. But it just happened to be something that entered the picture that took all the other observations - and I guess my mind reached what they call apperceptive mass, which I really dont know anything about, but I know the phenomenon when I experience it. And, you know, that is - we saw something that I felt was, well, enormously enterprising. Maybe Ive used this example before. But if you talk to most people, if they have an iPhone and they have a second car - the second car cost them 30 or 35 thousand dollars - and they were told that they never could have the iPhone again or they could never have the second car again, they would give up the second car. But the second car cost them 20 times what the (laughs) iPhone did. So, now people dont think about their purchases that way, but I think about their behavior. And so we just - so without knowing - I dont know - have the faintest - there may be some little guy inside the iPhone or something. I have no idea how it works. But I also know what - I know what it means to people, and I know how they use it. And I think I know enough about consumer behavior to know that its one of the great products - maybe the greatest product - of all time. And the value it offers is incredible. And I think it has - in Tim Cook - I think it has somebody that, in his own way, is the equivalent of a partner with Steve Jobs, that could do one thing extraordinarily well, and more than one application. But one thing - and Tim was the perfect partner to serve sequentially with him. So it’s - you sort of know it when you see it. I actually saw it with GEICO when I went there in 1950. I didnt know exactly what I was seeing. But Lorimer Davidson, on a Saturday, in four hours, taught me enough about what - I understood what auto insurance was, and I knew what a car was, and I knew what people - went through peoples minds. You know, I knew they didnt like to buy it, but I knew they couldnt (laughs) drive without it. So that was pretty interesting. And then - but he filled in all the blanks in my mind as I sat there on that Saturday afternoon. And, you know, every now and then it happens. You know? Why do you have this - the person you met. You know, there are all these different potential spouses in the room, and then something happens that you decide that this is the one for you. You know? I think, was it Rogers and Hammerstein that "Some Enchanted Evening" (laughs) wrote about that? Well, our idea of an enchanted evening is to come up with a business, Charlie and me. (Laughs) And there is an aspect of knowing a whole lot and having a whole lot of experiences, and then seeing something that turns on the light bulb, and - That will continue to happen, and I hope it happens a few times to you. But you cant make it happen tomorrow, but you can prepare yourself for it happening tomorrow. And it will happen sometimes.

GREG ABELHey Warren?

WARREN BUFFETTYeah?

GREG ABELHe mentioned OXY, which I think is a great example.

WARREN BUFFETTYeah.

GREG ABELWhere you made the original decision, basically, on a weekend with some thought. But as the more you learned about OXY and the asset position they had, their ability to operate in an exceptional manner, and then a strong CEO around capital allocation. I think your confidence, which was reflected in continuing to acquire more shares, is sort of that type of process, where -

WARREN BUFFETTYeah.

GREG ABEL- basically -

WARREN BUFFETTYeah. Its exactly to the point. I mean I just learned more as I went along. I learned enough - you know, Id never - Id heard of Occidental Petroleum. Occidental Petroleum happens to have been a descendant to something - not a descendant, but a continuation of Cities Service, which was the first stock I bought. And of course, I knew a lot about the oil and gas business, but I didnt know anything about geology. And so I knew the economics of it. I had a lot of various things stored in my mind about the business. But I never heard of [OXY CEO] Vicki [Hollub] until - I guess it was a Friday or a Saturday, and we met on Sunday morning, and we made a deal. But that was one sort of deal. And then as time passed, all the kinds of different events happened, and, you know, [Carl] Icahn came in. I mean there are a million things you couldnt predict at the start. And Ive formed certain opinions as I went along, but then I learned more as I went along. And then at a point when I heard an investor call, I think it was on - it put things together for me in a way. Didnt mean I knew I had a sure thing or anything like that. I dont know what the price of oil is going to be next year. But I knew that it was something to act on. And so we did. And were very happy we did, and we still dont know what the price of oils going to be next year. Nobody does. But I think the odds are very good that it was - but not a cinch - that it was a good decision. And, you know, weve got options to buy more stock. And, you know, when we get through with it, we could - it could be a worthwhile investment for Berkshire. And were in it. And were in it for keeps. And there are other things that we own that we arent in for keeps.

Buffett: I was '100% responsible' for buying Paramount stock and 'we lost quite a bit of money'

WARREN BUFFETTOh, incidentally, I should just throw this out there, since theres been speculation on it. Weve sold - A, I was a hundred percent responsible for the Paramount decision. I read speculation that one of - either Ted or Todd - had some involvement in that. No. It was a hundred percent my decision. And weve sold it all, and we lost quite a bit of money. And that happens in this business, too. But, actually, owning Paramount made me think even further. I like to think deeper, but I certainly have - not harder even about the whole question of what people do with their leisure time. And, you know, what the governing principles are of running an entertainment business of any sort, whether its sports or movies or whatever it might be. And I think Im smarter now than I was couple years ago. But I also think Im poorer because I acquired the knowledge in the manner I did. But I just want to be very clear that A, we lost money on Paramount, and B, you know, I did it all by myself, folks. (Laughs) I dont know whether Ive anticipated one of Beckys questions now, but well - we will - we will find out. I dont know. Lets see.

BNSF is trying to reduce costs to better compete with rival railroads

WARREN BUFFETTYeah, youre next, Becky.

GREG ABELYep.

BECKY QUICKYes, you did anticipate one of the questions. (Laughs) Lets go to another one. This question comes from Vincent James in Munich, Germany. "In the chairmans letter, Warren points out that the profit margins for BNSF have slipped relative to all five other railroads." "However, Warren comments in the letter, BNSF carries more freight and spends more on capital expenditures than any of the other five major railroads and has a vast service territory second to none.' "Given the comments from Warren about the clear strengths of BNSF, what explains the decline in revenue and profit?" "And, in particular, the profit margins, relative to the other five railroads? What are the issues relative to the other railroads, and what is being done to address them? Please be specific."

WARREN BUFFETTOK. And I will - well, how specific we get depends on what Greg wants to say. But Greg is - its Gregs responsibility. It is my responsibility for the purchase and for the operation up till Greg took over, but I think Ill let Greg answer that.

GREG ABELSure. Yeah, Warren touched on it in the comments from the - as reflected, there are very accurate. If you look at this quarters results or our last years results, they were both - theyre disappointing as shareholders and disappointing in the - relative to the other Class I railroads. And as highlighted in the question, theres five other Class I railroads, so its pretty easy to understand how youre performing versus the others. And theres a lot of other variables, but there are some very simple things to look at. When we look at where weve been on - associated with Burlington - I would just back up a little bit. Because if you go back to 2021, the Burlington team and management team in the group, we were making excellent progress on a lot of fronts when it comes to our operating, in both being efficient and effective in how were operating the railroad. And I remember very specific comments from myself in 2022 where I commented that that was a year there was all the supply chain issues. A lot going on in the West Coast ports. Our trains were backed up in a variety of places. And we called that a reset year. And I think we did need a reset year on the operational side. But as we moved into 23, the business cost level - cost structure - we didnt reset it to the underlying demand we were seeing. We anticipated more demand, and we did not reset our cost structure. And the teams working very hard, as we speak, to do - both reset the cost structure and allocate the cost resources where they need to be. And when you go through something like that, what weve recognized as an organization, yes, the demand of the rail will drive a certain amount of the costs. But the reality is that the rail industry, if you go back many, many years, its flat. Theres not a lot of growth in the industry. Theres opportunities to become more efficient and effective, and our margins can go up. But the reality is demands going to be flat. But it does move within different sectors of the rail. It can be in the consumer products. It can be in industrial. It can be in ag. But overall, its generally going to be relatively flat. So we need to get our cost structure right, and we need to get it right both for the coming year, but for the long-term. And that means its going to be a continuous exercise. We cant stop. We cant say weve gotten far enough, because our competitors - and we compete with the other rails, but we also do compete with the truck industry. We have to have a cost structure that allows us to compete both within our rail industry and within the transportation sector as a whole. So the team at Burlingtons working very hard to address the cost structure, just like we have in the past. I think one thing we do recognize, when the other railroads have implemented precision scheduled railroading, theres other metrics that we have to continue to pay attention to, and challenge ourselves. If were not at their level, what are the things that are driving it. So were going to - when they ask for specifics, Ill give you a few. We have to look at our rail yards and understand how were managing that. We have to look at our locomotive fleet. Both the size and how were utilizing that and challenge ourselves. And we have to then go back to how were using our employee resources and allocating them across the business. So theres a lot to be done there. Our teams one hundred percent committed to driving to the right cost structure thats consistent with the underlying demand in the business. And then we cant stop there, is the answer. So a lot to be done, but we have a team thats absolutely engaged and committed to it, and we'll make - were going to make good progress in this current year.

WARREN BUFFETTAt Berkshire, we want everybody to have the idea that theres a lot to be done with every business. You know? So, I mean - it is - you know - we -you know - a fellow named Pete Kiewit built a remarkable company [Kiewit Corporation] in Omaha - building company. Really remarkable. And it is - the question after everything they did, that when something was done particularly well, theyll - digging a tunnel under the East River or something when they said it couldnt be done - he would say it would be - he was pleased but not satisfied. And that is exactly the way we want the attitude to be at Berkshire forever. Omaha is a railroad town. If President Lincoln, in 1862, I think it was, had decided to pick St. Joe or Plattsmouth or anyplace else to build the transcontinental railroad, Omaha would probably be a little town of 20,000 or something on the banks of the Missouri. But making - with Lincolns desire to make this the eastern connection, and make a transcontinental railroad, Omaha just took off. So its been railroading at its base. The - And anybody thats interested in financial matters had to think about railroads. Plus, they have a certain glamour to them anyway. But the interesting thing is that UP [Union Pacific], which is our main competitor, themselves fell way behind 20 or 25 years ago, before Jim -

GREG ABELRight.

WARREN BUFFETT- before Jim Young came in. And in 2000, whenever it was, '08 or so, I started buying three railroad stocks. And - Union Pacific, BNSF, and Norfolk Western, I believe. I dont know why I wasnt buying C&O. But in any event, Jim Young had done a marvelous job with Union Pacific. So we owned all three stocks. But what we did in 2009 is we were able - well, we already owned 22 percent of it, but overall, it was 35 million dollars - a billion dollars - which was a significant part of our capital. We were able to put it to work in a business we liked. And there are certain tax advantages that come in terms of making money in something thats more than 80 percent owned - we'll call it a hundred percent owned in this case - versus making it through stocks. So it has a net benefit to us from making the same amount of money owning one of the other railroads by owning all of the railroads. And we got 35 billion out during a recessionary period. I think that was the worst quarter, the third quarter of 2009, maybe that the rails had had for a long time. So its worked out. Actually, its worked out very well, but its because we were putting out capital in 2008 and 09. And if we put money in anything, wed have made a lot of money. But its more satisfying, and is actually better in certain ways tax-wise, to make it from something thats a hundred percent owned. Not all, but once youve - you know, 5 percent or 10 percent owned businesses. Were - you know, as I mentioned in the annual report, railroads are absolutely essential to the country. That doesnt mean theyre on the cutting edge of everything. Theyre just essential to the country. And, you know, thats why the government - you know, I think they took them over one time. And they negotiated what our labor settlements will be and everything. And if you shut down the railroads in the country, it would be incredible, the effects. But - and it would be impossible to construct now. I mean look at whats happening in California when theyre trying to build a line. I mean, you know, everybodys worried about the environmental effect of every mile, you know, and whatll happen to the various species of birds. Can you imagine the rail system in the United States being built? (Laughs) It would take decades, unless a war was on and the government took over things and just ordered them. You cant create it. So we love owning a business like that. Its going to be around a hundred years from now. Wont be the best growth business in the world at all during that period, but it will be essential. And what it earns in its - relation to its replacement value is a pittance. But well do fine in terms of what we paid for it. And well distribute substantial amounts in relation to what we paid to Berkshire in a very tax-efficient way. And so its - well, the question is, what are the issues relative to the other railroads. You know, it wouldnt have been the end of the world if - at all - if we bought the Union Pacific and Jim Young had stayed alive to run it for us. That would have been great, too. But we had the opportunity to buy BNSF, and its been good for them, and its been good for us. And we think it’s been - its a very important asset to the country. And, you know, I just hope we can find something in other industries that - where it makes as much sense as that, where we can put a whole bunch of money to work at an advantageous time. (Laughs)

You can find deeply undervalued securities, but you have to love the game, not the money

WARREN BUFFETTSo lets go on to - station three. Is that correct or not?

GREG ABELYeah. Yep. Yep.

WARREN BUFFETTOK.

AUDIENCE MEMBERGood afternoon, Mr. Buffett, Mr. Abel. My name is (unintelligible) Woo, a resident of New Zealand but originally from Thailand. This is my first time in America and the first time attending the meeting. The journey was quite rough, but it was all worth it though, because I can now personally thank you, Mr. Buffett, and the late Charlie Munger, were he still with us, for organizing such a wonderful event. And, most importantly for being such an exceptional role models and sharing your wisdom with us all these years. So, thank you.

WARREN BUFFETTWell, thank you for coming. (Applause)

AUDIENCE QUESTIONSo heres my question for you, Mr. Buffett. Towards the end of 2018 you mentioned that you guarantee you could make a 50 percent annual return (Buffett laughs) if you had to start again with under one million dollars. The question is, if tomorrow you woke up in the body of -

WARREN BUFFETTYour body.

AUDIENCE QUESTION- a 20-year-old American.

WARREN BUFFETTYeah, your body. But thats fine. (Laughter)

AUDIENCE QUESTIONAnd your name was now Warren Ellicott, and you had some money to invest on a full-time basis, what method or methods would you use to achieve that return? Would it involve flipping through 20,000 pages of Moodys manual or similar publications?

WARREN BUFFETTYeah.

AUDIENCE QUESTIONOr finding [cigar] butts? Or would it be hunting for great companies at a fair price, as Mr. Munger would? Or would it be a combination of both with opportunity costs being as the final arbiter of which method to use, given that your investing opportunity has now broadened significantly? Thank you.

WARREN BUFFETTGood question. Im glad you came. The answer would be, in my particular case, it would be going through the 20,000 pages. And since we were talking about railroads, you know, I went through the Moodys Transportation Manual a couple of times, that was 15 hundred or two thousand pages. Or, well, probably 15 hundred pages.

WARREN BUFFETTAnd I found all kinds of interesting things when I was 20 or 21. And I dont imagine theres anybody here that knows about the Green Bay and Western Railroad Company. But there were hundreds and hundreds of railroad companies. And I liked to read about every one of them. The Green Bay and Western - in those days everybody had a nickname for railroads. I mean, that was just what - Northern Pacific was the “Nepper,” and, you know, “Phoebe Snow” was one of them in the east that used to go up to Cornell. And the Green Bay and Western was known as "grab baggage and walk " - G, B and W. And they had an - they had a bond that was actually the common stock, and they had a common stock that was actually a bond. And, you know, that could lead to unusual things. But they wouldnt lead to unusual things that would work for you with many millions of dollars. But if you collected a whole bunch of those, which I set out to do - and actually thats what impressed Charlie when I first met him, because I knew all the details of all these little companies on the West coast that he thought I would never have heard of. But I knew about the Los Angeles Athletic Club, or whatever it might be. And he thought he was the only one that knew about that. And that became an instant point of connection. So to answer your question, I dont know what the equivalent of Moodys manuals or anything would be now. But I would try and know everything about everything small. And I would find something. And with a million dollars you could earn 50 percent a year. But you have to be in love with the subject. You cant just be in love with the money, youve really got to just find it. You know, essentially like, you know, people find other things in other fields because they just love looking for them. A biologist looks for something because they may - they want to find something. And thats built into that. I dont know how the human brain works that much, and I dont think anybody understands too well how the human brain works. But theres different people that just find it exciting to expand their knowledge in a given area. You know, I know great bridge players. I know great chess players. Actually, [Garry] Kasparov came to Omaha and met Mrs. B [Rose Blumkin]. Ive had the luck of meeting a lot of people that are unbelievably smart in their own arena and do some unbelievably dumb things in other areas. So all I know is the human brain is complicated. But it does - it's best when you find out what your brain is really suited for, and then you just pound the hell out of it from that point. And thats what I would be doing if I had a small amount of money and I wanted to make 50 percent a year, but I also wanted to just play the game. And you cant do it if you really - if you dont find the game of interest, whether its bridge or whether - you know, whatever it may be - chess - or in this case finding securities that are undervalued. But it sounds to me like youre on the right track. I mean, anybody that will come all the way to this annual meeting, has (laughs) got something in their mind other than bridge or chess. So, Im glad you came, and come again next year. (Applause)

'You have to be alert to what human nature does to both other people and to you'

WARREN BUFFETTAnd now we move - (applause) - now we move to Becky.

BECKY QUICKThis question comes from Denny Poland, a shareholder from Pittsburgh. "When describing the principal-agent problem, Mr. Munger said that capitalism often works best when the people managing the property also own the property. "In recent years, agents of pension funds and asset management firms who do not have significant personal ownership stakes in Berkshire have forwarded proposals that were not in the economic interest of shareholders. "What can be done to limit the negative influence of these agents in the decades after youre no longer able to cast significant votes against them?"

WARREN BUFFETTWell, thats a very perceptive question. And its been answered in a temporary manner. But who knows what these - how the situation will develop in the future. All I know is that you have a wonderful hand at Berkshire Hathaway. But you have to - you have to be able to think your way - I mean, obviously - you have to think your way through political realities. You have to think your way for what - who caused - A, you want to be on - you want to be regarded as an asset to the country, because youll find more solutions if you are an asset. You owe it to the country anyway. But beyond that, youll find more solutions than if youre regarded as evil or something, and worse yet if you deserve it. So its something thats constantly on our mind. And it needs to be in the mind of the directors. And they need to think for themselves on this rather than bow to conventional wisdom. Which - you know - in a sense, you dont want to become the cynic about life. But almost everybody that approaches you, if you have tons of resources, has got some interest in figuring out how to use your resources to their advantage. (Laughs) And thats true whether theyre in politics or whether theyre in investment banking or whether theyre selling you - well, whatever it may be that theyre selling. I dont want to do any injury to anybody. But, you know, life insurance agents see the advantage of buying life insurance. And investment managers, who get paid based on assets managed, get interested in selling you their services. Imagine if everybody in this room were following the investment advice of somebody that said, you know, for 1 percent a year, Ill tell you how to invest your money, and in 1950 - when we started in 1965, they wouldve - they would’ve said, well, buy Berkshire Hathaway. And if they were around now and they still had their 1 percent deal, theyd be collecting 8 billion dollars a year from people who arent getting any dividends from us. (Laughs) So yeah, they would have a different interest in the kind of contract they worked out with you than you would have. And the best thing to do is just pay them a commission one time and own the stock. But you have to be alert to how - what human nature does to both other people and to you. And then you, you know, if you think it - if you think it too well, and you actually listen to what Charlie has told you, youll have a big head start on most people. Charlie - theres one thing that I should mention that really is terribly interesting about Charlie. Charlie knew the importance of psychology and human behavior and incentives and all of that. He figured that out very early. And, of course, he gave some talks, even on 25 or so ways - whatever it happened to be, I dont remember the exact number - but the different ways that one person could take advantage of another by understanding how humans behave. And then, after doing a magnificent job of explaining it, he believed in understanding what others would do. But he thought it was beneath him to actually use those methods to manipulate people. Thats a really interesting human being that thinks through the psychology of human behavior and figures out, you know, how you become a great insurance salesman or manager on Wall Street or accumulative assets under management, or whatever it may be. And you get very rich by understanding the weaknesses of others, to some extent, and then decide that its very important for you to recognize these when they occur. Its very important for you to know them better than the person that actually is using them, but not - but you dont have to stoop to using them yourself. And Charlie told me that - that, you know, in his lifetime, after he figured this out, there were a couple of times when he used them. He wasnt proud of it, but he also never lied to me. So he explained to me that, you know, there were a couple times when he used some of these techniques. But he - it wasn't - he didnt plan on using them anymore. But that he also wanted me to know that if I ever did something like that, I wasnt really behaving terribly, that he allowed for the fact that humans may misbehave. So Im sure that I behaved somewhat better before my marriage than I did afterwards in my enthusiasm for different activities, like dancing or something. And he said, thats, you know, we all do it. But dont do it again. (Laughter) And so thats part of acquiring human wisdom. And speaking of human wisdom, weve just got that one book out there by Charlie. I mean Poor Charlies Almanack. And thats worth reading three or four times. I think I read Ben Grahams book about five or six times. And each time I read it, I realized that I just needed to think a little more deeply about certain things. They werent complicated or anything. But, you know, its better to - if youve got some great instruction, like you get with Charlie, its better to read it several times than to just figure youll just read every book once thats in the library.

How Buffett's parents reacted when he ran away from home

WARREN BUFFETTOK, lets go to section four.

AUDIENCE MEMBERJeff Roblyer from Tulsa, Oklahoma. And Im thinking of Dr. [Benjamin] Graham, Mr. Munger, your father. And my question is for all of us, but its probably especially for the younger people in the room - the importance of picking the right heroes in life, choosing friends wisely, and maybe tell us a story if you could about each of those folks. Thank you, sir.

WARREN BUFFETTWell, theres no question, youre a hundred percent right, in terms of having the right heroes. And, you know, youre lucky if you get them. I mean, Charlie had - Charlie had them. I had them. And the interesting thing - my sister is here today - my younger sister that - were the two survivors - and we both experienced having the same hero, even though as we grew older, we saw that we didnt agree with plenty of his ideas. But we did agree with his values and motivation. And thats a better lesson than having somebody thats reading to you from a catechism that has got a lot of rules in it, which are pretty good rules. But theres a special - a special place for somebody that is going to continue loving you even if you break some of the rules. And thats what Charlie had in his life. It was what Bertie and I had in our lives. So, I would - I would just repeat what you said. I dont need to give you a bunch of - well, when I ran away from home - Ill give you a specific example with me. When I ran away from home and went and we hitchhiked up to Hershey, Pennsylvania and got picked up by the state police and everything. And I talked these other two guys into it and we lied like crazy to the state police, you know, and saying we had our parents permission. Some kid at the place where we stayed had tipped them off that wed run away from home. And we started, like I said, when the state police picked us up, we decided that two things, you know, - - we decided to tell them a bunch of lies about the fact we had our parents permission. And we decided we better get out of Hershey, because these cops were going to find out sooner or later. And so anyway, we end up back in Washington after a couple of days. And when I walked in the door - well, one of the boys mother - and this other kid was a congressman, Roger Bell - and his mother was in the hospital over this whole thing. Hed taken out his cash and his savings bonds, and so she was sick. And Judge Bell, her husband, was all concerned and everything. And I walked in the door in Washington and my mother said, "How come you came back so soon?" And my father said - (laughs) - he said, "I know you can do better." (Laughter) And I just paid more attention to my father than my mother. So you want to have the right heroes. And you dont have to have them - its not the heroes based on what theyve accomplished. It's - you know - it's - Its the people that you want to be yourself. And if you copy the right people, youre off to a great start. And I dont mean a great start about making money, I mean a great start about living your life. So, you can check with my sister, Bertie, who is here and see if Ive told the story correctly. She ran away from home, too, incidentally. But she didnt get as far as I got. But - She was running away to go to my grandfathers house, which was about two miles away. (Laughs) But I dont want to denigrate her runaway abilities, because she is much more accomplished than I am in all kinds of other things. But when it comes to running away, I definitely outclassed her. (Laughs)

Buffett on Pilot deal dispute: 'All's well that ends'

WARREN BUFFETTOK, lets go to Becky.

BECKY QUICKThis question comes from Vedaant Sharma in India. "Warren, you and Charlie have often said that you were able to identify the people you want to go into business with and have had an exceptional record in that. "However, in the case of Pilot, we noticed that the final stake purchase ended up in a dispute and had a sense of smart accounting, to put it one way, to squeeze a little more out from the deal than was deserved by the seller. "Knowing well that this has been settled out of court and needs due confidentiality, I would like your views on some of the lessons learned that may be beneficial for future deals to watch for, and for coming leadership to look out for as well."

WARREN BUFFETTWell, Ill make two comments on that. A couple of the directors had their doubts about going in. And in any event, Pilot is working out well for us. And as my friend Sam Butler one time said to me - and he was talking in general about certain kinds of situations - but he said, "Well, Warren," he said, "Alls well that ends." And thats where we are. (Laughter)

Pilot and new CEO Adam Wright are 'only in America' stories

WARREN BUFFETTSo well go to station five. (Laughter) Well, while were getting to station five, Ill tell you a little bit more about the fellow [Adam Wright] that is now running Pilot, and who you may have met here, that Greg had known for a long, long time. And he grew up in Omaha. And came from a poor family and was raised by his mother.

GREG ABELRight.

WARREN BUFFETTAnd went to the same high school, public high school, that my wife went to, North High. Went to the University of Omaha. Set an all-time record in the rushing yardage playing there. He was a bouncer.

GREG ABELYes.

WARREN BUFFETTDrafted by the New York Giants, as I remember, but -

GREG ABELExactly.

WARREN BUFFETTYeah. And but then - injured - actually, in spring training, as I remember, in some way. So he ended up being an intern. Not an intern, but a trainee you might say -

GREG ABELRight.

WARREN BUFFETT- for MidAmerican before I was there. And now here he is, still relatively young. And hes running a huge company. And weve got incredible confidence in what he will do. And we like very, very, very much the business that was created by big Jim Haslam. And the - you know - it really is almost an "only in America" type story. But it does show you what somebody with some real stuff, and with a mother that believes in them. And with bad breaks along the way, I mean, imagine how youd feel if you were drafted by the New York Giants and then you suffered some injury in spring training or something. I mean, you know, you spend your life - it just, it hurts. But its not an experience I would have ever had, incidentally. (Laughter) I mean, I was the last guy chosen. But - you know, to see that hes running the company - well, depends on the price of the deal - but a huge company. And what does he have? Twenty - 25 thousand or so?

GREG ABELRight.

WARREN BUFFETTYeah - employees -

GREG ABELAbout 25 thousand employees.

WARREN BUFFETTYeah. And hes got many, many, many years to go. So I couldnt be more pleased about - not only the acquisition of Pilot, but just what it tells you about America. You can - can't you - what do you have to look up to read about him in Google, or an interview with Adam?

GREG ABELYeah, Im trying to think if its a podcast.

WARREN BUFFETTYeah. Hes got a podcast that will just blow you away. And if you dont think this is a great country and has a lot of great people in it, all youve got to do is read that podcast.

GREG ABELBut we do have a great set of assets here.

WARREN BUFFETTOh, yeah.

GREG ABELYou know, if you look at Pilot, we have 800 - more than 800 stations - well, travel centers. And just so everybody knows, the beauty of that - and there was a question regarding this morning around fuel choices at Pilot - and the exciting thing is, in the end, Pilots going to serve whatever fuel our customers need. It can be electric, it can be renewable diesel, it can be diesel, or any of the various sustainable fuels. But the point is, it has exceptional locations that are on the interstate highways. And we -

WARREN BUFFETTHundreds of them.

GREG ABELHundreds of them. And we bought an incredible franchise. And now we have a great leadership team in both Adam and his team thats around him. So were pleased where that opportunity will go.

WARREN BUFFETTYeah. Weve got - probably the average one might be ten or 12 acres or something like that -

GREG ABELYeah, yeah.

WARREN BUFFETT- zoned commercial on interstates throughout the whole United States. I mean, who knows? But what was created there is amazing, too. You had a fellow [Jim Haslam] that played at University of Tennsylvania - I mean University of Tennessee - undefeated.

GREG ABELLYeah.

WARREN BUFFETTAnd came away from this football team. And you'd think, well, another football player, you know. He goes out - and there may be some intermediate parts in the story a little bit - but he buys a gas station and he turns it into something that is huge. So it's - were really delighted with it. And, you know - Thats another kind of "only in America" story. And, you know, how many of us can become an All-American, a number one-ranked team, let alone start a business that (laughter) goes on to these sort of heights? So we feel very good about it. Becky?

GREG ABELNo, I think theyre ready for five now.

WARREN BUFFETTOh, I see. Im sorry -

GREG ABELI think hes up there now.

WARREN BUFFETTOh, OK -

GREG ABELHes ready to go.

WARREN BUFFETTOK, go to it.

'Anybody that says I did it all myself is just - delusional'

AUDIENCE QUESTIONHello Mr. Buffett. My name is Chung Yao Bo (PH). I came from (unintelligible) Hainan, China. So I want to express my sincere gratitude for you for the extraordinary value you generated for shareholders, and the positive influences you have on younger generations of investors like us. And my question relates to the concept of maximizing the duration of compounding. As individuals age, the quality of compounding inevitability diminishes. What are your secrets in maintaining your sharp mind, extraordinary judgment, and great physical condition? We wish you well. Thank you.

WARREN BUFFETTWell, you dont know me well. But that's - I like - (laughter) - just keep talking., I mean - Well, you know, you have to be just plain lucky. I mean, theres no question about it that theres a hundred or a thousand, you know - multiply a number of times that some drunk couldve pulled out a car and broadsided me or, you know - just all the bad luck that you can have in life. And you can say that my great skill has been avoiding bad luck, but that isnt a skill. Thats luck - or bad activities. And, you know - and then to get to be - you know - I would not have been a - If youd taken my high school class and you said, you know, a couple of you are going to live to be 90 - men are going to live to be 93, you know, I would not have been a heavy favorite, I can tell you that. And I wouldnt have bet on myself. But - you just - Now you - you should make the most of your luck when you get it. And sometimes Ive done that and sometimes I havent. I mean - It is absolutely true that if I had it to do over again there would be a lot of different choices I would make. But that they would have ended up working out as well as things have worked out, its hard to imagine how they could have worked out any better. So - But it is interesting how many mistakes you can make if you just keep going. And Charlie, you know, used to talk about that, that you just soldier through. You just keep going. And - But you still need luck, you know? You don't want to - Anybody that says I did it all myself is just kidding. Its just - you're delusional. And, you know, actually live in a country where the life expectancy is pretty darn good, you know? So that alone is a huge plus. I was born - if I had been born - my sister is here, and she was born female. And shes just as smart as I was and everything. But even my own family, who really did - well, particularly my dad loved us all equally - and in a terrific manner - but he still told me that - that - this is ten or - well - I was born ten years after the 19th Amendment was passed. But he told - he basically told my sisters, you know, to marry young while you still have your looks. And he told me that the world, you know, that power in you is new in nature, and that you really could do anything. Well, I found out there were a lot of things I couldnt do. (Laughs) But the message given to females and males was incredibly different, by the most well-meaning and loving of parents. Like I say, in 1930, I mean, it had been that way for millions of years. It's changed quite dramatically, but obviously, not completely. But during my lifetime - but its been during the latter half of my lifetime - if you take my sisters, if theyd been born even five or ten years later they still wouldve been, you know, getting instructions when they went away to college to be sure - to be sure and get married - or arrange so youre going to be married, you know, while youre in school. Because after you get out, all the good ones are taken. That was - Bertie was telling me that was a message that, you know, basically had been imparted to most of - a lot of the women shed met, obviously. And so it really - its extraordinary how much progress weve made. But its unbelievable how long it took to get it made. It really does make you wonder about, you know, weve got all the heroes from American history and all the wonderful things they did, but how could they say, "All men are created equal," and then write a Constitution (laughs) that women, you know, women not to be able to own property, and depending on the state, I mean, just terrible conditions. But anyway, thats how you learn about what the humans can do. (Applause) And if you - and youve got to feel better about the future for your kids than you wouldve felt a hundred years ago, no matter, you know, what the situation is.

'You really get some strange things revealed in a will'

WARREN BUFFETTAnyway, well move to Becky.

BECKY QUICKThis question comes from Linda Frazer in Westport, Connecticut. "Dear Mr. Buffett, in the past youve specified that 90 percent of your wifes inheritance be invested in a low-cost S&P 500 index fund, and 10 percent in short-term government bonds. "But the market cap of the Magnificent Seven tech stocks now represents more than one-quarter of the market cap weighted S&P 500 index, which seems like a big bet on the tech sector. "I was wondering if you would now recommend investing some portion of the funds in a low-cost equal weight S&P 500 index fund, rather than having all of the equitys exposure in a tech-heavy market cap weighted fund?"

WARREN BUFFETTWell, thats an interesting question. And I will tell you that I revise my will about every three years or so when I get little thoughts from time to time, and then - you dont change it every time you do it. You get a tiny thing. But the one section I havent changed is that - with my wife - that she get left a huge amount of money by practically anybodys measurement, except a pittance compared to what Ive accumulated in total. And it doesnt - it wont make one bit of difference to her in life, whether she beats the S&P or (laughs) anything else. All I want to leave is plenty of money to take care way beyond anything shell ever spend, and at the same time give her as much peace of mind as possible. And really make it so that the trustee who administers it doesnt really have to - doesn't have to worry about whether - it just doesnt make any difference whether she beats the S&P or not. And the main thing is that she feels - that she feels that shes in a financial position, which of course she will be, that she doesnt even need to think about it, and the trustee doesnt have to worry about getting sued or anything else. (Laughs) So its - it's simply not an economic condition. Now, obviously with 99 percent-plus of what I have going to philanthropy, you know, and Ive got my three children that - The one good thing is that they - at the age of 70, 69, and 65 - they have matured remarkably. Probably more than their father. And that - but at the same time, theyve got less time to work with the money than they would if, you know, they were 50 or something like that. So you do the best in accomplishing your objectives in your will. And in the end, you know, you can't - you dont know whats going to happen after you die, but you make sure that, to the extent that you leave - you have a lot of money to leave, you take - obviously, you want to say thanks to a lot of people - and quite a few people, in terms of specific requests. You want to take care of your family. But in my case, that requires practically no money, and there - a fair amount for taxes. But I have - my children are in charge of what happens to the funds that are left. But like I say, the problem is when you live as long as I have, and your kids get older, you know, who knows what happens in the mortality tables. And theyre the ones that I really want to see handle the distributions. And they will, and theyll be very good about it. And - But if were all alive three years from now, theyll be three years older, and thats - so everything - you cant solve everything in life. You do the best you can with it, and - People do interesting things. Ive been around probably as many rich people as almost anybody. And a fair number of them I know what theyre doing or have done with their funds. And the idea that you can have a huge amount of money, and leave everybody very rich, and have people liking each other less (laughs) when it all happens is - Humans are really - they are interesting to watch. Some of them handle it beautifully and others are terrible at it. One thing lawyers will always tell you is dont use codicils. In other words, you know, when you change your mind on a will, just write a new one, but tear up the old one. Dont do it by just adding codicils. But I believe Im correct - certainly read it - that Paul Getty, who was the richest man in the world, presumably, at one point in the 1950s or 60s - and hes a very interesting guy to read about. And he had five - five wives. And hes the one whose grandson was kidnapped. And they sent Paul Getty an ear of the child and everything. I mean its not a happy life, when you get through it. But the one thing he did that was kind of interesting, he actually liked to use codicils, because I think he had, like, 25 of them. And it was kind of his way of writing, well, Im taking you out of the will because, you know? And so he sort of delighted in explaining through his will what - how he felt about (laughs) all these people. I mean, you really get some strange things revealed in a will. I just read about a will of a fellow who made a whole lot of money and was leaving it to his - I dont know whether his children, grandchildren, or whatever it may have been - but in any event, his opening line in his will is - and this was done some years ago - but I know something about the family. His opening line, in effect said, Im writing this will while Im I am riding in the economy section of Eastern Airlines number such and such. I mean he believed in getting right to the point of what - (laughs) - what the people who were recipients, how they should live. (Laughs) And he was going to be judging them. And its just so damned interesting to watch peoples wills. But - One guy left a lot of money to his wife on the condition that she remarry so that at least one man would mourn his passing. You know? (Laughter) Well, Im not giving legal advice here, as they always say, but - (Laughter) I feel very, very, very good about how things have turned out. And I wish I could figure out ways better to use, you know, the really vast resources Ive got in some of the really important questions of the world. But - but I haven’t been able to do that. I mean, I had a few goals when I was 30 or 40, and may have written them into wills then, in terms of what the world needed done, and how the money could be used. And unfortunately, I decided that it just - they just werent feasible to accomplish. And of course, I was setting out to accomplish things that were important, but nobody had solved yet. So you got to expect (laughs) why should I be able to solve them? And nevertheless, its an interesting - and the one thing about it is everybody here - I dont know about the ones who have come from other countries - but they should - you should have a will. Because if you dont have a will, you still have a will, and it will be whatever the state says. And its amazing. Four American presidents died intestate, without wills. Four. You know, weve only had 45. And imagine becoming president of the United States and not having a will? But you can look up - somebody recently - I think Lincoln. Im certain Lincoln was one of the four. And heres a man - I mean - I dont know whether - you can always say, well, he didnt get around to it, but thats hard to imagine that why Abraham Lincoln would have died intestate. Im sure weve got some Lincoln scholars out there that will write me after this and explain why, but I - and Ill be interested to receive their letters. But human beings are human beings. And we all have weaknesses and peculiarities and everything else. And dont be too hard on yourself because you have some of those. But dont be totally forgiving either. (Laughs) You can change the future. You cant change the past, but you can change the future.

Too early to predict how AI will affect Berkshire and the world

WARREN BUFFETTOK. Station six.

AUDIENCE MEMBERGood afternoon. My name is Caroline, and Im a lawyer in San Diego -

WARREN BUFFETTI'm already in trouble! (Laughs)

AUDIENCE MEMBER- but please don't hold that against me. Remember, Mr. Munger was once an attorney, too.

WARREN BUFFETTRight.

AUDIENCE MEMBERFirst, Id like to sincerely thank you, Mr. Buffett, for your business integrity, tireless leadership, and generous contribution to philanthropy. My question for the distinguished panel of two is, now that the AI genie is out of the bottle, as someone astutely put it earlier today, what business in Berkshire Hathaway may be most at risk with AI?

WARREN BUFFETTWell, thats a wonderful question. The problem is I really dont know anything about AI. But - (laughter) - obviously, you know, anything thats labor intensive and that - it can create an enormous amount of leisure time. Now, what the world does with leisure time is another question. Whether more leisure time - I know an awful lot of people think when they go to work at first that what they want is leisure time. And what I like is actually having more problems to solve. But AI is profound. I mean, thats what makes it - makes it a genie. You know, is what can happen. I'll - I could tell a few genie jokes, but I better not. (Laughs)

GREG ABELI guess, Warren, we probably dont -

WARREN BUFFETTI dont know what -you know - in terms of our businesses, theyll figure things out. I mean weve got smart people and its - Obviously, if its used in a pro-social way, its got terrific benefits to society. But I dont know how you make sure that thats what happens any more than I know how to be sure that when you use two atomic bombs in World War II that you knew that you hadnt created something that could destroy the world later on.

GREG ABELYeah. Yeah, I think when we think of AI at a lot of the business units, I mean were truly, Warren, trying to think how does it make us more efficient, more effective? I mean, it results in more idle time, and were probably not thinking of the iterative AI where were looking at very specific processes where our people can implement it and either - At times, it displaces the labor, but then hopefully theres other opportunities for them within the business. But I think, you know, when you think of all our businesses, I mean, we do have a heavy labor workforce in a lot of them, but I think at the stage were at, as a company and maybe where its at right now, its really around how do we do things more effective, more efficiently. More safely, if it involves dangerous processes. So it's - were early innings. (Laughs)

WARREN BUFFETTJohn Maynard Keynes, who was just wonderful to read, an incredible mind, but in around the time I was born, he wrote a book about what could happen - I dont know whether it was in the next 100 years or whatever - and he predicted, correctly, that output per capita would grow at this incredible rate that it has. But, in terms of speculating as what people would do with that - I mean, this guy was unbelievably smart. (Laughs) But it hasnt developed exactly the way he predicted. He was right about what was going to go into the equation, but he wasnt - he didnt have it figured out exactly what - at all - what would be the result. So it's - it is - it is really - well, we didnt know when we were developing the bomb that there would probably be as - very soon - nine countries, three of whom we should worry about plenty that will have what they have. But we didnt really have any choice. And you could have had all kinds of papers written on it and everything else, but we were going to do it anyway. We needed to do it. And if you havent read it, its fascinating to go to Google and read the letter by Leo Szilard and Albert Einstein to President Roosevelt, written about a month before - well, almost exactly a month before the Germany - or Hitler - moved into Poland [in 1939.] And it laid out - well, Leo Szilard knew what was going to happen, or had a good hunch of what was going to happen, in terms of nuclear bomb development. And he couldnt get through to Roosevelt, but he knew that a letter signed by Albert Einstein would. So its probably the most important letter ever written. And you can read - which - its just fascinating to me - but that started the Manhattan Project, that started - you know, it just - everything flowed out of it. And like, Ill bet anything that Roosevelt didnt understand it, but he understood that Albert Einstein had (laughs) sent a letter, and he probably knew what he was talking about. And he better get - he better start the Manhattan Project. It is - it is just unbelievable what happens in this world.

Buffett more worried about fiscal deficits than quantity of U.S. debt

WARREN BUFFETTAnyway, lets move on to Becky, I guess, whos next, right?

BECKY QUICKYep. Randy Jeffs from Irvine, California. "The March 25, 2024 Wall Street Journal reported that the Treasury market is about sixfold larger than before the 2008-2009 crisis. "Do you think that at some point in time the world market will no longer be able to absorb all of the U.S. debt being offered?"

WARREN BUFFETTWell, I would say - and the answer is, of course, I dont know. But the - my best speculation is that U.S. debt will be acceptable, but - for a very long time, because theres not much alternative - but it wont be the quantity - you know, any - you know, the national debt was nothing to speak of like, you know, for a long, long time. And then - It wont be the quantity. Itll be whether, in any way, inflation would get let loose in a way that really threatened the whole world economic situation. And there really isnt any alternative to the dollar as a reserve currency. And you get a lot of people who will give you a lot of speeches on that, but that really is the answer. And Paul Volcker worried about that back in 19 - you know - well, before 1980. But - but he had threats on his life, and I happened to have a little contact with him at that time. And he was an amazing, amazing fellow that, in effect, decided that he had to act or the whole - really the financial system would fall apart in some way that he couldnt predict. And he did it, and, you know, had people threatening his life and do all kinds of things. But he was the man for that crisis. But it wasnt the quantity of U.S. debt that was being offered that threatened the system then. It was the fact that inflation and the future value of the dollar, you know, the cash is trash type thinking that turn - and, you know - that was setting up something that could really affect the future of the world, in terms of its economic system. And Paul Volcker took it on. And he was gutty it could be. And if you haven't read a book or two about him - or the one he last wrote - youd be able to take a look at it. But it is - I dont worry about the quantity. I worry about the fiscal deficit. You know, if it - but Im not a worrier, just generally. I mean, I think about it, and - but I dont sit and get up - work myself into a stew about it in the least. But I cant help thinking about it. And thats - Weve got a - we've got a great attention - its interesting - I think it maybe enters into this in the - focusing - that focuses on the Fed. And they, you know, they just love it, because things are always happening and economists are always saying whats going to happen with the Fed and everything else. But the fiscal deficit is what should be focused on. And [Federal Reserve Chair] Jay Powell is a - not only a great human being, but hes a very, very wise man. But he doesnt control fiscal policy, and every and now then he sends out a kind of a disguised plea for, (laughs) please - please pay attention to this, because thats what the trouble will be, if we have it. Yeah. (Applause) As one of the comics used to say - theres a stand-up comic who used to say, "Who have I forgotten to offend?" after - at his talk. And (laughs) I always feel like that after these meetings.

'Be kind - and the world's better off'

WARREN BUFFETTBut weve got time for at least one question, and maybe two. But lets go to station seven.

AUDIENCE MEMBERHello, my name is Dennis (PH) from Gifhorn, Germany. Im a first time here. Im here with my friend who would, by the way, love to invite you to dinner. You talked about the importance of heroes, and we are very happy to - and thankful that we have you as our hero with great values, and thank you for that, first of all. My question is, it is clear that you achieved great success in life. Earlier, you talked about every investment having opportunity cost. From what Ive learned in life, that does not only apply to investing your money but also to investing your time.

WARREN BUFFETTRight.

AUDIENCE MEMBERAnd every hour you spend in your office is an hour you cannot spend with your spouse or children. With the life experience you have now, if you had the possibility to start all over again, would you set your priorities any different? If yes, how and why? And whats the best way to invite you to dinner? (Laughter)

WARREN BUFFETTWell, that definitely wont be one of my priorities, if I figure out how to - (Laughter) But that doesn't - dont take it personally, because - you know - you can figure out, at the maximum, how long a period Ive got, and - No, I dont think - I mean, I can figure out all kinds of things that should have been done differently, but so what? You know, I mean, Im not perfect. I dont believe in lots of self-criticism or being unrealistic about either what you are, or what youve accomplished, or what youd like to do. You do the - you know, you do a lot of things. And who knows whether somewhat different tradeoffs - you know - you just cant - you can’t - you dont know where the paths wouldve led. I feel - I dont think theres any room in beating up yourself over whats happened in the past. You know, its happened, and you get to live the rest of the life. And you dont know how long its going to be. And you keep trying to do the things that are important to you. And if I was a doctor or if I was in, you know, all kinds of different professions, I might do different things. But I really enjoy managing money for people who trust me. I dont have any reason to do it for financial reasons. You know, Im not running a hedge fund or getting an override or anything. But I just like the feeling of being trusted. Charlie felt the same way. You know, thats a good way to feel in life. And it continues to be a good feeling. So Im not really looking to change much. And, you know, if Im very lucky, I get to play it out for six or seven years and it could end tomorrow, but thats true of everybody, although the equation isnt exactly the same. But I dont believe in beating yourself up, though, over anything youve done in the past. And I dont believe in - well, I believe in trying to find, you know, what youre good at, what you enjoy. And then I think the one thing that you can aspire to be - because this can be done by anybody and its amazing - doesnt have anything to do with money - but you can be kind. You know, thats - You can be kind if youre - and then the worlds better off. (Applause) Im not sure that the world will be better off if Im richer. But theres no question that - I mean, and you know kind people. And in the end, aspire to be more - or Im sure many of you are yourself - but just aspire to be more so.

'If youre lucky in life, make sure a bunch of other people are lucky, too'

WARREN BUFFETTAnd I guess we can take one more question from Becky, and then well wind up.

BECKY QUICKThis question comes from Devon Spurgeon. (Buffett chuckles) "On March 4th, Charlies will was filed with the County of Los Angeles. The first codicil contained an unusual provision. It reads, Averaged out, my long life has been a favored one, made better by duty imposed by family tradition requiring righteousness and service. "Therefore, I follow an old practice that I wish was more common now, inserting an ethical bequest that gives priority not to property but to transmission of duty. "If you were to make an ethical bequest to Berkshire shareholders, what duties would you impose and why?"

WARREN BUFFETTId probably say read Charlie. (Laughs) Hes expressed it well. And I would - well, I would say that if theyre not financially well off, if youre being kind, youre doing something that most of the rich people dont do (laughs) even when they give away money. But thats not a question of whether youre rich or poor. And I would say if youre lucky in life, make sure a bunch of other people are lucky, too. (Applause)

'I not only hope you come next year, but I hope I come next year'

WARREN BUFFETTOK. Theres - Just in case you [want to] know what my advice to myself would be - has been during this period. (Buffett holds up sign that had been facing him that says, "SHUT UP!") (Laughter) So we only got thirty, what, -three questions or whatever it is. But thank you very, very much for coming. And I not only hope that you come next year, but I hope I come next year. (Laughter and applause) Thank you.