Becoming Warren Buffett - HBO Documentary

Video Transcription:

  Becoming Warren Buffett - HBO Documentary (2017)

Woman: And now one of the most respected investors in America is going to tell you about his secrets. Man: "Warren Buffett." It's the sound of money. $9.2 billion... Woman 2: Billionaire investor Warren Buffett, the second richest man in America. Man 2: He's estimated to be worth about $62 billion. That makes him the richest man in the world. ???? Woman 3: You know, Buffett is not exactly what you might expect. Woman 4: Even though he's in the money business, he doesn't even own a calculator or a computer. Man 3: He takes the long view, and it's made him billions, many billions. Man 4: Maybe you can beat the house, but I don't think you can beat Warren Buffett. Man 5: Buffett filed his first tax return at 13 years old. But he's no average billionaire, Tom. Tom: No, he certainly isn't, Matt. Woman 5: He's a $44 billion average Joe. Man 7: Warren Buffett has an approach that doesn't make him very popular with his fellow billionaires. Man 8: Warren Buffett, the boy from Nebraska who grew up to become the Wizard of Omaha. Man 9: What was it about him that allowed him to become the richest man in the world? How did he do it? ???? Warren: 70 years ago, I was in high school. Almost a third as long as the country has been around. And when I was in high school, I really only had two things on my mind... girls and cars. And... and I wasn't doing very well with girls, so we'll talk about cars. But lets just imagine that when we finish, I'm going to let each one of you pick out the car of your choice. Sounds good, doesn't it? Pick it out, any color, you name it, it'll be tied up with a bow, and it'll be at your house tomorrow. And you say, "Well, what's the catch?" And the catch is... that it's the only car you're going to get in your lifetime. Now what are you going to do, knowing that that's the only car you're ever going to have and you love that car? You're going to take care of it like you cannot believe. Now what I'd like to suggest is that you're not going to get only one car in your lifetime, but you're gonna get one body and one mind, and that's all you're going to get. And that body and mind feels terrific now, but it has to last you a lifetime. I'm on the way to the office. It's all of a five-minute drive. Been doing it... for 54 years. One of the good things about this five-minute drive is that on the way there's a McDonald's, so I'll pick up something. Woman on speaker: Good morning, thank you for choosing McDonald's. Go ahead and order whenever you're ready. I'll have a Sausage McMuffin with egg and cheese. Woman: Anything else? That's it, thank you. Warren: Yeah, and I tell my wife as I shave in the morning, I say either $2.61, $2.95, or $3.17, and she puts that amount in a little cup by me here and that determines which of three breakfasts I get. Hi. 2.95. Okay, 2.95. There's the two. How you doing, sir! Hey, great! You're on "Candid Camera"! I see. Hello, everybody! Warren: When I'm not feeling quite so prosperous, I might go with a 2.61, which is two sausage patties, and then I put 'em together and pour myself a Coke. Hi, how are you? Hi. I've been good. 3.17 is a bacon, egg, and cheese biscuit, but the market's down this morning, so I think I'll pass up the 3.17 and go with the 2.95. ???? Warren: I like numbers. It started before I could remember. It just felt good, working with numbers. I was always playing around with numbers in one-way or another. And it was fun to have a bunch of guys over and have them betting on which marble would reach the drain first. I had a lot of energy as a kid. I... I was inquisitive, and I was the youngest one always in the class, 'cause I'd skip. I've always been competitive. I liked to read more than most kids. I really like to read a lot. My Aunt Edie gave me a copy of "The World Almanac" and that was heaven to me. And I can still tell you that Omaha's population was 214,006 in 1930. Some numbers just kind of stick with you. And very early, probably when I was seven or so, I took this book out of the Benson Library called "A Thousand Ways to Make a $1,000." And one of the ways in this book was having penny weighing machines. And I sat and calculated how much it would cost to buy the first weighing machine, and then how long it would take for the profit from that one to buy another one, and I would sit there and create these compound interest tables to figure out how long it would take me to have a weighing machine for every person in the world. I had everybody in the country weighing themselves ten times a day, and me just sitting there like John D. Rockefeller of weighing machines. The allowance when I was a little boy was a nickel a week, but I liked the idea of having a little more than a nickel a week to work with, and I went into business very early. I started selling Coca-Cola door to door. I sold gum door to door. I sold "Saturday Evening Post," "Liberty" magazine, "Ladies Home Journal," you name it. I think I enjoyed the game almost right from the start. But I like being my own boss. That's one thing I liked about delivering papers. I could arrange the route I wanted. Nobody was bothering me at 5:00 or 6:00 in the morning. I was delivering 500 papers a day, and I made a penny a paper, but in terms of compounding, that penny's turned into something else. ???? Einstein is reputed to have said that "Compound interest is the eighth wonder of the world" or something like that, and it goes back to that story you probably learned when you were in grade school where somebody did something for the king, and the king said, "What can I do for you?" And he said, "Well, lets take a chessboard "and put one kernel of wheat on the first square "and then double it on the second and double it on the third." And the king readily agreed to it, and by the time he figured out what two to the 64th amounted to, he was giving away the entire kingdom. So it's a pretty simple concept, but over time, it accomplishes extraordinary things. Berkshire is an amazing company. Fourth largest company in the "Fortune" 500. He is the only person who has ever, from scratch, built a company that is in the top 10 of the Fortune 500. Woman: Berkshire Hathaway. Fine, thank you. Warren: Well, Berkshire is a holding company of sorts. It owns a large number of separate businesses that operate independently of each other and, to a great extent, from the parent company, Berkshire Hathaway. All right, well, we're going to get more from you in a second. Warren: So we have maybe 70, maybe 80 businesses, and we ask them to behave in a way that doesn't hurt our reputation at Berkshire Hathaway, but they run their own lives. Other people do most of the decorating in the office, so various things come in. Originally, when I moved in in 1962... you can see this... I went down to the South Omaha Library, and I think for a dollar, I got seven copies of old "New York Times" from big times like the Panic of 1907. This is one... 1929 obviously. But I wanted to put on the walls days of extreme panic in Wall Street, just as a reminder that anything can happen in this world. I mean it... it's instructive art you can call it. ???? I was born in 1930 here in Omaha, Nebraska, during the stock market crash. My dad lost his job in 1931, a year after I was born. He was a stock salesman, and he had what little savings he had in the bank, and so he started his own company. He worked right through the depression. ???? Bertie Buffett: He had an investment company, and as an adult when I looked back, I thought, "Wow, did that ever take a lot of nerve." Sometimes we'd go down there on Sunday, and we could play with the adding machine. My brother and I tended to play the games together. And I remember at one point he said to me, "I'm going to be a millionaire by the time I'm... 30," or something like that. It was totally outside of anything my family had experienced, but he just was unusual that way. Doris Buffett: Well, I was the oldest, and then my brother and then my sister. And my father would go to New York periodically to check on businesses, stocks, and things like that, and he'd come back, he'd always have a costume for each of us, and Warren loved it. He was very good-natured. He was quiet. It was hard to tell he was a genius at that point, but I mean, who was looking? Warren: The first books I read on investment were actually in my dad's office. Pretty soon, I read all the books in the office and read some of them more than once. My dad had various nicknames for me. He'd call me "Fireball" sometimes, because I'd start little businesses. He didn't care about money at all. He believed very much in having an inner scorecard and never worry about what other people are thinking about you. You know, just... just... if you know why you're doing what you're doing, that's good enough. I admired everything about him to the extent that I was absorbing lessons from him without knowing it. And the idea that all lives have equal value is something that all three of his children felt since I can remember. My dad at one point ran for congress when I was 12 or so. It was a very republican household. I campaigned for him. My sisters campaigned for him. The whole family did. My mother was very, very bright, and she was very gregarious. She was a good campaigner for my dad. Bertie: She had a lot of ambition, and I think my brother Warren got a lot of his extreme competitiveness from my mother, actually. Doris: She was brilliant at math. You know, I guess they still had these things where you crank them and things added up, and she could add it in her head faster than the machine could do it. She was absolutely amazing in that. Warren: She was very dutiful about taking care of the kids, but you didn't get the same feeling of... of love. It was there, but it just... it didn't come out the same way as with my dad. Howard Buffett, Sr. on radio: In the nation, the only permanent way to prosperity is a balanced budget. Unless that goal is achieved, all post-war plans will collapse like Hitler's conquest. Man on radio: You have heard Congressman Howard L.H. Buffett, a Republican member of the House of Representatives from Nebraska speaking on the... Warren: When I was about 12 or 13, we moved to Washington, my family, and I was mad. I was having fun in Omaha, and I lost all my friends, and now I moved to a town where they were all strange, and so I was very, very unhappy. ???? At school, I just lost interest. I took pleasure in tormenting my teachers. At that time for example, AT&T was the stock that all teachers owned for their retirement, and I decided that it would drive my teachers a little crazy if I went and short the stock, because when you go short a stock, you're betting that it will go down. So I shorted 10 shares of AT&T, and then brought the confirmation to school and showed these teachers I was shorting the stock. They found me a big pain in the neck, but they did think I knew a lot about stocks. ???? And then at home, my mother would have terrific headaches, and you didn't want to be around her when she was having the headaches, and she would... she would lash out more. She would never do it in public. Doris: Well, I think we were terrified of her. ???? When I'd wake up in the morning, I'd listen to hear her voice. I could tell by her voice if it was going to be a terrible day or not. Warren: When she got difficult, the three children felt it. When I was at the low point, sort of, I decided that I would run away. So I talked two other guys into running away with me. We went out, and we start hitchhiking... and then we got picked up by the highway patrol and that scared the hell out of us. It's very interesting. My dad never really gave me hell about doing this, but he finally said, "You know," he said, "you can do better than this." And just saying that, I mean, I... I felt like I was letting him down, basically. So in all ways, he was teaching me. Never taught by telling me things, he just taught by example. He had unlimited confidence in me, even when I screwed up, and that takes you a long, long way. The best gift I was ever given was to have the father that I had when I was born. I didn't want to go to college. I was 16 when I got out of high school and I was buying stocks. I mean, I actually was having a pretty good time and I didn't see that really was much to be gained by going to college, but my dad kind of jollied me into it. ???? Doris: He had a roommate who was a friend of mine, and the roommate said it would just drive him crazy, because he studied all the time, and Warren would come in 15 minutes before the exam and just ace his way through it. Warren: I finished in three years, 'cause I had enough credits, and I was in a hurry. I wanted to get out. Warren: When I got out of the University of Nebraska, I applied to Harvard Business school. They told me I was to get interviewed in a place near Chicago. I got there, and he interviewed me for about 10 minutes, and he said, "Forget it." "You're not going to Harvard." And so now I'm thinking, "What do I tell my dad? Oh, this is terrible." And it turned out to be the best thing that ever happened to me. Later that summer, I was looking through a catalog and in the catalog, it had these names of people that were teaching, and one was Graham and another was Dodd. I had read this book by the two of them, so I wrote him a letter in mid-August, and I said, "Dear Professor Dodd," I said, "I thought you guys were dead." "But, now that I found out that you're alive and teaching at Columbia, I would really like to come." And he admitted me. So, you know what? That... it just shows, you never can tell. ???? Man: Gentlemen, Professor Graham. Warren: Ben was this incredible teacher. I mean he... he was a natural, and he drew us all in. Are Wall Street professionals... they more accurate in the shorter term than the long term forecast? Well, our studies indicate that you have your choice between tossing coins... and taking the consensus of expert opinions, and the results are just about the same in each case. Warren: It was like learning baseball from a fellow who's batting .400. It really... it shaped my professional life. There are two rules of investing according to Warren, and he learned this from Ben Graham. ???? Rule number one, never lose money. Rule number two, never forget rule number one. Ben Graham basically coined the term "value investing." He believed in careful scrutiny of a company's financial statements, and that if you bought value, it would eventually prove out. A few years ago, I went to Amazon, and sure enough, they had this manual there, so while reliving my youth... other guys were going to Amazon and probably buying old "Playboys" or something, but I bought old Moody's manuals instead, and when I got out of school, I started selling stocks, I was 20 years old at the time, looked about 16, and acted about 12, so I was not the most impressive salesperson anybody ever met. But what I would do was I went through, page by page, looking for possibly undervalued stocks. Peter Kunhardt: Is this like going through an old family album? Better! ???? When I got out of business school at Columbia, I developed pretty decent skills in terms of business, but I hadn't really come to terms with the world exactly. Kunhardt: What were you like around girls back then? Bad. I was... I was sort of out of the swing of things there for a while. I went to my 60th reunion, and there was a girl there. I took her out one time to the Uptown Theater in Washington, and I asked her whether she remembered what movie we saw, and she said, "No, I don't remember that." And then she said, "But I do remember one thing." And like an idiot, I said, "What was that?" And she said, "Well, you picked me up in a hearse." And it was true that I owned a half-interest in a hearse while I was in high school, which was not the smoothest thing that... or coolest, as they would say now... that you could... you could do on a date. There were two turning points in my life. Once when I came out of the womb, and once when I met Susie, basically. ???? She was the girl, yep. But it took her a little longer to figure out I was the boy. Susie Buffett: I was going to be his youngest sister's roommate at Northwestern. So I walk into their house, he was sitting in this chair, and he made some sarcastic quip. So I made one back. I thought, "Who is this jerk?" ???? And that's how we met, yes. Listen, Warren is smarter than you even know. His brain is going all the time. And my dad said to me, "Now you have to understand about him... "you're not going to have discussions with him "like you would most normal people, but he has a heart of gold." He was just totally enamored of her, and why not? And she of him. She'd sit on his lap all the time, and he'd stroke her hair. It was softening him. Susie was really kind, considerate, and she was the balancing force. Warren: I just got very, very, very lucky. But I was a lopsided person, and it took a while, but she just stood there with a little watering can and just nourished me along and... and changed me. ???? Somebody once said that the chains of habit are too light to be felt until they're too heavy to be broken. I had been terrified of public speaking. I couldn't do it. I'd throw up. And I knew if I didn't cure it then, I'd never cure it. ???? And so I saw an ad in the paper for the Dale Carnegie Course, which worked on developing your ability to speak in public, and I went down there. Dale Carnegie: Be sincere. A good smile has the same effect as a puppy's tail. When a puppy wags... Warren: They made us do all these crazy things to get out of ourselves, and so we stood on tables and did all kinds of things. Warren: If I hadn't had done that... my whole life would have been different. So in my office you will not see the degree I got from the University of Nebraska. You will not see the Masters degree I got from Columbia University, but you'll see the little award certificate I got from the Dale Carnegie Course. As a matter of fact, every week, the instructor would give a pencil to whoever had done the most with what we'd learned the week before. And so in the fourth or fifth week, I proposed to her mother, and she said yes. And so that week, I won the pencil, I also got engaged, and it was an incredible week. ???? Warren: The wedding date was kind of interesting, because I couldn't see anything without my glasses, and I was so nervous that I... I just decided to take off my glasses and I wouldn't be able to see all those people out there. ???? She was 19 when we got married and I was 21... but she was so much more mature than I was. There was no comparison. She was a better person than I was... but when you get married, it's not a question of saying, "I'm going to put a 14% factor in for humor, and 17% for intellect, and 22% for looks." It doesn't work that way. I knew it was the right decision, and... and it was. Woman: You could live anywhere in the world. Why do you choose Omaha, Nebraska? Yeah, I love it, and I... you know, I was... born about a mile from here and, you know, I've never had a bad experience in Omaha. ???? Well, Omaha and Nebraska are home to me. Everything about it seems like home. It's a pace, it's relationships. There's a lot of continuity. There's a lot of community. There's a lot of friendship. It's a very solid place and friendly place in which to grow up in, in which to conduct a business. When I came back to Omaha in early 1956, I had no idea what I was going to do. A few months after I came back, some members of the family said, "What should we do with our money?" And I said, "Well, I'm not going back "in the business of selling stocks, but if you would like to join me in a partnership," I said, "I'll be glad to do it." So within a couple of months after coming back, I set up the first partnership. ???? I wrote all the checks individually. I filed 11 income-tax returns. I took delivery on stocks for all these different companies. I... I was a one-man band there for six years. Sandy Gottesman: Warren would sit upstairs in his little office there, and I would bring up the name of a company, and most of the time he knew much more than I did about the company. He'd know how many shares were outstanding. He'd know the capitalization. He'd know the earnings. It was absolutely incredible. I mean when Warren said something, it meant a heck of a lot, and I think all of us paid a lot of attention to Warren when he took a definite stand on something. Charlie Munger: When I first met Warren back in 1959, I recognized immediately that he was a very intelligent person. For the last four or five years, the stock market has been booming along and presumably forecasting better business, which has really not materialized, so maybe the stock market is really correcting a previous incorrect forecast this time rather than making a new correct one. He made a lot of money buying thinly traded securities that were incredibly cheap statistically. ???? Loomis: Warren was, at that time, dealing with small companies, and his investments often were to buy a company that you could figure was a discarded cigar butt, but it had one more smoke in it, and he wanted to buy at the right time to be able to benefit from the one smoke. The first partnership started with $105,100. I put up the 100, and the other people put up the 105,000. And then at the start of 1962, I moved to Kiewit Plaza. And by the time I moved to Kiewit Plaza, we had $7 million invested, and a fair amount was profits. ???? I was then renting a house. I never owned a house to that point. And then two years later, I bought the house I live in today in 1958. We had three children, Susie and I. And we had 'em young, incidentally, which was I think was a very good thing. ???? My daughter Susie was born here. I named her Susie just like that, as soon as I looked at her, because she looked just like her mother, ???? And she was a cinch. And then Howie was, you know, this absolute bundle of energy... which made things very difficult for big Susie for a while. Peter again reverted back to Susie's personality, and he was an easy child. Howard Buffett: Well, I would describe my childhood as normal, but who knows what normal is? People often think, "Well, Warren Buffett was this famous rich guy." He was not famous, and he wasn't rich when we were growing up. ???? What I saw first and foremost, day in and day out, was consistency. Every day we hear the garage door close in the house and then like clockwork, my dad would come in the door, "I'm home!" and we'd all eat dinner together, which I think surprises a lot of people. Susie Buffett, Jr. : My dad, he used to rock me to sleep at night and sing "Over the Rainbow," so I have this insanely sentimental attachment to that song. I've always had a really close relationship with him. ???? Warren: I've got three very different kids, and they've got a common heart, which they got from their mother. She did most of the work by far of bringing up the children, which is probably a good thing. They have more of her qualities than mine, which I would... I would recommend. Howard: Well, my mom was the biggest part of my life growing up... even though I got disciplined on a regular basis and she was usually the one doing it, she was still my best friend. She was somebody who would help anybody, I mean, whether she knew 'em or didn't know 'em or maybe even didn't agree with them, she would still help them. Warren: She was incredibly empathetic, and she was interested in every person individually. She never cared about money or business at all. Susie: I mean he would go around saying, "I'm going to be the richest man in the world." And I think, well, it's like somebody says, "I play music, and I'm gonna be Mozart." I don't know. How does anyone know... How does anyone know? You know? So that was okay. I don't really care about that. Loomis: I would say that Susie led Warren toward changing his political views. He grew up as a young Republican, his father was a Republican congressman, but Susie saw things in different ways. She was the catalyst. Freedom, freedom, freedom! Louder, louder, louder, louder, louder! Freedom, freedom... What do we want now? Susie: When the children were growing up, I was very involved in civil rights. I was immersed in it, and I think that's what made Warren a Democrat. He would go with me to hear speakers. Warren: I remember that speech that Martin Luther King gave. That was one of the most inspiring speeches I... I've ever heard. I come to say to you this afternoon... Warren: Took me right out of my seat. My wife was with me. We both had the same experience. Martin Luther King: It will not be long. It was interesting, he... in that speech, he talked about truth forever on the scaffold, long forever on the throne, but that scaffold sways the future. Well, he was going to be dead in six months, but that scaffold did sway the future. My wife was more active than I was, but I was 100% with her mentally. I was just working a little more on my own investments. But it didn't make a difference what we were gonna do with the money after we made it. I thought I would pile it up over the years then she would unpile it in terms of running a... one very large foundation. And I was particularly good at compounding money, and therefore society would benefit by waiting. ???? I was genetically blessed with certain wiring that's very useful in a highly-developed market system where there's lots of chips on the table, and you know, I happen to be good at that game. Ted Williams wrote a book called "The Science of Hitting," and in it he had a picture of himself at bat and the strike zone broken into, I think, 77 squares. And he said, if he waited for the pitch that was really in his sweet spot, he would bat .400 and if he had to swing at something on the lower corner, he would probably bat .235. And in investing, I'm in a no-called strike business, which is the best business you can be in. I can look at a thousand different companies, and I don't have to be right on every one of them or even 50 of 'em... so I can pick the ball I want to hit. And the trick in investing is just to sit there and watch pitch after pitch to go by and wait for the one right in your sweet spot. And the people that are yelling, "Swing, you bum"? Ignore 'em. There's a temptation for people to act far too frequently in stocks, simply because they're so liquid. Over the years you develop a lot of filters, and I do know what I call my circle of competence, so I-I... I stay within that circle, and I don't worry about things that are outside that circle. Defining what your game is, where you're going to have an edge is enormously important. ???? I bought the first shares of Berkshire in 1962, and it was a northern textile business destined to become extinct eventually, and it was a statistically cheap stock in a terrible business. Berkshire Hathaway was closing mills and as they closed mills, it would free up some capital, and then they would repurchase shares, so I bought some stock with the idea that there would be another tender offer at some point, and we would sell the stock at a modest profit. And at one point, the management asked me at what price we would tender our stock, and I said, "$11.50." ???? And the tender offer came out a few months later, and it was at $11 and 3/8ths, which was an eighth of a point cheaper. And that made me very mad, so I just started buying more stock. I just felt that I'd been double-crossed by the management. And in May of 1965, I bought enough so we controlled the company, and we changed the management. It was a pretty silly way to behave, as Warren has recounted in retrospect. One of the reasons Warren is successful is he's brutal in appraising his own past. He wants to identify misthinkings and avoid them in the future, but it was an accident that he chose Berkshire Hathaway. If the chairman hadn't tried to cheat him out of an eighth, there wouldn't have been any Buffett- Berkshire Hathaway history. Warren: If you're emotional about investment, you're not going to do well. You may have all these feelings about the stock. The stock has no feelings about you. Looking back, it's interesting, that tender offer... I didn't realize it, but it... it happened about five days after my dad had died and whether that had affected me or not, I don't know. ???? Kunhardt: Do you remember your last conversation with your father? Yeah, but I don't want to talk about it. Munger: I think it just sobered him and hurt him, but... Warren soldiers on. Both Warren and I could look at our fathers and see what they did right and what they did wrong. Warren's father was a real old-fashioned right-wing ideologue. And his father was so intense about it, that Warren just decided that it was mistake... it cabbaged up your head to be that much an ideologue, so he loved his father, but he didn't want to become that much of a true believer in... in anything. My politics became more overt after my dad died. ???? Civil rights changed my views. You know, in 1776 Thomas Jefferson wrote, "All men are created equal," and then when they wrote the Constitution, they all of a sudden decided that, no, it was just 3/5ths of a person if you were black. I mean, that struck me as kind of crazy. ???? Susie: I was talking to him one day about some racial issue, and he said to me, "Wait till women discover they're the slaves of the world." Now how many men were cognizant of that, and even women then? Warren: The initial example is really my mother. She came from a generation where the main function of the wife was to help her husband in the job. And my sisters are fully as smart as I am. They got better personalities than I had, but they got the message a million different ways that their future was limited, and I got the message that the sky is the limit and it wasn't due to a lack of love or anything of the sort. It just... it was the culture. On the other hand, you can look at the flip side of that and say it's quite encouraging, because if you look at what this country accomplished only using half of its talent, just think of the potential for the future. I'm enormously bullish on America over the future and part of the reason is that we, by some rather stupid decisions, essentially put half our talent on the sidelines. Loomis: Warren is probably the most rational person I've ever met. Charlie Munger would be a close rival. And Charlie became a man that Warren depended on heavily and I think his first experiences in the discarded- cigar-butt era convinced him that it was not exactly where he wanted to be. Munger: He made so much money for so long doing what he'd been taught by Ben Graham, which he'd buy these very cheap stocks. If they were cheap enough, he didn't care it was a lousy company and a lousy management. He knew he was going to make money anyway, just because of the cheapness. Warren: Charlie Munger has had a big impact on me in moving me toward looking for wonderful companies at fair prices rather than fair companies at wonderful prices. That was enormously important, because it enabled Berkshire to scale up in a way that would have been impossible to do otherwise. Yep? Man: What are the key indicators you'd look for within companies before making an investment? Well, I look for something that does give them a moat around it. ???? We have a company called See's Candies out on the west coast. See's Candies Boxed Chocolates. If you give a box of See's chocolates to your girlfriend on the first date and she kisses you? We own you. You know? I mean we... we can raise the price tomorrow. I mean, you'll buy the same box. You're not gonna fool around with success, so the key there is the response. You do not want to get home on Valentine's Day and say to your wife or your sweetheart... preferably they're the same person... you don't say, "Here, honey, I took the low bid." It doesn't work. Price is... to a degree, is immaterial. If you've got an economic castle, people are gonna come and wanna take that castle away from you. You better have a strong moat. You better have a knight in the castle that knows what he's doing. You're not buying an asset, you're buying a name, you're buying a brand, you're buying a real franchise here, and Charlie was more responsible for that than anybody. ???? Warren: We were mental partners right from the moment we met. Woman: I wanna know, going back 50 years, what it was like when you first met Warren. Well, I thought he was a prodigy... and I got a lot of criticism. My wife said, "Why are you paying such enormous respect "to that young man with a crew cut who won't eat vegetables?" Warren: He's ungodly smart. He's got a much broader intellect than I do, and he's magnificent at being able to condense important ideas into just a very few words. If you're not interested in the economic scene right now, you're mentally dead. Charlie has no tact. Woman: All right, let's talk a little bit about bankers. Charlie, on Friday, compared them to heroin addicts. Yeah, well, that's colorful Charlie, but I would not have chosen that. Loomis: I once wrote of him that when they handed out humility, he didn't get his fair share. The ideal way to run a headquarters is to have one man, preferably over 80, sitting in an office by himself. Anything else is pure frippery. Warren: He's always honest in what he tells me, so I... I listen to him. Munger: We never had an argument. We just... We just kinda roll with it easily. Suppose Warren doesn't wanna do something that I would've done, and suppose that happens four times over 40 years or something. What the hell difference does it make to me? ???? Net, the record is working out is fine. Both of us know that we've done better by having ethics. Warren's not interested in making money by cheating people. Loomis: Warren's opinions of Wall Street investment bankers would not endear him to their mothers. He feels that they're, for the most part, not out for their clients. They're out for their own business interests. Warren: In the late 1960s, there were just a flood of accounting shenanigans and mergers built upon false accounting and misleading people. It was a time when a lot of charlatans were prevailing in Wall Street and were being applauded by Wall Street. I understood what the game was about, but I didn't want to play in it, so I closed down the partnership at the end of 1969, and I took on the title of Chairman for Berkshire Hathaway. ???? Munger: Well, I think the modern Berkshire is pretty much all a reflection of Warren. ???? I have constructed a business that fits me. It's kind of crazy to spend your life painting if you're painting a subject you don't want to look at. I've gotten to paint my own painting in business on an unlimited canvas in a way. It's a different sort of place. I work with a great group of people that make my life very easy and that take good care of me. Come. Okay. We have 25 people in the office, and if you go back, it's the exact same 25, the exact same ones. We don't have any committees at Berkshire. We don't have a public relations department. We don't have investor relations. We don't have a general council. We don't have a human relations department. We just don't go for anything that people do just as a matter of form. It's exactly the life I like, and it's not work to me. It's just a form of play, basically. Oh, I... I like things quiet. I shut the door, actually, at the office, 'cause I don't want to hear anybody talking outside. Woman on TV: Broad distinctions between his views and the belt-tightening proposals. Warren: And I still probably spend five or six hours a day reading. Woman on TV: ...look at what's trending today. Our quick round-up... Howard: Well, what's amazing is the stuff he remembers. It's like a little computer, you know? I keep thinking the hard drive will run out of space, but it doesn't. Melinda Gates: He's one of the smartest people we know. So I was at a couple of the family dinners at the Gates house where Mary, Bill's mom, was trying to convince him to come out to the family place at Hood Canal to meet Warren Buffett, and he was resisting because he was really busy with Microsoft. And finally he said, "Mom, okay, I'll come for lunch." ???? Bill Gates: So the two of us flew out there somewhat reluctantly, 'cause you know, buying and selling stocks... which is how I thought of Warren... wasn't of particular interest to me and didn't seem like value added. It turned out that was completely wrong. We knew that day that we'd be very close friends. In fact, we just couldn't get enough of each other. ???? Warren: Shortly after I met Bill Gates, Bill's dad asked each of us to write down on a piece of paper one word that would best describe what had helped us the most. Bill and I, without any collaboration at all, each wrote the word "focus." ???? Well, focus has always been a strong part of my personality. If I get interested in something, I get really interested. If I get interested in a new subject, I want to read about it, I want to talk about it, and I want to meet people that are involved in it. Bill: We both love to work hard. You know, neither of us like frivolous things. You know he doesn't know much about cooking, or art, or... a huge range of things. I can't tell you the color of the walls in my bedroom or my living room. We're on a satellite phone. I don't have a mind that relates to the physical universe well. Man: Warren checking the DOW. But the business universe I... I think I understand reasonably well. Warren's ability to size up people and businesses, it's a pretty magical thing. He is the best at that, anybody we know. We... we should all try to be 20% as... as good at that. Warren: I like to sit and think, and I spend a lot of time doing that. And sometimes it's pretty unproductive but... but I find it enjoyable to think about... particularly about... about business or investment problems. They're easy. It's the human problems that are the tough ones. Sometimes there aren't any good answers with human problems. There's... there's almost always a good answer with money. ???? Susie: He was sort of a genius. I think sometimes geniuses are, by default, lonely and isolated. He was not really well adjusted. He was just this funny... I mean, humorous guy who maybe had a moat around him, because he was afraid and he didn't know anyone that he wanted to let in. And to this day, I mean, I don't know... Well, nobody knows him like I do, and probably any wife would say that, but... ???? Howard: He's a loner in a sense. And it's difficult to connect on an emotional level, because I think that that's not his basic mode of operation. He was there... physically, but he was upstairs reading all the time. I always told my mother we have to talk in sound bytes. I learned that early on, that if you start going into some long thing, unless you've explained to him ahead of time that it's going to be a long thing and you need him to hang in there, you lose him. You lose him to whatever giant thought he has in his head at the time that he was probably thinking about before you came in and really wants to get back to. ???? Peter: He's not like the rest of us. I don't think my dad ever took anybody for granted, but you are a little bit blind, I think, sometimes to what other people might be doing behind the scenes, and my dad's gotten a little bit of a pass. ???? Susie: Warren can't find the light switch, and it's probably my fault. One time, years ago when the kids were little, I was feeling really sick. I had the flu, so I lay down on the bed, and I said to Warren, "Will you get me a pan? Or something from the kitchen. I may not get to the bathroom. I feel so sick." He said, "Okay." So he trottles down to the kitchen, and I hear this bang, bip, boom, bang! And he comes up, and he brings me a colander. I looked at it, and I said, "Look, honey, this has holes in it." "Oh, oh, okay." So he ran down, all this banging and everything. And he comes up and he puts the colander on a cookie sheet. Physical proximity to Warren doesn't always mean that he's there with you. ???? He's so cerebral, you see? That's why I learned to have my own life. We were two parallel lines and... but very connected when he was open to connecting. Susie Jr.: I did make a joke at one point. I said, you know, we could make a tape of Mom yelling, "Bye, Warren, I'll be back later!" And then have the door slam, and he would just think she was here. I don't think he knew what she was doing most of the time. ???? Once Howie and I were both gone, as we've gotten older, she started to see the writing on the wall here and just started trying to figure out how she could at least have some more, as she called it, a room of her own. ???? Warren: The worst mistakes involve not understanding other people as well as you might. Well, she left Omaha in 1977, and there really isn't much to say about that. It was devastating for him, and I came home, because I-I... I can't say I was mad at her exactly, but I kept thinking, "How can you leave him? He's so... he can't function by himself." So my mother... she'd asked a bunch of her friends to sort of look in on him, and Astrid was one of them. Susie: So I called Astrid. I said, "Astrid, "will you take Warren... make him some soup? "Go over there and look after him, because he's not gonna make it." And it took him a while to figure it out, but he figured it out. I said, "I'm not leaving you, because I'll be wherever you want me when you want me." Howard: My mom moved to San Francisco, and I think one of the reasons it was important for her to leave Omaha was because she just felt like she was kinda trapped in this environment, that everybody knew who she was, that she couldn't have her own identity. Peter: He knew that there was something she needed to do and that she really recognized that the money gave us all and her a choice in a lot of ways that a lot of people didn't have. Munger: There was a time Warren was getting criticized. Here was this very, very rich man who was getting richer every year, and really wasn't giving a lot of money away, and there was terrific criticism by some people, which Warren never said anything about. Warren: The biggest thing in making money is time. You don't have to be particularly smart, you just have to be patient. Susie didn't want to wait as much as I did, but she never quite appreciated compounding like I did. Susie: That is a disagreement we have. I run a foundation now. I think we should be giving more money away, but I understand why we don't... because it's... business. To me the crux of it is, that it wasn't the money itself. You can see that in the way he lives. I mean, he doesn't buy huge paintings or build big houses or anything like that. It's all mental with him, and the money is his scorecard. ???? And he used to say to me, "Everybody can read what I read. It's a level playing field." And he loves that, because he's competitive. And he's sitting there all by himself in his office, reading these things that everybody else can read, but he loves the idea that he's gonna win. Ha! Munger: I'll tell you how you do it. Have you ever seen a juggler juggle 25 milk bottles? How did he ever get to do that? The answer is he started with one bottle, then two, then three and just kept doing it, and pretty soon he was at 25, and that's the way we did it. So, basically, we started out with cash and ended up buying a bunch of businesses, including insurance companies. Loomis: Insurance is, in itself, a profitable business, but it has the additional advantage of creating something that's called "float." Float is the money that hangs around Berkshire while a claim is waiting to be paid. And Warren turned out to have a extraordinary ability to use the money thrown off by the float to buy companies that fed the growth of Berkshire. Man: In 1983, Mrs. B cashed in on her business by selling control for $55 million to a company owned by investor Warren Buffett. ???? Loomis: Warren was quite an expert about newspapers. He got interested in the "Post," because he recognized it as a greatly undervalued company. Kay Graham: He had to write me a letter. "Dear Ms. Graham, I've just bought 5% of your company, "and I mean you no harm, "and I think it's a great company. "I know it's Graham owned and Graham run, and that's fine with me." And I thought, "Whoa, this guy's really terrific." He used to come to board meetings with about 20 annual reports and he would take me through these annual reports. It was like going to business school with Warren Buffett. Kay Graham did introduce Warren to the world of Washington, entirely different group than he had ever dealt with before. Peter: It was clear that working with Kay gave him a different kind of confidence, and he was the star. Woman: Everyone wants to hear what Warren Buffett has to say. Man: The Oracle of Omaha building his image and having some fun. ???? Man 2: Berkshire shares have increased more than 2,000% in value. Man 3: One of the largest market capitalizations in the world, and it could grow a lot larger since Warren Buffett shows no sign of slowing down. Woman 2: So how did he do it? By investing in what he knows and understands... good old-fashioned American brands like Coca-Cola, Fruit of the Loom, and Dairy Queen. What inspired you? This inspired me! Buy what you like, is that what it is? Yeah absolutely. ???? Today, the Coca-Cola Company will sell almost two billion eight-ounce servings of one form or another of Coca Cola products. Now if you get an extra penny a day, a penny a serving, that's $20 million a day, that's $7.3 billion a year from one penny more. When you own Coca Cola, you own a little piece of the minds of billions and billions of people. That is really good. ???? Man: Who's got the most $100 bills these days? Well, his name is Warren Buffett in this country, and he has just displaced his friend Bill Gates as the richest businessman in the world. And the purpose of Wednesday's meeting was to discuss Buffett's company, Berkshire Hathaway's plan to purchase railroad giant Burlington Northern, valued at $26 billion. This would be Buffett's largest acquisition ever. Munger: He's created Berkshire from virtually nothing into hundreds of billions of dollars of market cap. Nobody else has a record like that. Gottesman: He wanted to have an outstanding reputation that he'd never really upset the apple cart when he bought a business, that he kept the management in place. He was establishing a reputation that paid off later in life. It's been building and building ever since I've known him. Warren: It takes 20 years to build a reputation, then it takes five minutes to lose it. ???? Loomis: When Warren made his investment in Salomon, I was one of the people, along with many, many others, who were quite amazed, because he had taken a very critical tone in talking about investment bankers and about their greed. And here he was investing in one, Salomon Brothers, that was known to be a member of the club. Gottesman: Warren and Charlie were on the board, and Charlie couldn't stand what was going on there and didn't like the culture at all. And shortly after they got involved, the thing exploded. Warren: In 1991 on a terrible day in August, I got a call, and the two top officers of Salomon were on the other end, and they said that... that... "We have problem." Announcer: This is "NBC Nightly News." Good evening. It is the kind of scandal that rocks Wall Street and raises questions, questions about the integrity of our financial institutions. Man: The giant securities firm of Salomon Brothers under investigation for improper trading of treasury bonds. Man 2: Salomon admitted it exceeded the limit of trading in government bonds, once by buying bonds in the name of a customer who didn't even know about the deal. Salomon Brothers is under investigation by the Treasury Department, the Federal Reserve, the SEC, and the Justice Department. But more important than the fate of the firm itself is the impact their actions could have on the public trust and on the credibility of the American market worldwide. ???? Warren: The company owed $150 billion. It owed more money than any other private company in the United States at the time. And that night I met with the man that ran the Federal Reserve of New York, who was the sheriff in effect, and I said, you know, "I've never really owed very much money before." I said, "I've got a little mortgage on a house, but 150 billion is a little staggering." And I was hoping he would say, "Well, don't worry, Warren. We'll give you a few weeks to breathe." And he... he said to me, "Prepare for any eventuality." ???? Woman: Earlier today, the US Treasury Department announced it had suspended Salomon Brothers from participating in the auction of new issues. Man: It was one more jolt for a scandal-scarred Wall Street. Loomis: The Fed was in effect saying, "You're an evil force, and we don't want you trading our bonds." It was a huge turning point for Warren. And he believed that, at that particular point, his reputation was on the line. Gottesman: Warren had 24 hours to make up his mind as to whether he was going to go forward or just bow out. And I think at that point, Salomon Brothers could have gone into bankruptcy. And Warren stepped up and took responsibility. Okay. I'm Warren Buffett. I was... elected... Interim Chairman of Salomon, Inc. a few hours ago at a board of directors meeting. Man: Why was it necessary for you to step in and what is your mandate of leadership? I think that it was necessary to step in because I would do whatever was needed, dig out any bit of information about what's happened in the past, and I would do everything I could to make sure that things exactly right in the future. Man 2: Mr. Buffett, are you satisfied that... I had to convince the Treasury that what was done in the past was awful and stupid, and they had every right to be furious at us, but this firm employed 8,000 people, and it was going to go out of business unless they let us continue, basically. ???? Warren believed that there was a too-big-to-fail scenario. The term was not used then, but he believed that Salomon was too big to fail. And if Salomon went down, it would take other important parts of Wall Street with it. ???? Warren: We had this death knell from the Treasury, so I called the Treasury. Nick Brady was the Secretary. I'm pleading for my life. And I'm sure my voice was cracking and everything else, and I said, "Nick, this is the most important day of my life." And I really did feel that it was going to be a colossal disaster. He wasn't sure I was right at all... in fact, he probably thought I was wrong... but he knew that I felt what I was saying. So, the Treasury modified its order, and in effect, of course, it was quite an endorsement. It was huge. ???? Munger: It saved Salomon. Nick Brady went with Warren, because he trusted him. It shows how having a good reputation is really helpful in life. Warren: I thank you for the opportunity to appear before this subcommittee. I would like to start by apologizing for the acts that have brought us here. A nation has a right to expect its rules and laws to be obeyed, but I also have asked every Salomon employee to be his or her own compliance officer. After they first obey all rules, I then want employees to ask themselves whether they are willing to have any contemplated act appear the next day on the front page of their local paper to be read by their spouses, children, and friends. If they follow this test, they need not fear my other message to them: Lose money for the firm, and I will be understanding. Lose a shred of reputation for the firm, and I will be ruthless. I welcome your questions. Warren: It's been 50 years since I formally took control of Berkshire Hathaway, and, step by step, we've created something that is kind of what I dreamt we might create over time, but it took a lot of time to do it. Never seemed like we were making that much progress on any one day, but compound interest works. Woman: When you think back 50 years ago when you founded this company, did you ever imagine it would be the fifth-largest company in the world? No, I... I didn't, but if I was thinking about it, I wouldn't have thought in terms of being the fifth, or the fourth, or the third. You would've wanted number one. Oh! I mean, if you're gonna dream, you might as well dream. ...two, three. Bill Gates wins. Bill Gates wins. Warren: Well, a Berkshire Hathaway shareholders meeting is partly a fun festival. It's sort of a Mardi Gras for people to come every year. It's a chance for us to have a lot of fun and meet the people that have entrusted us with their money. Munger: Well, we used to have just 30 people in a cafeteria, and now we have this huge public spectacle. Munger: Celebration is part of making a group of people work well together. It's a celebration. Warren: ??We are glad ?? ??You're here at our meeting ?? ??Be sure to check out our wares ?? ??We'll sell you See's Candy and Dilly Bars ?? ??And insurance for all of your cars ?? ??For its buy, buy, buy all you see ?? ??At the Berkshire show! ?? ???? Man: All right! Woo! He truly loves to do what he does. Love you, Warren! Aw, yeah. Loomis: I think investors who own Berkshire Hathaway, they see themselves as a part of a community. Woman: One, two, three. There are more long-term holders of Berkshire than any company. People consider it a religion. Man: Okay, right here. Warren: They don't buy it with the idea they're gonna sell it next week. I think most of them buying it with the intent of holding it for their lifetime, just like they'd buy a farm or buy an apartment house. At Berkshire, everybody gets the same information from the comprehensive annual report. We don't meet with the analysts. I'm not interested in what an analyst thinks about Berkshire. I'm interested in what the owners of Berkshire think about Berkshire. Munger: He came out of a private partnership where people he knew were trusting him. And he had his relatives in the partnership, and they were not rich. And as it got bigger, he started treating everybody else the way he treated his relatives. Warren: In terms of our feeling toward the people who are shareholders, we regard them as our partners. They're not some faceless group of people. And that's why at the annual meeting, I love seeing 40,000 of them. It gives real meaning to what we're doing every day. Let's try. ??If you know... ?? Men: ??Susie like I know Susie ?? ??Oh, oh, oh, what a gal ?? We just have a lot of love and respect for each other. And that's never changed. ??Oh, oh... ??Susie: I don't go to most things in Omaha, because I think Astrid lives there with him, and that's for her to do. And then we do all kinds of things. Susie Jr. : Strange as it may seem to people, I always think, you know, "Who cares? "If it's working between the people who are directly involved, who cares what anyone thinks?" And my mother and Astrid were very close, you know. They really, really loved each other, and I think that my mother was glad that she was there, 'cause she... she loved my dad. She wanted him taken care of and happy, and there's no one better than Astrid. She's just... she loves my dad. She wouldn't care if he had one cent. All: ??..back where you belong ?? Well, Astrid has lived with me for a long time. She's done wonders for me. It worked well, but I don't think it'll work for lots of other people necessarily. Susie and I loved each other, we admired each other, and we were totally in sync with what the other was doing, but we were two different individuals. ???? Susie: The first time Warren came out to San Francisco... we took a walk, and he looked around, and he doesn't... he's not very visual. He was looking around, and he said, "This really is... this is your city." I am so drawn to color, light, form, and nature, that he thought it was a good place for me. Warren: Over the years I've developed a better understanding of human nature. I can learn a lot about investments out of a book, but I don't think you can learn as much about human beings. You really need some experiences, and I'm wiser in that respect than I was 40 or 50 years ago, even though I can't rattle off numbers the same way I used to be able to. ???? Well, I think that what we do reflects who we are, and that's true for everybody in this room. And if you do the work I do, you meet the best human beings in the world. People who have made a choice not to make money, but to serve other human beings. I think it's the best kind of life anyone could have. I was with her in Arizona at this "Fortune" Most Powerful Women's Conference, and she told me she had a biopsy the day before, and I didn't really think much of it. ???? Then we got home, and the biopsy results were not good. It was stage four oral cancer. Howard: I was on my way to a board meeting in India, and I remember saying to her, "I'll see you when I get back." And she rarely cried, and she just started crying and said, "No, you need to stay here, and you need to come out for the operation." Susie Jr.: So we were all there, and the day she was going into the surgery, that morning, my dad... It's funny, he... there's some of it he just can't... you know, he just can't... the thought of something happening to her was just, for him... you know, was just the worst thing that could happen. ???? Peter: She knew it was going to be really difficult. She knew the recovery was going to be brutal, so I think that she had that surgery for others. It was... quite a big surgery. She couldn't talk, she couldn't swallow, she couldn't eat. But she came out, and I really was with her for the next four months or so. And my dad came out every weekend. ???? And in a few months she was doing better. She and my dad had gone to Cody, Wyoming, which they did every year with a bunch of friends. And my dad called. This was, I don't know, 8:00 at night or something, and he said, "Something happened to Mom. I'm in an ambulance. You need to come." Howard: I actually thought something had happened to my dad. I don't know why I thought that, but I... I guess I thought my mom had had this recovery, it was successful, and why would anything happen to her? ???? It was horrible. And a total shock. You know, she'd been fine. She'd been fine. They went off to Cody, she was fine, and they were having dinner, and you know, she didn't feel well after dinner, and... she had the stroke. We went into the hospital room, and my dad was sitting there. He'd been sitting there all night, holding her hand. I was so proud of him, because when it came down to it, he knew what he was supposed to do, and he did it, which was nothing. ???? So my dad went to sleep, and I sat with her. And I just kept putting my hand on her heart to see if she was breathing, and... At one point, you know, I didn't feel anything, so I went out, I got the nurse, and I said, "Can you come in here?" And she said, "No, she's gone." So, I have to say one of the worst moments of my life was waking my dad up to tell him that. ???? Warren: It's a very strange thing, love. You can't get rid of it. If you try to give it out, you get more back. If you try to hang onto it, you lose it. Susie... really put me together. She believed in me. She-she-she... she put me together. And I would not only have turned out to be the person I turned out to be, but I would not have... I actually wouldn't have been as successful in business without that, and... she made me more of a whole person. ???? Peter: He went dark, essentially, quiet and inward for a certain amount of time. ???? You know, my dad is a solitary guy, and he had lived, essentially, a solitary life in a lot of ways. I think it came down to him figuring out how he was gonna get through this tunnel and get out the other side. In my head at the time, I thought, "God, I don't know if he'll ever get out of bed." But he did. Welcome. I'm Patty Stonesifer, the CEO of the Bill and Melinda Gates Foundation. And we appreciate you coming today, especially since I sent a very vague and very late notice to ask you to come to a conversation with Bill and Melinda on the future on philanthropy. So, lets get on with it. I have the pleasure of introducing a good man whose great decision is going to change the world, Warren Buffett. ???? Man: A remarkable decision tonight from one of the richest men in the world. Mega-billionaire Warren Buffett says he is giving away most of his fortune away to charity. Woman: Buffett has pledged to give away the bulk of his fortune to the Bill and Melinda Gates Foundation and giving more than 15% of his money to foundations started by his three children and his late wife, Susan. Man 2: One global health activist called what Buffett did today one of the most remarkably selfless acts that history will ever record. That's a better hand than I get at a Berkshire Hathaway meeting. I'd like to thank you for coming. It... it's a great day for me. It's a great day for my family. My wife Susie and I had planned that whatever I made would go back to society, and, originally, I thought she would outlive me and that she'd make a big decision on it. But since her death, I had to rethink the best way to get the money into society and have it used in the most effective way, and I had a solution staring me in the face. It was completely out of the blue. I mean amazing. The largest single gift ever given was what he gave away that day. I'd like to ask the people representing those... various foundations to come out. The first three letters are easy to sign, I just sign "Dad." ???? Howard: When he wrote the letter to us, he put something in that letter that was incredibly important to me, which was exactly how our foundation behaves, which is, if you're gonna try to bat a thousand, you won't do very many things that are important. But if you're willing to basically strike out a few times, you can really change something big. I.C.C.N.! Warren: Well, I feel terrific about the fact that my three children each run a separate foundation that combines their special interests, whether it's early education or whether it's farming in areas where people's techniques for using small plots of land could use a lot of improvement. All kinds of ways... vaccines, you name it. Man: More powerful than Buffett's gift is the message he's sending to other wealthy Americans, that those who have the least in this world should benefit from those who have the most. Warren: In my entire lifetime, everything that I've spent will be quite a bit less than one percent of everything I've made. The other 99% plus will go to others, because it has no utility to me. ???? So, it's silly for me to not transfer that utility to people who can use it. It's doing me no good. Susie Jr.: I am so proud of what we do. I almost cry at every board meeting, because I just think she would be so proud. And that is my biggest job, in my opinion, is to make sure that every penny gets spent the way she would want it spent. Susie: Whoever you are in this life, you don't want to think you wasted a lot of your energy, love, and time on something useless. ???? I always thought I'd marry a minister, a doctor, or somebody out doing some valuable service to human beings. And the fact that I married somebody who makes just piles of money is really the antithesis of what I ever thought, but I know what he is, and... he is... There's no finer human being than who he is. ???? Warren: The truth is that I'm here in my position as a matter of luck. Hey! How are you doing, Grandpa? Hey, Grandpa! Okay. Warren: When I was born in 1930, the odds were probably 40:1 against me being born in the United States. I did win the ovarian lottery on that first day, and on top of that, I was male. Put that down as another 50/50 shot and now the odds are 80:1 against being born a male in the United States, and it was enormously important in my whole life. To think that that makes me superior to anyone else as a human being is just... I can't follow that line of reasoning. Perfect! Okay, good luck. I think I was lucky to have been standing alongside Warren Buffett while he was becoming Warren Buffett. He has developed over the years. He's broadened. His values extend through all of his life. He wants to lead a life that he and his father, if his father was still living, would say was a good one. ???? I think he's going to end up in the history books a hundred years from now. I'm not sure what role he's going to be assigned. Will he be famous for what he did as an investor or as a philanthropist? But Warren said that his ambition in life is to be a teacher. Warren: The world is a great movie to watch, but you don't want to sleepwalk through life. The important thing to do is to look for the job you would take if you didn't need a job and life is wonderful then. I mean, you'll jump out of bed in the morning because you're really looking forward to the day. I have... for over 60 years, I've been able to tap dance to work just 'cause I'm doing what I love doing and... and I just feel very, very lucky. Okay, class dismissed. ???? Night. Kunhardt: Do you fear death? Warren: No, I don't. I've had a terrific life. I feel... you know, it's gonna happen, and I have no idea what happens after it. I'm an agnostic, so I... you know, it may be terribly interesting. It may not be interesting at all. We'll find out. But physically, I'm pretty well depreciated. I'm getting down to salvage value. But it really doesn't make any difference at all. It doesn't interfere with my work. It doesn't interfere with my happiness. It doesn't interfere with my thinking. ???? I don't feel any diminution in my enjoyment of life or enthusiasm for life at all. In fact, in a sense, the game that I'm in gets more interesting all the time. It's a competitive game. It's a big game, and I enjoyed the game a lot. ???? Warren: ??Somewhere over the rainbow ?? ??Way up high ?? ??There's a land that I heard of ?? ??Once in a lullaby ?? ??Somewhere over the rainbow ?? ??Skies are blue ?? ??And the dreams ?? ??That you dare to dream ?? ??Really do come true ?? ??One day I'll wish upon a star ?? ??And wake up where the clouds ?? ??Are far behind me ?? ??Where troubles melt ?? ??Like lemon drops ?? ??Oh, way above ?? ??The chimney tops ?? ??That's where ?? ??You'll find me ?? ??Somewhere over the rainbow ?? ??Blue birds fly ?? ??Birds fly over the rainbow ?? ??Why then, oh, why can't I? ?? ??Somewhere over the rainbow ?? ??Blue birds fly ?? ??Birds fly over the rainbow ?? ??Why then, oh, why can't I? ?? ??If happy little bluebirds fly beyond the rainbow ?? ??Why, oh, why ?? ??Can't I? ?? Good night, Susan.