CAROL LOOMIS: “This might imply that you expect the index fund to outperform Berkshire in the future when the company is run by a new CEO and chairman. Please clarify.”

WARREN BUFFETT: Yeah, I’ll be glad to clarify. That letter didn’t come from Vanguard, by any chance, did — (Laughter) When I die, incidentally, then all the Berkshire shares I have at that point will go to five different foundations. Every single share. I mean, there are no shares that have not been designated, mentally, to charity. A good many of them have been designated specifically to — in numbers and all that. But — and they will be distributed over the ten years after my estate is closed. So figure over 12 years. And I tell my — I tell the trustees that will be holding these shares, you know, “Don’t sell any Berkshire shares until they have to be sold.” So my views, on Berkshire at least through 12 years after my death are as bullish as anybody could possibly come up with. And incidentally, without those kind of instructions, anybody would say, “You know, you’re crazy to keep many, many billions of dollars all in one stock.” I can’t think of anything better to do it over those 12 years.

In terms of my wife’s situation, you know, that is not a question of maximizing capital. It’s just a question of total, 100 percent peace of mind on something that cannot get a bad result. And, like I said, there’s way more money for her than she’ll ever use. As a matter of fact, those of you who know her, you know, may feel that I’ve added about three zeros too many. But it is not designed for her to get even larger amounts of capital. And there’ll be capital, loads of capital left over on that part of it. On the part that I care about maximizing, I have instructed the three trustees to not sell a single share until it has to be sold. So, that’s good for 12 years after I die, as to my best advice as to what I want them to hold. Charlie?

CHARLIE MUNGER: Well, Warren is a little peculiar in the way he distributes money in the family. And I think he’s entitled to do what he damn pleases. (Applause) Speaking —

WARREN BUFFETT: Do I — do I hear my — children applauding? Do I hear my children applauding? (Laughs)

CHARLIE MUNGER: And I’ve never had this feeling I had to starve the family down to a few trifles. And Warren really — and Susie, when she was alive, was the same way. He really is a meritocrat. He’s really quite extreme in wanting to let most of his money go back to the civilization in which it was earned. I like being associated with it. (Applause)

17. BNSF service problems are hurting earnings

WARREN BUFFETT: Jonathan?

JONATHAN BRANDT: The BNSF has done very well since Berkshire acquired it in 2010. But its western competition of Union Pacific has actually grown its earnings more. And at the moment, the UP seems to be operating more smoothly for its customers. Could you shed some light on the service challenges Burlington has experienced recently and perhaps discuss any differences between the two railroads in end markets, geography, and strategy that may have led to the divergent result? Would it be fair to say that, in trying to aggressively sign up new business volume last year, that the railroad did not allow for a sufficient margin of safety in terms of what its capacity could handle, should there be a harsher than normal winter or other adverse circumstances?

WARREN BUFFETT: Yeah. It — we’ve handled more volume, actually, than in the past. I mean, in 2006, we had a peak of 219,000 carloads. That was in the late fall. But no question that we’ve had a lot of service problems, particularly on our northern route. We have been spending more money than Union Pacific, and they spend a lot, in terms of attempting to anticipate the kind of problems that can occur when you get a big increase in volume, on that one route particularly, from the boom in the — particularly the Bakken shale oil. We’ve got a lot of unit trains that are running over those lines that weren’t running five years ago. I think I’ve got Matt Rose here — right — I think somewhere in the front. And he might address some of the problems of cold weather. I mean, want to get — there were a lot of days where it was 15 below or worse. And in terms of sending people out to work on problems, under those circumstances, it can be really — it can be life threatening. But Matt, do you have — oh, there he is. OK.

Could you shine a light down on him, please, too? So he’s right here in the front. In the front.

MATT ROSE: Warren. So last year, the industry grew at about 820,000 units. BNSF handled 53 percent of all those units. And it’s not what we wanted to take or what we didn’t want to take. Quite frankly, it’s the geographic nature of our franchise. And the oil came a lot faster than we were expecting and we’ve been spending money at a rapid clip to try and build into it. The second issue was, you know, I had previously, prior to this past year, been in the CEO role for 13 years, and I have never seen a weather — a winter weather — like that. We had 83 inches of snow in Chicago. We had multiple days, over 30 days, where it didn’t get to zero in the Minnesota area. So, you know, we know this is an outdoor sport. We get it, on the weather. But quite frankly, when we get to about 0 to 10 degrees below, things just don’t work. The weather’s getting better. Last week, we handled 206,000 units. No other railroad has ever handled 205,000 units. So the railroad’s coming back.

And we’re making the significant investments to be able to handle all the business that’s out there.

WARREN BUFFETT: Thanks, Matt. (Applause) We will spend $5 billion on the railroad this year. No railroad’s ever spent that kind of money, or even very close to it. But I got a call — or I got a letter — from a fellow in North Dakota. And they were having a problem getting fertilizer. And I called and talked to him. And they sent it down to Matt. But we’ve now put on — I think we’re going to have 52 unit trains of fertilizer. And they will get there in time for the planting. And that’s important. I mean, we take it seriously. But cold in winter or floods in the summer, I mean, we’re now really functioning a lot better and our earnings will be, in my view, are very likely to be a lot better. But the thing that could disrupt that is, if for some reason, you had incredible floods. You’re dealing with 22,000 miles of track.

And if you get weak links, one of which, always, for all four big railroads, is Chicago, because that’s where things get interchanged and that’s where a lot of bottlenecks have been this year, and that’s where weather was tough as well. But you’re right, Jon, in the comparative financials in recent months. And believe me, Matt’s paying a lot of attention to them and Carl’s paying a lot of attention to them, and I even pay a little attention to them. So I have a feeling that they will be getting better over the remainder of the year.

18. Generating electricity with natural gas

WARREN BUFFETT: OK, station 4.

AUDIENCE MEMBER: Rosal Kerkhove (PH). I’m from Omaha, Nebraska. My question relates to our company’s use of natural gas to generate electricity. This past winter, natural gas in storage has declined substantially. In the future, how do our companies assure that they have an adequate supply of natural gas to generate electricity? And if the price of natural gas increases in multiples, how do our companies assure that they can sell the electricity at a satisfactory return on investment? Thank you.

WARREN BUFFETT: Yeah. We have — I’m going to ask Greg Abel to be more specific on this. But we are the largest alternative generator of — using alternative sources — I think, in the country. And I think by the end of 2015, we will be capable of producing 40 percent of our needs in Iowa through wind, which will be unlike any other company you can find in the country. (Applause) But I think I’ll have Greg answer the specifics of any natural gas-dependent generating units we have. I’m not worried about that thing, but I — about what you raised —but Greg would know a lot more about the mix on natural gas and the opportunity to shift to coal. And exactly the profile of the generating capacity. Greg? Now, let’s get a light down on him, if you can. He —

GREG ABEL: I think it’s — okay, there it is.

WARREN BUFFETT: Yeah, there we go —

GREG ABEL: Yup. Sorry. So like Matt touched on, obviously, we had a very cold winter in the Midwest. So our systems, for the first time, were challenged in a significant way. But very proud of how the resources were managed. So if you look at the question around natural gas, and specifically the gas availability, there was substantial gas available to be utilized both to heat homes and produce the energy, because ultimately, we’re worried about both, the — keeping the furnaces on and, equally, keeping the lights on. So when you looked at the balance of supply, there was gas there. But clearly, we have to continue to look at the unique situation as we continue to move towards using more gas in the United States. Warren touched on an important point. This past year, as he highlighted — he highlighted 2015 — but if you look at just what we produced on the renewable side in Iowa, that was 39 percent renewable, i.e. wind. And that’ll only get larger. So as we continue to manage these multiple resources, there’s clearly a way to meet the needs of our customers. And we’re meeting it in an extremely cost-effective fashion.

I’d also highlight that when you think through the cost recovery side of it, we’ve got very unique mechanisms within our utilities. When the underlying cost of gas goes up, where we have to purchase more than we had anticipated, we’ve got clear pass-throughs back to our customers. And we’ve negotiated those across each of our states. So we’re well positioned to service our customers long term, and equally protect the fundamental financials of the underlying businesses.

WARREN BUFFETT: The —

GREG ABEL: Thank you.

WARREN BUFFETT: The company that Greg runs has many subsidiaries. And our gas pipeline subsidiaries move about 8 percent of the gas in the United States. And I think you said you were from Omaha. And the gas that comes into this area comes through a pipeline that we own. And we just renamed the company to Berkshire Hathaway Energy, from MidAmerican Energy. We changed it to Berkshire Hathaway Energy. But, it’s a point of some pride to us that that company, Northern Natural Gas, which originally came from Omaha, when we bought that from Enron a decade or so ago — actually, Dynegy had it in between — but its origin then was Enron. You know, they’d skimped on maintenance, done all kinds of things. And it was ranked number 42 out of the 42 ranked pipelines in the United States at that time. And last year it was ranked number one. So it went from last to first under Greg’s management. And I tip my hat to him. (Applause) And number two was our other pipeline — current pipeline. So we’re running one, two at the moment.

19. Two heads running Berkshire are better than one

WARREN BUFFETT: Becky?

BECKY QUICK: This question comes from Fred Ireman (PH) in Richmond, Virginia, and it’s addressed to you, Warren. He says that, “During the past several years, much has been written and many have speculated about your successor. I shall not even go down that path, as it would cause you to repeat yourself. “However, has there been any discussion at your board meetings about a replacement for your partner, longtime friend, and co-chairman, Charlie Munger? “Has it been determined Berkshire will continue to be led by a similar dynamic duo? Two magnificent investor minds, each providing a unique point of view, have been a major reason the business has performed magnificently over the decades and has delighted the shareholders.”

WARREN BUFFETT: Well, Charlie is my — he’s my canary in the coal mine. (Laughter) Charlie turned 90. And I find it very encouraging how well he’s handling middle age. (Laughter) So I hope to be able to do the same thing myself. No — you raised a point, which is — I hadn’t thought about, but I’m a little sensitive now that you raised it. They always talk about replacing me, but they never talking about replacing Charlie. I do think — I think it’s very likely, incidentally, that whoever replaces me as CEO probably has, over the years certainly, developed — they’ll never be able to develop another Charlie — but they’ll develop somebody that they work with very closely. It’s a great way to operate. Berkshire is better off because the two of us have worked together than if either one of us had been working individually, there’s no question about that.

(Applause) And —but I do think, you know, we saw it with Roberto Goizueta and Don Keough at Coke, we saw it with Tom Murphy and Dan Burke at Cap Cities. I mean, these were magnificent companies. And I think that in both cases that I just named, I think that they accomplished far more because they had two incredible people running them who admired and worked well with the other. And they were complimentary, in terms of the talents they brought. In many ways, it’s a great way to operate. You can’t will it to somebody. But I would be very surprised if, a few years after my successor takes over, or maybe sooner, that there isn’t some relationship, a partnership, that enhances the CEO’s not only — not only achievements — but the fun they have. And — but so far, nobody’s brought up, in the meeting, any successor to Charlie. And frankly, I have a lot of trouble thinking of anybody that could be a successor to Charlie. (Laughs) Charlie, you want to comment? I’ve got to give you a chance. (Laughter)

CHARLIE MUNGER: I don’t think the world has much to worry about. Most 90-year-old men are gone soon enough. (Laughter)

WARREN BUFFETT: Well, the canary has spoken. OK. (Laughter)

20. Subsidiary shuffles aren’t related to Berkshire succession plans

WARREN BUFFETT: Jay?

JAY GELB: I have a question on succession planning, as well. Matt Rose recently shifted his role from CEO of the Burlington Northern unit, to executive chairman of Burlington. Does this change affect who will be the next CEO of Berkshire? And what is the succession plan for Ajit Jain at Berkshire’s reinsurance unit?

WARREN BUFFETT: The only succession for Ajit would be reincarnation. (Laughter) We will not get another Ajit. But fortunately, we won’t have to for a very, very long time. The situation with Matt, which was at Matt’s suggestion, was designed to fit specifically the succession situation at BNSF and the wishes of certain people. It doesn’t have any implications for Berkshire. I have letters from every one of our managers telling me what I should — I keep — these are private, I don’t share these with the board, even — telling me what I should do if something happens to them tonight. So I have their ideas. In some cases, they talk about more than one person. In some cases, they tell me the strengths and weaknesses of the people. But the — I would not try to make any judgments about the succession plans at the parent company from what is done in terms of succession planning at any of the subsidiaries. Charlie?

CHARLIE MUNGER: Well, I always say, I’m not the least bit worried about it. If I — I wish my main problem in life was the fear about succession problems at Berkshire. I think we’re in very good shape.

21. “Great” question, but no answer

WARREN BUFFETT: OK. Station 5.

AUDIENCE MEMBER: I am Bill Melby from Northfield, Minnesota. At the 2009 annual meeting, Mr. Buffett, you said that if you were required to invest your total net worth in one company, that that company would be Wells Fargo. So in 2014, I ask the same company — or the same question. If you were required to invest your total net worth in one company, what would that be?

WARREN BUFFETT: When the question was asked in 2009, did you exclude Berkshire? Because I think I would’ve answered Berkshire. (Laughs) But I wouldn’t quarrel with Wells Fargo as a marketable security outside of Berkshire at that time. Well, I guess he’s checking his notes on — the — well —

AUDIENCE MEMBER: The question is other than Berkshire —

WARREN BUFFETT: Oh, other than Berkshire.

AUDIENCE MEMBER: —what would you invest in today?

WARREN BUFFETT: Yeah. Well, it’s a great question, but it’s not going to get an answer. (Laughter) Charlie, do you want to answer?

CHARLIE MUNGER: No, no, I think you’ve given exactly the right answer. (Laughter)

WARREN BUFFETT: Yeah. Well, I’m sorry to disappoint you, but we’ve disappointed others when they’ve asked that question.

22. Shareholders aren’t helped by rule requiring CEO pay disclosure

WARREN BUFFETT: OK, Andrew?

ANDREW ROSS SORKIN: Thank you, Warren. This question comes from Dave Hitchy (PH) from Auburn. It’s a long question. He says, “As a shareholder for about a dozen corporations in addition to Berkshire, I always see a number of proxy statements each year. In all, except Berkshire, the summary compensation table has the compensation listed for at least five or more of the highest paid executives. Berkshire lists three, Warren, Charlie and Mark. “I assume that since Berkshire is a holding company structure, that’s the way it is. I think it would be instructive to include at least two of the highest paid executives from the whollyowned subsidiaries in the summary table, Ajit, Tony, or Greg, or Matt, to give the shareholders, your partners, a sense of how Berkshire compensates its strongest and highest-paid leaders, as other companies do. “This would be particularly valuable since two-thirds of the current listees, Warren and Charlie, only receive nominal salaries of $100,000 per year, a figure that is vastly below the value they bring to the company.

“Would you, in the spirit of transparency, be willing to add at least two of the highest-paid subsidiary officers in the table in future years? And how much do you think the next CEO of Berkshire should be paid?”

WARREN BUFFETT: Well, the answer to the last is he certainly will be entitled to pay — get paid a lot. But their decision as to how much they accept is another question. But I’m going to write about that very end question next year in the annual report because it has a lot of interesting ramifications. We, obviously, are following the SEC rules, which I can’t recite, in terms of the officers required to be in the proxy statement as to their pay. But, you know, Andrew, in my sporting mood, I would say that Comcast probably has some people in the employ that make a lot more money — not at CNBC, we’re not —but — that would exceed the salaries of the people that they list in the proxy statement, as well. And there’s a real question as to whether it’s in the interests of the shareholders of the company to start listing, you know, how much the person who’s the anchor of the nightly news or whomever it might be, gets paid because it might have a very negative effect, in terms of negotiating salaries with other people within the organization.

I would say that the — I would say the shareholders of Comcast would be hurt, actually, if you published the five highest salaries paid at the subsidiaries or at Comcast itself. And certainly, if you carried it to every subsidiary there was. I mean, if you were to publish the five highest salaries at CNBC, I don’t think the salaries overall would go down the following year. So, I think that is a — I think that’s a good reason for not — for us not publishing the salaries of, you know, say, our top ten managers of the company. At Salomon — we mentioned that a little earlier — everybody — virtually everybody — was dissatisfied with what they were getting paid. And they were getting paid enormous amounts of money. But they were disappointed, not because of the absolute amount. They were disappointed because they looked at somebody else in the place and it drove them crazy. And as a matter of fact, the first big crisis we had in compensation was when the management made a — what was regarded as a secret deal, with the arb group, as I remember — whereby, John Meriwether and his crew got paid a lot of money, which I would argue they earned.

I mean, I think they deserved it. But as soon as that happened, it made compensation, which had always been a terrible problem, an even greater problem because of the jealousy that broke out among the people that weren’t in John Meriwether’s group. I think it’s been — I think it’s very seldom that publishing compensation accomplishes much for the shareholders. In fact, you can argue that much of what’s going on in corporate America — well, I would put it this way: corporate CEOs, as a group, would be being paid a lot less money if proxy statements hadn’t revealed how much other people were getting paid. It is only human to look at a whole bunch of proxy statements and say, “Well, I’m worth more than that guy,” and negotiate that way. And a comp committee is going to respond to that. So, American shareholders are paying a significant price for the fact that they get to look at that proxy statement every year and see how much those top five officers are earning. Charlie? (Scattered applause)

CHARLIE MUNGER: In the spirit of transparency, you’re asking for something that wouldn’t be good for the shareholders. And it’s not going to happen unless the SEC makes it happen. We’re way better off without adding to the culture of envy in America.

WARREN BUFFETT: Yeah, there’s no one that looks at —there’s no CEO that looks at other proxy statements and comes away thinking, “I should get paid less.” I mean, that — you know? (Laughter) We haven’t seen — have we ever seen them?

CHARLIE MUNGER: No.

WARREN BUFFETT: No.

CHARLIE MUNGER: No, I —

WARREN BUFFETT: Well, we’re not old enough.

CHARLIE MUNGER: I would say that envy is doing the country a lot of harm. And our practices are envy dampeners.

23. Why Berkshire maintains $20B cash cushion

WARREN BUFFETT: OK. Greg. (Applause)

GREGG WARREN: Thank you. As you know, Berkshire’s cash balances are an issue for some investors. Especially with excess cash being in the 25 to $30 billion range the last couple of years, and Berkshire having a more difficult time than it’s had historically reinvesting capital as quickly as it comes in. Although Berkshire did provide $3.5 billion of the $3.6 billion of cash that was used to acquire NV Energy last year, with MidAmerican funding the remainder with debt, was there something that kept Berkshire from providing all of the capital for the acquisition, perhaps via intercompany debt? And on a separate note, can you provide with us some insight into the decision to allow MidAmerican to retain all of its earnings, while Burlington Northern, which spent $3 billion on capital expenditures last year and is on pace to spend $5 billion this year, continues to pay a distribution to Berkshire, all while it takes on additional debt to help fund capital spending?

WARREN BUFFETT: Yeah. MidAmerican, now renamed Berkshire Hathaway Energy — we’ll call it BH Energy — will have multiple opportunities, I hope, and we’ve seen two of them in the last 12 months, to buy other businesses. And, as you noted, we spent a substantial amount of money on NV Energy and two days ago we agreed to buy transmission lines in Alberta. So, we will — we hope we will — and so far we’ve been able to — come up with really large businesses to buy at BH Energy. That will not — at BNSF, we will spend a lot of money to have the best railroad possible. But we’re not going to be buying other businesses. So, we distribute substantial money out of BNSF and we will continue to do so because it’ll earn substantial money. And it can easily handle the debt that it has and will incur. Whereas, at Berkshire Hathaway Energy, we have pretty much the appropriate level of debt at both the subsidiary and the parent company level. So as we buy things, we need not only the retained earnings that we have, but occasionally we need some money from the shareholders.

And there are three shareholders of BH Energy. Berkshire owns 90 percent and then Greg and Walter Scott have the balance. And so, if we make a large acquisition and we need a little more equity, we will have a pro rata subscription, which the other two shareholders are welcome to participate in. But if they don’t — if they decided not to, it wouldn’t hurt them. They’d still have an improvement in the value of their shares. So those two companies are quite different that way. I hope that more possible deals for Berkshire Hathaway Energy come along. And I think they will. So we may invest many, many, many billions there. We will invest billions at the railroad, but it’ll all be to improve the railroad. It won’t be to buy additional businesses. So far this year, if you think about it, counting yesterday — now, two of these deals started last year — but we’ve spent 5 billion on acquisitions, roughly. And, of course, in the first quarter, we spent another 2.8 billion on property, plant, and equipment. But we are finding — we are finding things to do that tend to sop up the cash.

We always will have $20 billion around Berkshire. We will never be dependent on the kindness of strangers. It didn’t work that well for Blanche DuBois, either. But in any event, the — we don’t count on bank lines. You know, we don’t count on — we don’t count on anything. There will be some time in the next 100 years, and it may be tomorrow and it may be 100 years from now, and nobody knows, you know, where we cannot depend on anybody else to keep our own strength and to maintain our operations. And we spent too long building Berkshire to have that one moment destroy us. I mean, we lent money, as you probably know, to Harley-Davidson at 15 percent. And we lent it at a time when short-term rates were probably a half a percent. Well, Harley-Davidson is a fine company — but it, like Goldman Sachs and General Electric and a bunch of other companies —we lent money to Tiffany’s — they — you know, they needed — when you need cash, you know, it’s the thing — it’s the only thing — you need.

And it’s because other people aren’t coming up with it. I’ve always said that, you know, cash is — available cash or credit — is a lot like oxygen: that you don’t notice it — the lack of it — 99.9 percent of the time. But if it’s absent, it’s the only thing you notice. And we don’t want to be in that position. So we will keep 20 billion. We will never go to sleep at night worrying about any event that’s taken place that could hurt our ability to keep playing our game. And above 20 billion, we’ll try to find ways to invest it intelligently. And so far, we’ve generally done it. I mean, right — you know, we always had something above that. But, you know, we’ve spent a fair amount of money so far this year. We’ll probably spend more later in the year. So, so far, I feel we could get the cash out at reasonable returns. We never feel a compulsion to use it though, just because it’s there. Charlie?

CHARLIE MUNGER: I think we’re very lucky to have these businesses that can employ a lot of new capital at very respectable rates. And if — earlier in the history of Berkshire, we didn’t have such automatic opportunities. And now that we’re so affluent, we really are way better off having these opportunities. It’s a blessing. I mean, who would want to get rid of MidAmerican and the Burlington Northern Railroad? Nobody in his right mind. I mean, we love the opportunity to invest more capital intelligently in a world where short-term interest rates are half a percent, or lower.

WARREN BUFFETT: And we love the opportunity to go in with 3G at Heinz and —

CHARLIE MUNGER: Yes.

WARREN BUFFETT: —employ significant capital. We’ll get the chances to use capital. Eventually, you know, compound interest will catch up with us. And it’s certainly dampened things. But it hasn’t delivered its final blow yet.

24. Buffett and Munger disagree, but never argue

WARREN BUFFETT: Station 6.

AUDIENCE MEMBER: Hi Warren, Charlie. John Norwood from West Des Moines, Iowa. Thank you so much for the annual meetings. And please don’t move it to Dallas or some other place. I’ve got my system worked out here.

WARREN BUFFETT: We won’t.

AUDIENCE MEMBER: Thank you. Hey, two quick questions. One is allocation of capital and how you wrestle with the operating companies and how much cash comes up to the operating companies — or comes up to the mother ship — versus the operating companies. And you and Charlie, do you ever fight or argue? And any lessons over the years for how you manage your partnership of two? Thank you.

WARREN BUFFETT: Yeah. Charlie and I have never had an argument. We met in 19 — when I was 29. He was 35. We’re a little older now. And in those years, 55 years, we’ve disagreed on a lot of things. And it’s just never led, and never will, lead to an argument. We argue with other people. (Laughs) But it just — it hasn’t occurred. I called Charlie on the Coca-Cola vote, you know, and then said what the proxy statement said and everything. Said, “What do you think?” And we thought alike, you know? Sometimes we don’t think alike. And we never go away in the least bit mad if we don’t, or —

CHARLIE MUNGER: Most of the time, we think alike. That’s one of the problems. If one of us misses it, the other is likely to, too. (Laughter)

WARREN BUFFETT: Yeah. I would say that — well, there’s no question. If you look at the really bad mistakes we’ve made, I’ve made them. I’m probably a little more inclined toward action than Charlie. Would you say that’s fair, Charlie? Or —

CHARLIE MUNGER: Well, you once called me the abominable ‘no’ man. (Laughter)

25. Berkshire’s cash cushion is partially held by subsidiaries

WARREN BUFFETT: Now we’ve missed — what’s the — what was the first part of the question? (Laughter)

AUDIENCE MEMBER: Capital allocation. How do you decide how much cash comes up from the operating companies —

WARREN BUFFETT: Yeah, that’s —

AUDIENCE MEMBER: — to the mother ship?

WARREN BUFFETT: Yeah, that’s pretty simple, in that we don’t really care too much where that 20 billion minimum is. We wouldn’t — but we don’t count the money in a regulated — well, in the energy business or the railroad. So we really count the money that we could make a phone call and get. With interest rates at these levels, we sit around sometimes with — every one of our companies, I would say, probably has more cash in it than if some other large conglomerate was running the place. They would probably have sweep accounts and all of that. And we may get around to that at some point, but it just doesn’t make that much difference, because if we had it at the parent company, we’d have it out at five basis points. And if it’s at the — if it’s down at the subsidiary, it’s probably getting five basis points. So we’re not — it’s not something we think about on a day to day or week to week or month to month basis. I know where the cash is.

And I know when we’re going to need cash and I know what I’m thinking about doing, or may possibly do in the next few months, that maybe something’s a 50/50 probability of happening. And anything I am committing to do, I know where the cash is coming from. But it doesn’t mean that we try to get it all in the parent company, day by day or week by week like many companies do. We could change that procedure someday. Maybe a sweep account would make sense at some point. Probably would. But we’re not big disciplinarians of our subsidiaries day by day. We don’t want them to feel that way. And there’s one company I’m thinking of, where I’ve never been there. Probably only talked to the fellow who runs it three or four times in ten years. You know, and there’s a lot of cash around. And every now and then, he sends me some. And if I really need it, I mean, I know where it is. And he’ll give it to me.

But there’s — it doesn’t really make much difference, you know, whether it’s sitting there, whether it’s sitting at Berkshire. I don’t want to encourage to our managers of our other subsidiaries who are listening to this a new way of behaving. But, I sort of adapt to the companies, except when we really need the money, and then I grab it. (Laughter) Charlie?

CHARLIE MUNGER: That’s just fine.

26. Buffett admits he’s “slow to make personnel changes”

WARREN BUFFETT: Carol?

CAROL LOOMIS: This question comes from an astute fellow named Richard Sercer of Tucson, who spotted an opening and is going for it. And it actually reminds me of a question that you, Warren, or Charlie, could’ve thought up yourself. “In an interview on April 23rd, 2014 about the Q&A session, Warren said, quote, ‘I hope we will get questions that probe at our weak points.’ My question is, what is our weak points and what can be done to address them?” (Laughter)

WARREN BUFFETT: Well, that would spoil all the fun for the journalists. (Laughs) They’re the ones that are supposed to look for the weak points. We have a lot of weak — we point them out. You know, I’ve just pointed out one. Probably, I would say if you’d — if we’d — executed a sweep account for all our subsidiaries some years ago, you know, we would have a few more dollars than we have now. You know, it — who knows what they’re doing with some of those balances in terms of — we wouldn’t — it wouldn’t be because we do riskier things. But we — you know — we are very disciplined in some ways. And by ordinary business standards, we’re sloppy in other ways. And, oh, well, a clear weak point of mine would be I’m slow to make personnel changes. I mean, I like the managers we have. And Charlie and I had a wonderful friend who couldn’t have been a greater guy. And, you know, we were slow to make a change there. We loved the guy.

And it wasn’t killing us in our business. And how long would you say we went beyond where somebody else would’ve acted in that case, Charlie?

CHARLIE MUNGER: Well, I don’t know exactly. But that, turning to the sweep account system, reminds me of a friend I had when I was in the Air Corps and he was a very skinny man. And he decided to give blood. And they put the needle into his arm and the blood stopped flowing. And the nurse just started stripping his arm as though it were the udder of a cow. And he got the impression that he was going to — they were going to get that blood whether it took all he had. And he fainted. It was a very unpleasant occurrence. And I don’t think a sweep account is all that pleasant to sit there and just — every little dollar comes in, somebody sweeps it away.

WARREN BUFFETT: Charlie, our —

CHARLIE MUNGER: I like the tone of our business.

WARREN BUFFETT: Our managers are listening here. I mean, don’t give them that illustration to use when I ask for money. (Laughter)

CHARLIE MUNGER: But, you know, I’ve seen people subject to — Teledyne and Litton, those people, swept every dime every day, basically. And it was a little more economic, but it created a tone in the company that — which I think is less desirable than ours.

WARREN BUFFETT: We’ve waited too long on managers, though, sometimes, Charlie.

CHARLIE MUNGER: Well, sure. You and I participated in taking one man directly from an executive chair into a Alzheimer’s home. There was no — (Laughter)

WARREN BUFFETT: You’re hitting a sensitive subject here, Charlie. (Laughter)

CHARLIE MUNGER: We’d arranged that he could do no harm, and we loved him well enough so that we just made it easy for him. I’ve never regretted it, have you?

WARREN BUFFETT: No. Not —

CHARLIE MUNGER: No.

WARREN BUFFETT: Not at all. Not at all. It —

CHARLIE MUNGER: On the other hand, I want to be pretty careful.

WARREN BUFFETT: It — we will be slow. And we — there will be times when what you might call our lack of supervision over subsidiaries, you know, we’ll miss something. Now, we think that giving our managers the degree of freedom that they enjoy will also accomplish a lot. So someone will come along someday and say, “If you’d had many more checks and oversight and all of that sort of thing,” you know, something — well, something will happen at Berkshire and they’ll say, “That wouldn’t have happened if you’d followed the procedure that some other company followed.” And they’ll be right. But what they won’t be able to measure is how much on the positive side we have achieved with dozens and dozens of people because we gave them that same sort of leeway. I mean, we operate differently in terms of the level of control and supervision. You know, we don’t have a general counsel’s office at Berkshire. We don’t have a human relations department at Berkshire. And that would be almost unthinkable to other companies.

And we’re not saying that’s a 100 percent benefit in all ways. We think — but we think on balance, it’s a benefit. But when the down side of such a procedure shows up, people will say, “Well, you should of done it differently and you should’ve been spending lots of money over the years and restricting the activities more of your subsidiary managers,” and so on. And our reaction will be that they are wrong. But we will look bad in that individual case. Wouldn’t you say that’s true, Charlie?

CHARLIE MUNGER: Yeah. The — by the standards of the rest of the world, we over trust. And so far, our results have been way better because we carefully selected people because they were going to be over trusted. And it’s worked very well for us. And, I think a lot of places work better when they create a culture of deserved trust. And that’s been our system. And some people regard that as a weakness. And this modern accounting treatment, when everybody’s measured on internal controls, I think it’s going to do more harm than good. (Applause)

WARREN BUFFETT: I think people may think that what we get turned on is by finding some stock we’d like to buy. That’s fine. But what really — there’s no comparison — what really turns us on is finding a business that we want to buy, and that fits well for Berkshire, and that’ll be earning money for Berkshire 10 and 20 and 50 years from now. That’s what we’re — that’s what we’ve been trying to build for 49 years. And marketable securities have played a big part in that, because the profits that we’ve made from them have helped do that, and it’s a great place to deploy capital on an — you know, it’s easy to do there. But if you — what we’re really thinking about, at least Charlie and I — we’ve got Todd and Ted thinking about marketable securities — what we’re really thinking about is buying businesses. And that’s what it’ll continue to be. We’re in no hurry to sell any of those stocks you mentioned.

(Laughs) They — there probably would be other stocks — if we were going to go out to raise five or 10 billion from stocks, they would not be the names you mentioned.

31. Still reluctant to borrow despite cheap money

WARREN BUFFETT: OK. Station 8.

AUDIENCE MEMBER: Hello Warren, Charlie. My name is Stefano Grasso (PH) and I come from Genova, Italy, all the way from there. It’s a pleasure to be here today with you. I have a question about increasing leverage for Berkshire in this day. This question is really to trigger a discussion and to hear your thoughts on that. And also, this question was triggered by the fact that following the acquisition of BNSF, few years ago, which was partially financed by Berkshire stock, shortly after, there was plenty of cash around. There could be different advantages for Berkshire to wisely increase leverage these days. Some generally true for all the companies. Some Berkshire specific. And the Berkshire specific, most important one for me as a shareholder, is that the investment decision made to invest the funds would be made by the present team, you and the other managers. Question is then, why not go out and ask for several billions in bonds with a long maturity, and maybe even with some earlier endorsement or callable options embedded at Berkshire discretion, and good — and make a good use of it? Thank you.

WARREN BUFFETT: Well, what you say makes great sense. And it’s the kind of thing Charlie and I used — I think if you’d asked Charlie and me 40 years ago, that if we were looking at the present set of interest rates and we had some wonderful businesses that were making a lot of money, whether we would have gone out and borrowed a whole lot of money for the long term. We would’ve said yes, right, Charlie?

CHARLIE MUNGER: Wouldn’t have been a hard decision.

WARREN BUFFETT: But, we’ve got several reasons. We — A, we do have a good way of generating funds other than through equity: through float. And we’ve done that to the tune of 77 billion. And we don’t like the idea of operating a very conservatively-leveraged company, and then changing courses so that the people who bought bonds that were rated double-A, sort of find themselves with much lower rated bonds of the sort. We don’t have any problem leveraging up the utility or the railroad. They deserve to have even a lot more debt than they do, but we keep it sort of in line with what the rating agencies think should be conventional ratios. But they’re — if you look — if you analytically look at them — both of them could withstand a fair amount more debt. At the parent level, we — you know, looking back on the BNSF deal, we borrowed some money that time and we used some equity. I think using equity helped us make the deal. But it was, you know, it was not a smart thing to do, basically.

I should — and I could’ve always gone to the market and repurchased a bunch of stocks subsequently, and that’s probably what I should’ve done on that. So I understand your point. I completely — you know, another 30 or 40 billion of debt at Berkshire would be nothing and it would cost very little. We don’t actually have great places to put it now, as evidenced by the fact that we’ve got 25 billion or so of excess cash. We’d be — we are reluctant to leverage it up a lot at the parent now, since we have these other sources of money that are really pretty attractive. We are selling what we call structured settlements, for example, that have a very long duration. And they actually have an interest cost to us of less than if we were to sell bonds. So we are doing certain things that are along the lines you urge, but not nearly as aggressively as you urge. And you probably are right. And you’re certainly right if we saw a $50 billion deal and we passed on it for some reason because we were unwilling to take on some debt.

If we see a really good $50 billion deal, we’ll figure out a way to do it. Charlie?

CHARLIE MUNGER: I think we’d welcome it. We’re — even though what you suggest is intelligent, we’re probably not going to do it in advance.

WARREN BUFFETT: You caught the last two words there.

32. Climate change threat doesn’t affect investment decisions

WARREN BUFFETT: Andrew.

ANDREW ROSS SORKIN: Question comes from Rory Holscher in Galena, Illinois. This question is about Berkshire’s investments in climate change. “On one hand, Berkshire’s utilities have large commitments to wind and solar power. Berkshire also has an investment in BYD, an innovative transportation company that may be comparable in some ways to Tesla. “On the other hand, Burlington Northern hauls a lot of coal. You point out in the 2013 annual report that its profits could shrink if coal burning was curtailed. And then there’s the reinsurance business. How do these and other Berkshire investments align with your understanding of the risks and opportunities posed by climate change? How should we think about this as investors?”

WARREN BUFFETT: Well, I think that you’ve stated the facts on a whole bunch of businesses. And, I mean, if you own a railroad that’s carrying a lot of coal, it’ll carry a lot of coal for a long period. A very long period. But it’ll probably carry less at some point. I don’t think —I think that’s very likely, too. But, I get all these questions from people who tell me they want me to fill out lots of forms and everything about how it’ll affect our insurance business. It doesn’t — it just doesn’t operate in that — in that time period. I mean, we are not making — when Ajit and I talk about what we’ll charge for catastrophe insurance, you know, whether it’s hurricanes in Florida, or whether it’s earthquakes in New Zealand, or whatever it may be, the year-to-year change in probabilities on that are, at least in our view, extremely low. I mean, it doesn’t come close to being anything that affects your prices in any material way in any given year.

And, you know, we will continue to develop alternative sources of energy. We’ll continue to use coal in our coal generation plants until the utility commissions under which we operate tell us that we should do something different. We have no choice about that. We, incidentally, have no — I mean, we’re happy to carry the coal, but beyond that, we are a common carrier. I mean, we might love to turn away chlorine or ammonia or something like that because of the dangers in carrying it. And we can’t get compensated adequately for that. But we are a common carrier. So, we — by law, we’re required to carry the freight that is offered to us. So I — I don’t think in making an investment decision on Berkshire Hathaway, or most companies, virtually all of the companies I can think of, that climate change should be a factor in the decision- making process. Charlie?

CHARLIE MUNGER: Yeah, I think a lot of the people who think they know how climate change is going to change weather patterns and hurricanes are overclaiming. (Applause) We’re sort of agnostic. It isn’t that there isn’t some global warming, because there plainly is. But the people who think they know exactly what’s going to happen and how many people are going to die from tropical diseases and so forth are mostly talking through their hats. I think there’s a class of people who like the idea they’ve got a calamity to worry about. And —

WARREN BUFFETT: Well, but — and when you say it, I mean, just in terms of being an economic variable in making a decision, this —

CHARLIE MUNGER: No. We’re not saying, “How can we structure our whole investment program to take into account what we think we know about climate change?” But I think we’re very well located long term, no matter what happens. I think that transmission lines and more or — we’re going to have to produce a lot more electricity directly from the sun or indirectly through things like wind. And, we’re beautifully positioned. It’s just like GEICO made a lot of money when the internet came along, that they didn’t really plan on, I think we’ll make a lot of money as more and more electricity is produced more directly from the sun. So I think we’re in a very good shape. But I don’t think we deserve any great credit for it. We just stumbled into it.

33. Praise for portfolio managers Todd Combs and Ted Weschler

WARREN BUFFETT: Gregg?

GREGG WARREN: Since Berkshire started to transfer some of the responsibility for the company’s investment portfolio over to Todd Combs and Ted Weschler, the two men have gone from managing around $3 billion each in early 2012, to managing more than $7 billion each earlier this year. That said, this still represents less than 10 percent of the equity portion of your investment portfolio, with big legacy positions in Wells Fargo, Coca-Cola, American Express, IBM and Proctor & Gamble, overshadowing the rest of the holdings. Can you give us an update on how much money each of your lieutenants is now running and how much you see that growing into over the next five years? And given that both men have seemingly been involved in things beyond their roles as portfolio managers the last couple of years, how much do you expect their roles to expand over time? And on a completely separate note, at what point can we expect to see Todd and Ted join you and Charlie up there on stage to talk about their efforts managing Berkshire’s investment portfolio?

WARREN BUFFETT: I got through college answering fewer questions than that. (Laughter) They are managing about —it’s a little over 7 billion now. We will change that periodically and it will always be upward. But we don’t change it month by month. I mean, their portfolios may change in value month by month. But they will be handling more money in the future than they are now. I think, to some extent, they, as well as I — you know, I’ve had the unpleasant experience of handling more and more money as the years go by — they are seeing that it does get a little more difficult as the sums get larger. But it’s still far better to keep moving money over to them and away from me as time passes. And that’ll continue to be the case. They’re both terrific additions to Berkshire, beyond their investment skills in that they know — they each know — a whole lot about business. They know a whole lot about management.

And there are a lot of things that come across the desk at Berkshire that I get an idea on, but I just don’t feel like carrying out myself, because they might involve a lot of time, particularly if they get involved in negotiating small points and that sort of thing. So Ted and Todd have both, as I mentioned in the report, been very helpful in doing things beyond their investment management duties that have added a significant value to Berkshire. And I think it’s a cinch that that will continue. They want to do it. They enjoy doing it. They don’t ask for extra compensation, at all, because they do it. They’re 100 percent attuned to Berkshire. They know how I think. And if I tell them, you know, “Here’s a deal that I think makes sense if you can get it done,” they’ll know why it makes sense, and they’ll know how to get it done, and they’ll spend the time to do it. So it’s been a big, big plus for Berkshire to bring them onboard. And they’ll be more important factors as the years go by. OK. Charlie?

I’m sorry, I’m —

CHARLIE MUNGER: Nothing to add.

WARREN BUFFETT: OK.

CHARLIE MUNGER: How’s that?

34. Praise for Federal Reserve and Chairman Ben Bernanke

WARREN BUFFETT: Station 9.

AUDIENCE MEMBER: Good morning, Warren and Charlie. My name is Jason. I’m from Toronto and my question relates to the general financial markets. We’ve been in an environment of virtually zero interest rates now for many years. In recent times, prolonged periods of low rates have led to asset bubbles, such as the housing bubble and, potentially, now a bond bubble. If you were running the Fed, what would be your policy with respect to interest rates? Do you see a need for a hike? And what would be your time horizon for such a change? Thank you.

WARREN BUFFETT: Well, since it’s — you’re right about the — who would’ve guessed five years ago that you’d have had rates this low for this long? You’re — I would say that I’m surprised at, really, how well things are going. I don’t think I would be doing much differently. And I particularly say that because it’s worked so well so far. So I would like to say that I would’ve done exactly the same thing and take credit for it. I’ve been surprised at how well this worked. But as I said last year, this is really an interesting movie because we haven’t seen it before. And what makes it interesting is also we don’t know how it ends. But, I think Ben Bernanke was a hero, both at the time of the crash — or the panic — and subsequently. I think he’s a very smart man. I think he handled things very well.

What was interesting to me was when the minutes of the Fed from the period in 2007 and 2008 came out, it was interesting to me how a number of the members of the Fed were not getting it, as to what was happening. That was really fascinating. It wasn’t — there were a lot of them that didn’t really understand, it seems that way, or some of them that didn’t understand just how serious things were. And so I give particular credit to Bernanke, considering the fact that he was really not getting a cons — certainly not a unanimous view from those surrounding him, that the kind of actions he knew were necessary, were really necessary. And yet, he went ahead with them. And in my opinion, did a masterful job. And from everything I’ve seen of Janet Yellen, I feel the same way about her. We will see how this movie plays out. You know, I do not know the answer as to what happens if you keep rates close to zero for a very, very long time. And keep absorbing more and more of the debt issuance of the country because so far, we’ve tapered, but we’re still buying.

I’d be interested to hear Charlie’s thoughts on it.

CHARLIE MUNGER: Well, nobody, for instance, in Japan would ever have anticipated that interest rates would go way down and stay down for 20 years. And nobody would’ve expected common stocks to decline by huge amounts and stay down for 20 years. So strange things have happened. And they’re very confusing to the economics profession. In fact, if you’re not confused, you really probably don’t understand it very well. And at Berkshire, what I noticed is there aren’t many long-term bonds being bought.

WARREN BUFFETT: Yeah. We — well, you know, in 2008, I wrote an article saying, you know, that — everybody was saying cash is king. Well, cash may have been king if you used it, but cash was the dumbest damn thing you could possibly own, you know, if you weren’t going to use it. And people cling to cash at — usually at the wrong times. But it is — a zero interest rate policy has had a huge effect, both in rejuvenating the economy and — and in terms of asset prices. It has not, in my view, produced a bubble. That doesn’t mean it can’t produce one. But this is not — this is not a bubble situation, at all, that we’re living in. But it’s an unusual situation that we’re living in. Any further thoughts, Charlie?

CHARLIE MUNGER: No, I’m as confused as you are.

WARREN BUFFETT: Oh good. Good. (Laughter) That’s why we get along so well.

35. How Berkshire benefits from being a conglomerate

WARREN BUFFETT: Carol?

CAROL LOOMIS: This question concerns another uncertainty. It’s from Chris Gotcho (PH) of Gotcho Capital Management in New York City. “You’ve been looking for a credentialed bear to ask questions at this meeting. I’m not it. In fact, selling short on Berkshire would be quite silly. “However, in the long term, Berkshire has a business model of owning over 70 non- financial, unrelated businesses — bricks and chocolate, for example — which is a model that has almost universally not worked well in the past 100 years of American business. “The model has worked well for you two, Mr. Buffett and Mr. Munger, who are uniquely talented. “But the question is, the probabilities do not seem likely to be favorable that their successors will be able to have it continue to work nearly as well.” So that is my question.

WARREN BUFFETT: OK. Actually, the — it’s interesting. The model has worked well for America. I mean, if you look at all these disparate businesses in America, they’ve done extraordinarily well over time. So if you want to look at the Dow Jones average as one entity — now, it was a changing group of companies over a 100-year period — but, you know, any business unit that goes from 67 — or 66 — to 11,497 while paying you out a fair amount of money every year, actually is a model that’s worked pretty well. But it hasn’t been, of course, under one management. But owning a group of good businesses is not a terrible business plan. A good many of the conglomerates were put together to perform financial magic of one sort or another. They were based upon — you know, if you go back to the Litton Industries and the Gulf and Westerns and just — you could name them by the hundreds. They were really put together — Ling-Temp — LTV, and — on the idea of serial issuance of stock, where you issued stock that was selling at 20 times earnings to buy businesses that were at ten times earnings.

And it was the idea that somehow you could fool people into continuously riding along on this chain letter scheme, without the primary thought being given to what you were actually building in the management. I think our business plan makes nothing but great sense, to own a great group, a group of great businesses, diversified, outstanding managers, conservatively capitalized. And with one enormous advantage, which people don’t really understand. I mean, capitalism is about, in an important way, it’s about the allocation of capital. And we have a system at Berkshire where we can allocate capital without tax consequences. So we can move businesses from See’s Candy, to generate surplus capital, to other areas. It doesn’t hurt See’s in the process, and we can move it, as the textbooks say, to places where capital can be usefully employed, like wind farms or whatever it may be. So we are — you know — there’s nobody else really better situated to do that than Berkshire Hathaway, and it makes perfectly good sense. But it has to be applied with business-like principles, rather than with stock promotion principles.

And I would say a great many of the conglomerates have been — have had, as their underlying premise, stock promotion. You know, you saw what happened with Tyco or — the serial acquirers were usually interested in issuing a lot of stock. I think if you had to look at one of the primary indicators of what sort of species you’re viewing, you would see whether somebody’s issuing — if they’re issuing stock continuously, one way or another, they’ve probably got a chain letter game going on. And that does come to a bad end. I think our method of acquiring for cash, and acquiring good businesses, and building many, many sources of growing earning power, I think, is a terrific model. Charlie?

CHARLIE MUNGER: Well, I think there’re a couple of differences between us and the people who are generally thought to have failed at a conglomerate model. One is we have an alternative when there’s nothing to buy in the way of companies. We’ve got more securities to buy in the insurance company portfolios. And that’s an option which most of the other conglomerates didn’t have. Number two, they were hell bent to buy something or other quite regularly. And we don’t feel any compulsion to buy. We’re willing to just sit until something makes sense. We’re quite different. We’re a lot more like the Mellon brothers than we are like Gulf and Western. And the Mellon brothers did very, very well for what, 50, 60, 70 years. And they were willing to own minority interest, they were willing to grow companies, they were a lot like us. And so I don’t think we’re a standard conglomerate. And I think we’re likely to continue to do very well, sort of like if the Mellon brothers had just kept young forever.

WARREN BUFFETT: Now you’re talking.

CHARLIE MUNGER: Yeah. (Laughter)

36. Praise for Forest River’s Pete Liegl

WARREN BUFFETT: Jonathan.

JONATHAN BRANDT: Forest River is one of Berkshire’s better performing acquisitions. Since Berkshire purchased it in 2005, its sales have grown considerably faster than those of its principle competitor, Thor. And I believe it has taken the number one spot at retail for recreational vehicles. Can you explain what Forest River is doing differently from Thor? And tell us whether Forest River is accepting lower operating margins than Thor’s 7 percent to gain the share. Does Forest River have any sustainable, structural advantages over Thor that will help it maintain its number one position? Also, with three companies now accounting for about 80 percent of the share in the RV market, are there greater barriers to entry than in the past, or can a feisty upstart like Forest River, in its day, still come out of nowhere and gain a lot of share?

WARREN BUFFETT: Yeah. We bought a company called Forest River, run by a fellow named Pete Liegl, I’d say about ten years ago or so. And it’s interesting. Pete, who is not an MBA type at all, he’s a terrific guy, he built up a — (Laughter) That was not a statement, that was an observation. (Laughter) Pete built up a very successful, but much smaller, RV business. And he sold it to a private equity firm in the mid-1990s. And they promptly started telling him how to run it. And he, very shortly thereafter, told them to go to hell. And, not very long after that, it went broke, which is not an unusual — I would’ve predicted that. So Pete then bought it out of bankruptcy, and rebuilt it, and then came to see me about ten years ago. And in one afternoon — we went to dinner that night. He brought his wife and his daughter. And we bought the business. And he made me a couple of promises then. He’s very limited in his promises. I told him what I’d do.

And we’ve lived happily ever after. I’ve never been to Forest River. It’s based in Elkhart, Indiana. I hope it’s there. I mean, maybe they’re just making up these figures — you know? I could see that. Some guy saying, “What figures shall we send Warren this month, you know, ha, ha, ha.” (Laughter) Pete does a terrific job of running the company. We made a deal at the time he came, on incentive comp and base comp. He’s never suggested a change, I’ve never suggested a change. He’s built the company to where it’ll do over — I think it’ll do over $4 billion of business this year. I’ve probably had three or four phone calls with him in the whole time. It’s his company. And he does a sensational job. I don’t know about the Thor-Forest River situation in terms of how tough it is to go in to compete with him. I think it’d be tough to compete with Pete under any circumstances.

His IT department, for a $4 billion business, consists of six people. He just knows what’s going on in the place. And the important thing is that it’s his company. I couldn’t run an RV company, and we don’t have anybody at headquarters that could run one. It’s a tough business. And you do work on narrow margins, to get to your point on that, Jonny. The —it’s a business that runs with maybe 11 or 12 percent gross margins, and probably 5 to 6 percent of SG&A. So, you know, your margins are in that 6-or-so percent range. We have a very good — both from his standpoint and from our standpoint — we worked out an incentive comp. Like I say, we worked it out that afternoon in Omaha when he came by. And it’s worked for him. It’s worked for us. You know, it couldn’t be a better arrangement. I wish we had 20 like it. And probably, most of our shareholders don’t even know we own Forest River.

But that is a company that will do 4 billion of business this year, and I’ll bet will do more business over time. It’s the leader in its industry. The industry’s not going to go away. And, you know, maybe we can even sell a little insurance on RVs. So that’s the story on Forest River.

37. Modest impact of Bakken oil shale on Berkshire

WARREN BUFFETT: Station 10.

AUDIENCE MEMBER: Hi, Warren, Charlie. My name is Vishal Patel (PH). I’m visiting from Toronto, Canada, and my question is about the oil sands. Can you please share with the audience your view on the oil sands industry and their impact on Berkshire Hathaway?

WARREN BUFFETT: Well, in terms of —are you thinking of the oil sands or are you thinking of shale production?

AUDIENCE MEMBER: I’m thinking oil sands, Alberta.

WARREN BUFFETT: Alberta, yeah.

AUDIENCE MEMBER: Keystone XL.

WARREN BUFFETT: It’s not a huge impact. We have a crane business at Marmon that does a lot of business in oil development, generally. But, certainly, is active in the oil sands. We will soon have a transmission operation that will cover 85 percent of Alberta. Alberta’s a big place. It’ll have 8,000 miles, or something like that, of transmission lines, for example. But the oil sands business is — I mean, you know, oil sands are huge. And we own some Exxon Mobil, when they’ve got an operation in the oil sands, obviously. One thing you might find kind of interesting, you know, we are moving 700,000 barrels a day of crude oil on our railroad. We’ve got — probably got — maybe, nine unit trains — now [BNSF Executive Chairman] Matt [Rose] can correct me on that — you know, that carry 100 cars or so.

And each one has 650 barrels, or so, of oil so that — oil, you may find interesting, not only is there a significant advantage in terms of the flexibility of where you take it, so that spreads are different in different places, and you can move it to refineries that you might otherwise have trouble moving it to. Rail’s flexible that way. But rail, actually, you know — mentally, you think of oil gushing through pipelines. But rail is probably, I would say, close to twice as fast in moving oil as is — as are pipelines. But we recently bought a company from Phillips 66. We got it in an exchange for our Phillips stock. We bought a specialty chemicals company. And its main product is a chemical additive that causes oil to move through pipelines about 10 percent faster than it would otherwise. So it may take a day off of a trip. So we’re actually in the pipeline business in a small way — the crude pipeline business — in a small way, through that. I don’t think — I think the oil sands are an important asset for mankind, obviously. There’s a huge amount of oil there.

They’re an important asset for mankind, you know, in — over the centuries to come. But I don’t think there’s — I don’t think it will dramatically change anything at Berkshire. Matt might have a different view on that. I’ll ask Charlie to talk. And then if Matt would like to say anything, I’d be glad to hear from him, too.

CHARLIE MUNGER: Well, but, a lot of the oil sand production uses natural gas to produce the heavy oil. So it’s a very peculiar thing. It’s economic only if oil stays at a very high price, and it’s delightfully economic only if natural gas is too cheap. So it’s a very peculiar business. And it is good for mankind. But whether it’s a great investment or not, I haven’t the faintest idea.

WARREN BUFFETT: Matt, would you — do you have anything to add on the crude situation there?

38. Update on Buffett’s hedge fund bet

WARREN BUFFETT: OK. We’re at noon. I promised a group — some people — six years ago I made a bet for charity on how a index — Standard and Poor’s 500 index fund — would compare in performance to a group of hedge funds. And a firm in New York took me up on the bet. And I promised that every year I would give the up-to-date results on how we’re doing. And it’s getting to be more fun to give these results every year. (Laughter) We’re now six years into the bet. And it’s interesting, because the people who selected these funds are very decent people and smart people. And, obviously, the fund of funds gets paid based on the per — they get paid a fee, naturally. But they also get paid an additional performance fee based on how the hedge funds they select do. So they have every economic incentive to come up with a wonderful group of hedge funds. And underneath these fund — five funds of funds that are involved in the bet — there are probably, at least, 200 hedge funds that the fund of fund managers have carefully picked in order to enhance their own income.

They got the ultimate motivation going for them. So we are now five years — six years — into the bet. And the first year, the fund of fund groups, in a down market, did considerably better than the S&P. But as you can see in the five years subsequently, the S&P has been running away, to some degree. Interestingly enough, we bought — we each put in 350, or something, thousand dollars, and we bought zero-coupon bonds so there would be a million dollars in ten years. We bought ten-year Treasurys, zero coupon. And we bought a million dollars principal. We each put up 350. Well, the way interest rates changed after a few years to practically zero rates, it meant the bonds, even though they had no coupons attached to them, practically went to par. So, a year or two ago, we sold the bonds at about 95 or 6, we got almost the full million dollars. We put that all in Berkshire stock. I guaranteed them that they would have a million dollars at the end of ten years, no matter what happened.

And so the prize looks like it’s going to be quite a bit more than a million dollars when the ten years comes around, so. So, so far, everyone’s happy.

Afternoon Session

1. Record attendance

WARREN BUFFETT: OK, let’s get ready to proceed. We never get any precise figures, because people come and go from the meeting. But I did know that we sent out about 11,000 more tickets this year than in any other year, and we had all the overflow rooms filled. We’re using space in a room over at the Hilton and everything, so clearly this year we have substantial more attendance than any year in the past, and I hope the spending patterns reflect that. (Laughter)

2. Risk of change to businesses

WARREN BUFFETT: So with that, we’ll go to Becky. Assuming she’s here.

BECKY QUICK: I am, I’m here.

WARREN BUFFETT: OK.

BECKY QUICK: Let’s see, this is a question that comes, and I hope I pronounce your name correctly, Michael. It’s Michael — Michael Locheck (PH) and he says, “Energy Future Holdings’ likely bankruptcy is a consequence of unexpected and dramatic decline in prices of natural gas prices caused by a revolution in drilling technology. To what extent do you believe other assets held in Berkshire’s portfolio, debt, equity, et cetera, may be subject to disruptive technological or other changes that erode business models and barriers to entry?” “For example, changes in consumer behavior and regulation could affect Coca-Cola. Revolution in payment systems could affect American Express, ever-increasing rate of change in technology and competitive landscape could affect IBM, wireless delivery of media content and urbanization could be disruptive to DirecTV. “Could you also comment on whether participation of some sponsors of Energy Future Holdings, which include the very best of private equity, contributed to your decision to invest? Was it the degree of crowd mentality at play, and what lessons are to be learned from the experience?”

WARREN BUFFETT: Yeah, well. I would be unwilling to share the credit for my decision to invest in Energy Future Holdings with anybody else. I would think that’s very unfair of anyone to insinuate that they had anything to do with that decision. That was just a mistake on my part. It was a big — it was a significant mistake, and we will make mistakes in the future. All businesses should constantly be thinking about what can mess up their business model. And with Energy Future Holdings it was a fairly simple assumption that was made that just turned out to be wrong. I mean, the assumption there was that gas prices would stay roughly as high as they were or go higher, and instead they went a whole lot lower. And at that point the whole place toppled. They had a lot of reserve holdings and they had some futures positions which kept them alive for a while. But that was a basic error. We look at all of our businesses as subject to change. A classic case would be GEICO. I mean, GEICO set out in 1936 to operate at low costs and pass on those low costs to the customer through lower prices for something that was a necessity, auto insurance.

And they originally did it by mail offerings, U.S. Postal Service, two people who were government employees. That’s where the name comes from, GEICO, Government Employees Insurance Company. And they had to adapt over the years, and they adapted first to widening classifications. But they went from the U.S. mail, primarily, to the telephone, and later went to the internet, and onto social media. But in there they stumbled one time, too, as they went to adapt, and they — when they left the government employees classification, at one point they became too aggressive about expanding and they almost — they really did go broke. So there’s — change is going on all the time, and it’s going on with all of our businesses. And we want managers that are thinking about change, and what can — what’s going to be needed for their business model in the future. And we know they’re not going look the same five or ten years from now. I mean, BNSF, something as basic as railroads, is looking big at LNG for its locomotives. Everything is going to change.

Our businesses generally deal from strength and they’re generally not subject to rapid change. But they’re all subject to change, and of course, slow change can be much harder to perceive, and can lull you to sleep easier, sometimes than when rapid change is clearly in sight. So I would say, in answer to that question, A) I will make mistakes in the future. I mean, when you — that’s guaranteed. We do not make anything like “bet the company” decisions that will ever cause us real anguish. That just doesn’t happen at Berkshire. But you’re not going to make a lot of decisions without making some significant mistakes. And occasionally they work out very well. Charlie and I, and Sandy Gottesman, in 1966, bought a department store in Baltimore. Now, there’s probably nothing dumber than buying a department store in the mid-1960s. There were four department stores on the corner of Howard and Lexington Street in Baltimore in 1966, and none of them are there. And the number one store, Hutzler’s, went broke a little later than our store went broke.

But fortunately Sandy did a great job of selling it, so the $6 million invested in that department store became worth about $45 billion in Berkshire Hathaway stock as we did other things with the money as we went along. So you do have to be very alert to what is going on in your businesses, and we want our managers to do that. But actually, it’s something that Charlie and I, and our directors, are going to think about, as well as our managers. Charlie?

CHARLIE MUNGER: Yeah, I spoke earlier about the desirability of removing your ignorance piece by piece, and there’s another trick, which is scrambling out of your mistakes. And we’ve been quite good at both, and it’s enormously useful. Imagine Berkshire, a textile mill sure to go broke because power costs in New England were about twice as high as they were in TVA country, a sure-to-fail department store, and a trading stamp sure to be forced out of business by change in mode. Out of that comes Berkshire Hathaway. Talk about scrambling out of mistakes, I think of what we might have done if we’d had a better start. (Laughter)

WARREN BUFFETT: Yeah. The point was driven home to me — my great-grandfather started a grocery store here in Omaha in 1869. And my grandfather was running it in 1929, and he wrote my uncle who was going to be running it with him. And the letter started out, this is in 1929, “The day of the chain store is over.” And that is why we ended up with one grocery store, which went out of business in 1969. It — you really have to face facts around you, and the wish being father to the thought was, unfortunately, what overcame my grandfather.

3. Heinz earning power

WARREN BUFFETT: OK, Jay?

JAY GELB: This question is on the Heinz transaction. Berkshire’s 50 percent ownership in Heinz is included in Berkshire’s results, which can be meaningful to its earnings over time. What is Heinz’s current normalized earning power, after the substantial restructuring of the business, and what do you anticipate Heinz could earn within a few years?

WARREN BUFFETT: Yeah. Well, Heinz will be filing its own 10-Qs. In fact, I guess its first quarter would be — they went to a calendar year now — first quarter would be about due now. So you’ll get to see Heinz’s figures. And I will say this, that Heinz was actually a very reasonably run food company with about 15 percent pre-tax margins for many years, and that’s not an unusual operating margin in the food business. And I would just invite you to look quarter by quarter and maybe next year, too, I think the margins of Heinz will be significantly improved from those historical figures. What Bernardo Hees and his associates have done there is — they’ve just restructured the business model. And I think that the brands, which are all-important, are as strong as ever. And I think the cost structure is going to be significantly improved without cutting into marketing expenditures. So I think you’ll see a significant improvement, but I don’t want to name a number on that. You’ll find it out soon enough.

GREGG WARREN: Thank you, Warren. You’ve been pretty explicit about your acquisition criteria over the years, and some years ago, perhaps around the time of the ISCAR deal, you mentioned at one of the annual meetings that a concerted effort was being made to make non-U.S. companies more aware of Berkshire’s positive attributes as a preferred acquirer. Yet, despite the higher proportion of large family-owned businesses in places like Europe and the fact that over half of the world’s listed market cap currently comes from outside of the U.S., Berkshire has deployed very little capital outside of the U.S. with just ISCAR, and more recently AltaLink, coming to mind. Is the U.S. truly that much more attractive a destination for capital, or is there some other reason why the firm has not deployed serious capital outside of the region?

WARREN BUFFETT: Yeah, no, we’ve never turned down a chance to make a significant acquisition outside the United States because of any feeling we’d much rather be doing something in the United States. We just — you know, you mentioned the Alberta deal. But we have not had as much luck getting on the radar screen of owners around the world as we have in the United States. Our best bet, by far, in buying a business is to buy it from the family of a founder or the founder himself or herself. So we’ve, you know, that’s our strong suit, and in the United States I think almost anybody that fits in that category with a business of size thinks of us. And a fair number would prefer us. I don’t think that same — I think there’s some recognition outside the U.S. Certainly when we heard from ISCAR, that was in 2006, Eitan Wertheimer said, he wrote me a letter, I’d never heard of him before, I’d never heard of the company.

And he said the family had thought about it, and we were the only company to which they wanted to sell, and if they didn’t sell it to us, they weren’t going to sell it. So, there’s some awareness. But I’ve been a little disappointed in that we haven’t had better luck outside the country. And we’ll keep working at it and see what happens. Incidentally, I just talked to Jacob Harpaz, who does an incredible job of running ISCAR. I talked to him yesterday when I was touring the exhibition hall. They set a new record in April. Now, that won’t be the last new record they set. But that may have some slight meaning, in terms of how world business is doing, because they sell, you know, these tiny little cutting tools, and so on, that go into basic industry all over the world. And people don’t buy those because they — you know, they’re going look pretty in their offices or anything else, they buy them because they’re using them up. And, it was a record in April. March had been extremely good, too.

So they are seeing strength in the business that certainly would make it hard to believe there’s weakness going on throughout the industrial world. ISCAR’s been a wonderful company for us. The people have been sensational. The business is extraordinary. It just is — it fits us so well that I just wish I could find a few more like it out there. But this year, aside from the one we announced yesterday, we have not been contacted by any significant ones that made sense. We have heard from people over the last five years, I mean, we’ve — fair number. But nothing that really makes sense. But we’ll keep trying.

WARREN BUFFETT: OK, station 1. We’re back at — here we are.

AUDIENCE MEMBER: Hello, Mr. Buffett, and hello, Mr. Munger. Thank you for being extremely generous with sharing your wisdom. My name is Chander Chawla, and I am visiting from San Francisco. In the past, you have said that people should operate within their circle of competence. My question is, how does one figure out what one’s circle of competence is? (Laughter)

WARREN BUFFETT: Good question. (Laughs) Some of the people in the audience are identifying with it, I can hear them. The — it’s — you know, it is a question of being self-realistic, and that applies outside of business as well. And, I think Charlie and I have been reasonably good at identifying what I would call the perimeter of that circle of competence, but obviously we’ve gone out of it. I would say that in my own case, I’ve gone out of it more often in retail than in any other arena. I think it’s easy to sort of think you understand retail, and then subsequently find out you don’t, as we did with the department store in Baltimore. You could say I was outside of my circle of competence when I bought Berkshire Hathaway, although I bought it, really, to resell as a stock, originally. I probably was out of my circle of competence when I decided that I should go in and buy control of the company. That was a dumb decision — which worked out.

The — being realistic in appraising your own talents and shortcomings, I think — I don’t know whether that’s innate, but some people seem a whole lot better at it than the others. And I certainly know of a number of CEOs that I feel have no idea of where their circle of competence begins and ends. But, we’ve got a number of managers who I think are just terrific at it. I mean, they really know when they’re playing in the game they’re going win in, and they don’t go outside of that game. The ultimate was Mrs. B, at the Furniture Mart. She told me that she did not want stock, in terms of the Berkshire Hathaway deal. Now, that may sound like it was a bad decision. It was a splendid decision. She did not know anything about stock, but she knew a lot about what to do with cash. She knew real estate, she knew retailing, and she knew exactly what she knew and what she didn’t know, and that took her a long, long, long, long way in business life.

And that — that ability to know when you’re playing the game in which you’re going to win, and playing outside of that game, is a huge asset. I can’t tell you the best way to develop a great sense of that about yourself. You might get some of your friends that know you well to offer contributions. Charlie’s given me a few contributions occasionally, saying, “What the hell do you know about that?” That’s one way of putting it, of course. (Laughs) But Charlie, do — can you help him out?

CHARLIE MUNGER: Well, I don’t think it’s as difficult to figure out competence as it may appear to you. If you’re five-foot-two, you don’t have much of a future in the National Basketball League. And if you’re 95 years of age, you probably shouldn’t try and act the romantic lead part in Hollywood. (Laughter) And if you weigh 350 pounds, you probably shouldn’t try and dance the lead part in the Bolshoi Ballet. And if you can hardly count cards at all, you probably shouldn’t try and win chess tournaments playing blindfolded, and so on and so on.

WARREN BUFFETT: You’re ruling out everything I want to do. (Laughter)

CHARLIE MUNGER: But competency is a relative concept. And what a lot of us need, including the one speaking, is — what I needed to get ahead was to compete against idiots, and luckily there’s a large supply. (Laughter)

WARREN BUFFETT: OK, Carol. (Laughter)

CAROL LOOMIS: This question comes back a little to a question asked earlier about your annual performance standard that you comparison. “Mr. Buffett and Mr. Munger, I think of you as running a rational company. But when I look at your annual comparison of Berkshire’s book value per share versus the S&P average, I don’t see any rationality in that at all.” “What is the logic of comparing a stock market index against the rise in an operating company’s book value? And an operating company is predominantly what Berkshire is these days, so why do you annually make this irrational comparison?”

CHARLIE MUNGER: Let me answer that one.

WARREN BUFFETT: OK. (Laughter)

CHARLIE MUNGER: The answer is you’re totally right, and we do that because Warren wants to make it eccentrically difficult for himself. So if you don’t understand people who like to wear hair shirts, you’ll never figure out why anybody would do such a thing. It’s a ridiculous way to make a comparison, but it makes it hard for Warren to look good. And he likes to climb mountains that are difficult. But it’s insane, you’re right. (Laughter and applause)

WARREN BUFFETT: Yeah, yeah. Normally when he goes all wishy washy like that, I like to clarify. But I don’t think I’ll try. (Laughter)

WARREN BUFFETT: OK. Jonathan.

JONATHAN BRANDT: The multiple of pre-tax profit that Berkshire paid for minority interests in Marmon and ISCAR in 2013 were considerably higher than the multiples Berkshire paid for earlier purchases of majority stakes in those two firms. Can you please explain why the valuation formulas changed, why the multiples weren’t fixed for future increases in Berkshire’s stake, which at least in Marmon’s case were always contemplated, and why Berkshire was willing to accept meaningfully lower returns on the more recent purchases, not so many years after the first purchases?

WARREN BUFFETT: Yeah, well, the multiple with ISCAR was actually determined precisely on the basis of which the original purchase was made. In other words when we made the deal in 2006, we took multiples of earnings and allowed for cash and a few things. But — and then we took that formula and we stuck that in as both a put and call option for the family or Berkshire. They had the put, we had the call. And we stuck that in to govern things for, you know, between now and judgment day, and so that there’s no variation from the original formula. We would never — shouldn’t say never, but we had — our style would not be ever to call that from the family, even though we had the right to do it. The put and call were at the same price, or at the same — following the same formula. But the family elected to put it to us, but they put it to us exactly on the same basis as what was involved in the original purchase of the 80 percent. The Marmon deal is entirely different.

The Marmon deal was an installment sale, and, in effect, to make the deal and buy the originals turned out to be 64 percent, we intended it to be 60 but gave them the option to do more. That was simply an installment sale, and we looked at the consequences of the formulas being applied in the future. The family would not have sold us the 64 percent, which they did on the original piece, unless they had the formula applying to the second and third piece that was embodied in the contract. And we looked at that as a single transaction, knowing that if the business improved we would be paying more money, and as the cash position improved, we’d be paying more money later on. But it was all built into the original deal, so one was one — was at exactly the same price, and one was part of a three-step deal, in effect. Charlie?

CHARLIE MUNGER: But the price went up because the value went up.

WARREN BUFFETT: Yeah, but it was — and because it was built into —

CHARLIE MUNGER: Yeah, and we’d agreed to — that that would be — we’d pay value.

WARREN BUFFETT: In both cases, I should say too, both with the Pritzker family at Marmon and with the Wertheimer family at ISCAR, it couldn’t have been — they couldn’t have behaved better — or the feelings are entirely good, everybody felt good about the transaction. The initial transaction and the subsequent transaction. So it pays to have to have deals in which people feel good when they —

CHARLIE MUNGER: Nothing that happened there is that — we got just an enormous respect for the intelligence of those two families. The more we looked at those businesses, the smarter and better those families looked. It was just amazing what each family had done, wouldn’t you say, Warren?

WARREN BUFFETT: Right, right.

CHARLIE MUNGER: Absolutely amazing.

WARREN BUFFETT: And those were two important acquisitions. I mean, they — you know, they add up to lots of intrinsic value. And there, partly because of some accounting peculiarities, but the carrying value of the businesses is well below what the intrinsic business value is now.

CHARLIE MUNGER: And by the way, that Union Tank Car that’s within Marmon is John D. Rockefeller’s old business. The first John D. Rockefeller. It’s amazing how some of these good businesses have lasted.

WARREN BUFFETT: Yeah, well, actually the corporate form it — the original corporation that is Marmon, I’m quite sure, is Rockwood and Company, which I did a cocoa arbitrage with back in 1955 or something, and that’s where I met Jay Pritzker. So it — these things wind their way along. It — one thing you learn in life, but also learn particularly in business, is that you’re going to meet a lot of people and entities and experiences — in the future that — you may have thought were one shot —one stop shops originally in your life.

WARREN BUFFETT: Station 2.

AUDIENCE MEMBER: Mr. Bung — this — Mr. Buffett, Mr. Munger, my name is Nicholas Erdenberger. I hail from the beautiful Garden State of New Jersey. And I guess the — (laughs) — I guess the question —

WARREN BUFFETT: Withhold your applause, applause. (Laughter)

AUDIENCE MEMBER: So I guess this is a follow up question to the question before. I really connect with the idea of not investing in industries you can’t fully understand. Being a young guy who has limited ability to code and who can’t build robots, tech is certainly not an industry I fully understand. And yet these days, the concept of entrepreneurship is nearly synonymous with tech amongst people my age. So my question to you, Mr. Buffett, is if you were 23-years-old with entrepreneurial tendencies, what non-tech industry would you start a business in and why?

WARREN BUFFETT: I’d probably do just what I did when I was 23. (Laughs) The — you know, I would go in the investment business. And I would look at lots of companies and I would go and talk to lots of people, and I would try to learn from them what I could about different industries. One thing I did when I was 23, if I got interested in the coal business, I would go out and see the CEOs of eight or ten coal companies. And the interesting thing was I never made appointments usually or anything, I just dropped in. But they —they felt a fellow from Omaha who looked like me couldn’t be too harmful. So they’d always see me. And I would — I’d ask them a lot of questions, but one question I’d always ask them, two questions at the end, I would ask them if they had to put all of their money into any coal company except their own and go away for ten years and couldn’t change it, which one would it be and why?

And then I would say, after I got an answer to that, I would say, and if as part of that deal they had to sell short in the equivalent amount of money — in one coal company — which would it be and why? And if I went around and talked to everybody in the coal business about that, I would know more about the coal companies from an economic standpoint than any one of those managers probably would. So, I think there’s lots of ways to learn about business. You’re not going learn how to start another Facebook or Google that way, but you can — you can learn a lot about the economic characteristics of companies by reading, personal contact. You do have to have — you have to have a real curiosity about it. I mean, you — I don’t think you can do it because your mother’s telling you to do it, or something of the sort. (Laughs) I think you — it really has to turn you on. And I mean, what could turn you on more than running around asking questions about coal companies? (Laughter) You have to maybe be a little odd, too. But that’s what I would do.

And I might, in the process of doing that, find some industry that particularly interested me, in my case the insurance industry did, and you might become very well equipped, even perhaps, to start your own insurance company, but perhaps to pick the most logical one to go to work for. If you just keep learning things, something will come along that you’ll find extremely useful to do. I mean, it — but you’ve got to be open to it. Charlie?

CHARLIE MUNGER: Well, you might try a version of the trick that Larry Bird used. When he wanted an agent to negotiate his new contract, he asked every agent why he should be selected. And if he was not going be selected, whom the agent would recommend. And since everybody recommended the same number two choice, Larry Bird just hired him and negotiated the best contract in history. There’s —

WARREN BUFFETT: Well —

CHARLIE MUNGER: — there are a lot of tricks that people use.

WARREN BUFFETT: We did the same thing with Solomon, actually. It was a Saturday morning —

CHARLIE MUNGER: Yeah.

WARREN BUFFETT: — when I call —and you were there, Charlie, weren’t you?

CHARLIE MUNGER: Yes —

WARREN BUFFETT: — I wasn’t sure. I called in, I don’t know whether it was eight or ten of the manager — I had just gotten in there on Friday afternoon, and now it’s Saturday morning and we had to open for business Sunday night in Tokyo, and I had to have somebody to run the place. So I called in eight people and I said, you know, “Who besides you would be the ideal person to run this, and why?” One guy told me that there was nobody compared to him. (Laughter) He was gone from the firm within a few months. (Laughter) But — the — it’s not a bad system to use. You can really learn a lot just by asking. I mean, it’s starting to sound a little bit like a Yogi Berra quote or something, but it is — it is literally true that you — if you talk to enough people about something they know something about, and people like to talk. You know, and — here we are talking ourselves. (Laughs) And you just have to be open to it. And you will find your spot.

You may not find it the first day, or the week, or month, but you’ll find what fascinates you. I was very lucky because I found what fascinated me when I was seven or eight of age. But — you know, some people find chess or music, you know, fascinates them when they’re four or five. If you’re lucky you find it early, and sometimes it takes you longer, but you’ll find it.

CHARLIE MUNGER: If it’s a very competitive business, and it plainly requires the qualities that you lack, it should probably be avoided. I could — when I was at Caltech I took thermodynamics, and Homer Joe Stewart, who was a genius, taught the course. And it was fairly apparent to me that no amount of time or effort would turn me into a Homer Joe Stewart. He was utterly, impossibly more talented than I could be. Gave up. I immediately said I wasn’t going try and be a professor of thermodynamics at Caltech. And I’ve done that with field after field, and pretty soon there was only one or two left. (Laughter)

WARREN BUFFETT: Yeah, I had a similar experience in athletics. (Laughter)

WARREN BUFFETT: OK, Becky.

BECKY QUICK: This question comes from Darren Bordemier (PH). He says, “Warren, you’ve commented in the press that you are concerned about the hotel price gauging in the Omaha area during the Berkshire meeting weekend.” (Applause) Hold your applause, you haven’t heard the rest. “Please elaborate further on that position, as it seems to contradict free market capitalism. Shouldn’t the law of supply and demand apply in this case?”

WARREN BUFFETT: Absolutely. And so therefore, since we want to increase the demand, the proper thing to do is increase the supply, right? (Laughs) And that’s why we have encouraged, for example, Airbnb, to come in and — they supplied some rooms this year. But it’s very logical. If you think about most cities, the big events that come to their convention centers and use their hotels, they size themselves in deciding where to go. If you have a relatively small industry, they can pick a moderate-sized city and they can have their convention there, and they don’t outstrip the supply of rooms. If you have a very big industry and you’re having a convention, you know, you have to go to some place like Vegas or some place that has a lot of rooms because otherwise you do throw the supply-demand out of whack. So, if you have an event, which isn’t sized by the people that are scheduling it, can’t be sized by the people that are scheduling it, then you can totally outstrip rational supply of rooms. I mean, you know, the great case would be something like the Masters tournament.

I mean, Augusta can’t size its hotel industry to Augusta, to the Masters, and the Masters isn’t going move any place. Well, there — are certain events like that, but there aren’t very many. And Omaha cannot size its hotel supply to the Berkshire meeting. It sizes it to the kind of conventions it normally gets and all of that, but the Berkshire meeting has grown beyond what we anticipated. So fortunately, there’s developed — and for that reason people started putting in — what really bothered me were the three-day minimums. I mean, it — you know, I think there’s something particularly irritating about somebody’s coming in for a one-day event to have to buy — have a three-day minimum. And the prices were getting high. Incidentally, the Omaha Hilton right across the street, they — they’ve been magnificent throughout this, as have many others. But there were a few that were really pushing things, and we didn’t want to cut down on the demand. We didn’t want to move to Dallas, even though we’re opening a store there next year, it would be kind of fun for that.

But we’re not going move to Dal — I mean, we want — Omaha people love this event, it’s an economic boon for Omaha, but — and people get a good impression of Omaha when they come here, generally. So it’s — there’s a lot of good things about having the meeting in Omaha, and we can’t expect anybody to build new hotels to take care of three days a year. So, fortunately, something like Airbnb is sort of a flex supply arrangement that seems to me to make a lot of sense for it. And I think that it will be more developed by next year, and I think that the hotels will do extremely well next year. But I don’t think they can push it to the ultimate extreme of a total scarcity product. And we want them to do well, and that’s why we’ve gone where we have. Charlie?

CHARLIE MUNGER: Nothing to add.

WARREN BUFFETT: Jay?

JAY GELB: This question is on GEICO. GEICO continues to gain the most market share of the large auto insurers while delivering attractive margins. It also has the largest advertising budget of the auto insurers while maintaining the advantage of being a low-cost operator. My question is, will GEICO, with 10 percent market share currently in auto insurance, eventually overtake State Farm, which currently has 19 percent market share in auto insurance, keeping in mind that State Farm is also a major writer of homeowners insurance coverage?

WARREN BUFFETT: Yep. Well, that’s a good question. Nobody knows the answer to that for sure. But I will tell you this, we passed Allstate this year. And State Farm is a terrific company, I mean, it’s one of the great histories — has one of the great company histories in America. It was started by a farmer who had no insurance experience to speak of when he was, I think, in his early 40s. There’s a book called “The Farmer from Merna,” I think it is, over in Illinois, and you know, he built this incredible business based on a better business model. And that was done around 1920 or so, I believe. And then, of course, GEICO came out with an even better model, but State Farm was huge by that time. Allstate was very, very large. And it’s taken us since 1936 to become number two. Now, I have some projections that if I live to be 100, that we should be number one. And I tell GEICO, I’m going do my part. So the rest is up to them.

(Laughter) We will gain share, in my view. We will gain share month after month, year after year, as long as we never forget that our job is to take extremely good care of the customer, and as long as we can properly rate risks. We’ve got some basic advantages that will enable us to do that as long as we take care of those two matters. And Tony Nicely has done a job that belongs in, you know, world’s hall of fame, in terms of achieving that objective. The 15 years prior to Tony coming — taking over — roughly 15 years, maybe 14 years — the market share had hovered around 2 percent. And you know, maybe two-one or two-two. And you know, since he took over in 1993, it’s gone to ten-plus and it will keep going. But State Farm has got a net worth of probably 70 billion now or there abouts, 60 to 70 billion, and they’ve got a strong presence in homeowners and they’ve got a strong agency force. They’ve got a lot of satisfied customers. So it won’t come fast, but I do think it will come. Charlie?

CHARLIE MUNGER: Well, GEICO to me is very much like Costco. And one of the reasons it’s succeeded is that they really feel a holy duty to have a wonderful product at a very low price. A lot of people talk that game, but very few have it just right down under the body and soul of the company. But GEICO does, and companies like that do tend to grind ahead over time.

WARREN BUFFETT: One thing you’ll find about it, I think this is true about Costco, too, it’s certainly true about GEICO, is that people don’t come and go from there as they — I mean, we have practically no one from the rest of the insurance industry that’s come over to GEICO, and they don’t leave us. I mean, they really have their own idea about how it should be done, what should be done right. And it becomes very, very reinforced. And, of course, it becomes reinforced by success. Is that true at Costco, Charlie?

CHARLIE MUNGER: Oh, Costco’s unbelievable. And it reminds me very much of GEICO, and I’m not surprised that both companies keep taking share. It’s easy to talk the game, but living the game is something else. I mean, it’s against the human nature of many entrepreneurial people to try and get the price down and the service quality up all the time. I mean, it’s like wearing the ultimate hair shirt and yet it works.

WARREN BUFFETT: OK, station 3.

AUDIENCE MEMBER: Mr. Buffett, my name is Neil Patel from Chicago. I greatly admire the way you have lived a frugal personal life even with your considerable wealth. How do you think your frugality has helped Berkshire shareholders over the years? And Charlie, are there any instances where you think that Warren’s frugality has hurt Berkshire and shareholders?

WARREN BUFFETT: Well, first of all, let’s ask who is the more frugal between us. Charlie, who do you think — (Laughs)

CHARLIE MUNGER: Well, in personal consumption, Warren is more frugal. (Laughter)

WARREN BUFFETT: Would you care to give an example? (Laughs)

CHARLIE MUNGER: Warren lives in the same house he bought for a very modest price, what, in 1950-something?

WARREN BUFFETT: I bought in 1958, and you moved into yours about 1960, didn’t you?

CHARLIE MUNGER: Yeah, and I paid more. (Laughter)

WARREN BUFFETT: But he designed his own —

CHARLIE MUNGER: Absolutely, I could get —

WARREN BUFFETT: — he designed his own house.

CHARLIE MUNGER: — he’s more frugal.

WARREN BUFFETT: He did not pay an architect, right?

CHARLIE MUNGER: I did, I paid an architect $1,900. It was as much as 30 percent of the normal price.

WARREN BUFFETT: Yeah. Notice how he remembers the details. (Laughter) No, I would — I have everything in life I want. It’s a very simple thing. If there’s anything that money can buy — there are things money can’t buy, but if there’s anything money could buy that I wanted, I’d do it this afternoon. I wouldn’t have any problem with that at all. I do not think that standard of living equates with cost of living beyond a certain point. I mean, up to a certain point there’s no question that it does in — in terms of having good housing, good health, good health service, good food, everything. But — good transportation. But there’s a point I think, if anything, you start getting inverse correlation. My life would not be happier, and it’d be worse, if I had six or eight houses or, you know, a whole bunch of different things I could have. It just doesn’t correlate. And so I — having everything I have, I mean, you can’t have more than that.

And that doesn’t really make any — it makes a difference up to a point. I mean, you could start thinking a lot differently when you got to X, but when you get to ten-X, or a 100-X, or 1,000-X, it just doesn’t make any possible difference. Charlie, can you —?

CHARLIE MUNGER: The frugality, basically, has helped Berkshire. And I look out at this audience and I see a bunch of understated, frugal people, too. We collect you people. (Laughter)

WARREN BUFFETT: But forget about it this weekend. (Laughter and applause) The more you buy the more you save at these prices, folks. (Laughter)

WARREN BUFFETT: OK. Andrew.

ANDREW ROSS SORKIN: This question comes from Azhar Quader who’s in the audience, Queens Court Capital, wants you to know that he’s a Columbia B School grad just like you, Warren.

WARREN BUFFETT: Good.

ANDREW ROSS SORKIN: The question is the following, “Berkshire paid $8.9 billion in taxes in 2013. Pfizer is currently contemplating an acquisition that would allow it to move its technical holding company overseas and thereby save income tax expense and create shareholder value. Is this something you and Charlie would ever consider if it would create value for Berkshire shareholders?”

WARREN BUFFETT: I think the answer to that is no. What do you say, Charlie? (Applause)

CHARLIE MUNGER: I think it would be — I think it would be crazy to be as prosperous as Berkshire and get our tax to zero while we remain this prosperous. That would not be a legitimate ideal. (Applause)

WARREN BUFFETT: Yeah. We could not have done Berkshire in any other country except the United States, either. You know, and just look at what we’ve acquired and everything. America has, in a very, very, very big way helped Charlie and I become very, very, very rich. (Laughs). Charlie?

CHARLIE MUNGER: I’ve got no complaints. And I look around at this group, I see you at breakfast, it’s a very happy group of people. I don’t think a lot of people are gnashing their teeth that somebody else has a little more.

WARREN BUFFETT: But we don’t pay — I don’t want to make it holier than thou, this stuff. We don’t pay anything beyond that — when we get all through figuring out tax on our 20,000 pageplus return, we just don’t — we don’t add a tip of 20 percent or 15 percent or anything. (Laughter) And we do certain transactions which are tax driven. We’re in low-income housing tax credits, which actually George Bush 41 congratulated me for. So it’s bipartisan. We — the wind energy deals we do, the solar deals we do, they are tax driven to — I mean, they won’t make economic sense otherwise. So we follow the rules. But we don’t begrudge the taxes we pay. We’ve earned a lot of money while paying U.S. taxes. (Applause)

WARREN BUFFETT: OK, Gregg.

GREGG WARREN: Warren, Burlington Northern’s main competitor in the west, Union Pacific, generates around 10 percent of its revenue from freight moving to and from Mexico. It also owns a 20 percent stake in the large Mexican railroad, Ferromex. Given the expectation for strong auto production growth in Mexico with 30 percent more capacity coming online in the next two years, and the potential for additional near-sourcing manufacturing in Mexico, how attractive do you find the Mexican freight market? And assuming that the answer to that question is positive, would it not be a greater benefit to Burlington Northern to own the smallest Class-I railroad at Kansas City Southern, which generates about half its revenue from its Mexican concession, whether than just receiving cargo from the firm?

WARREN BUFFETT: Yeah, Union Pacific has a big edge in terms of Mexico. I mean, their route structure is such, I think they cross the border at six different places. Their route structure is far better than ours in relation to Mexico. And Kansas — it’s true as you say, that Kansas City Southern has a very significant presence in Mexico. But, in terms of what we can do with our money and what we see as the prospects — there are good prospects there, but there are good prospects elsewhere for traffic, too. So it doesn’t make sense for us. But, you know, maybe someday something will, but — the math does not work for Mexico. But we’re continuously thinking about Mexico, but we’re thinking about lots of other markets, too. There are lots of possibilities for moving more freight on the BNSF over the years. And we won’t forget about Mexico, but we won’t do anything silly, either. Charlie?

CHARLIE MUNGER: I don’t have anything to say. You know, it’s awfully easy to imagine combinations that just make you rich with sleight of hand. And, of course, the easiest transaction is buying a competitor. But most of that stuff, when you get to a certain size, you can’t do. So why spend time even thinking about it? I’m afraid Burlington Northern is going have to get ahead on its own from here on.

WARREN BUFFETT: Wouldn’t worry about that.

CHARLIE MUNGER: I’m not worried about it.

WARREN BUFFETT: Station 4.

AUDIENCE MEMBER: Hi, Warren and Charlie. Dan Hua from Los Angeles. My wife, Cora, and I are thrilled to be here.

WARREN BUFFETT: We’re delighted to have you.

AUDIENCE MEMBER: Thank you. You earlier today discussed intrinsic value, and I’m a big fan of Graham and Fisher, especially “Security Analysis.” What differences do you have, if any, for calculating intrinsic value, versus what was said in “Security Analysis?” And for examples, how does management factor into that? You recently mentioned evaluating management is like dating, and recently you said, also, management does matter. My second part is, which company do you fear the most? Why is it that no one else has done what you have done? I mean, Coca-Cola has their Pepsi. Thank you.

WARREN BUFFETT: Yeah, the — actually Graham didn’t get too specific about intrinsic value in terms of precise calculations. But intrinsic value has come to be equated with, and I think quite properly, with what you might call private business value. Now, I’m not sure who was the first one that came up with it, but — well, the first one that came up with it was Aesop, actually. But the intrinsic value of any business, if you could foresee the future perfectly, is the present value of all cash that will be ever distributed for that business between now and judgment day. And we’re not perfect at estimating that, obviously. (Laughs) But that’s what an investment or a business is all about. You put money in and you take money out. Aesop said, “A bird in the hand is worth two in the bush.” Now, he said that around 600 B.C. or something like that, but that hasn’t been improved on very much by the business professors now. Now the question is, you know, how sure are you that there are two in the bush, you know?

How far away is the bush? There are all kinds of things. What are interest rates? But I mean, Aesop wanted to leave us something to play with over the next couple thousand years, so he didn’t spell the whole thing out. But that’s what intrinsic value essentially is. And, we don’t — Graham would say that, Phil Fisher would say that. Phil Fisher would say that in calculating that, he would want to look a lot harder at the qualitative factors of the business in making that estimate of how many birds were in the bush. Graham would say he would want to see the bush — you know, $2 worth of cash in the bush, you know, and to pay a dollar for it now. One emphasized quantitative factors and one emphasized qualitative factors, but neither one would have disagreed with the math. And I started out very influenced by Graham, so I emphasized quantitative factors. Charlie came along and said I was all wrong, and that he’d learned more in law than I’d learned in financial studies and everything, and that I should think more about qualitative factors, and he was right. And Phil Fisher said the same thing.

But that’s what intrinsic value is about, you know. if you buy a McDonald’s franchise, if you buy General Motors, whatever it may be, the real question is, A) are you going to have to put more cash into after you buy it? But it’s really cash in, cash out? When? What discount rate? All the standard stuff. In terms of — if I had a silver bullet, what company would I shoot as being a threat to us? I don’t really — I don’t see any competitor to Berkshire. I see private equity buying lots of businesses and having an advantage in that they’ll leverage up when we won’t, and also that presently they can borrow money very cheap and all of that. So I mean, there are always going to be people competing with us to buy businesses. But —

2014年年度会议

第五部分/第六部分

观众提问：我的问题是——尽管这样，我的问题是，您是否认为一场金融危机将会——因为大规模追究刑事犯罪活动而出现？或者说我们是否已经达到一个新的阶段，华尔街的犯罪行为正在被制度化，某种程度上被允许发生，因为它们大到不能倒、大到不能坐牢、大到不能被监管、大到不需要遵守法律？

沃伦·巴菲特：查理，你是律师，你来回答。（掌声）

查理·芒格：嗯，我认为，由于我们刚刚经历的创伤，华尔街的行为已经得到了巨大的改善。所以我认为最糟糕的时期已经过去了。但是，当一群人生活在轻松赚钱的迷雾中时，你永远不可能有完美的行为。这在某种程度上总是会发生的，而且——

沃伦·巴菲特：你对于起诉个人与起诉公司有什么看法？

查理·芒格：嗯，我认为几乎没有比起诉个人更能改变行为了。当他们把童子军领袖从匹兹堡或其他什么地方抓出来，因为操纵钢铁价格而送进联邦监狱时，这确实改变了美国商人的行为。所以我确实认为，少数几起刑事诉讼能极大地改变行为。在我看来，我们会有那么几起。

沃伦·巴菲特：是的。我可能有点受所罗门公司经历的偏见影响，但我更倾向于起诉个人而不是公司。你知道，我亲眼看到，就一两个人的不良行为，或者可能多人的不良行为，再加上另外一两个人的报告疏忽，差一点——当然会扰乱、伤害，甚至可能摧毁，你知道，可能成千上万其他人的生命，更不用说财务投资了。在我看来，而且——我有过几次这样的经历，在我所见过的——这真的——可能很容易——起诉公司要容易得多。公司会开支票，你知道，我的意思是，那是别人的钱。而检察官知道，如果他针对公司，他基本上会赢，而针对个人，工作要艰难得多。

公司会屈服，他们的算计就是这样，如果可以用支票解决问题，那就没必要抗争；而个人则是在为免于入狱而战。所以检察官如果起诉公司，案子就简单，或者说相对简单，而且很可能是一个能上头条的案子。而针对个人，则是一种需要慢慢磨的案子，他很可能输掉，而且确实需要做大量工作。但是——我仍然非常倾向于——针对个人。而且——

查理·芒格：我也是。这就是我所说的意思，当反垄断违规行为被视为可原谅的过错、轻微的罪过时，我们有很多这种案例，而且现在仍然有一些，因为我们会对个人提起刑事诉讼。但是通过个人起诉，我们确实改变了操纵价格的行为，而在金融领域，我们还没有多少这样的起诉。我们可能还需要更多。你不同意吗？

沃伦·巴菲特：是的，绝对，绝对。而且我要告诉你：伯克希尔有超过30万人。现在肯定有人在干坏事，我的意思是，你知道，你不可能有一个30万人的城市而没有人行为不端。这就是——这是一件事——我不担心我们赚钱，我们会想办法做到。可能比我们希望的好或差。但绝不会是灾难，永远不会。灾难是，如果有人做了错事，你知道，实际上给整个组织带来了坏名声。我知道这在某种程度上超出了我的控制。我可以告诉经理们，他们可以告诉为他们工作的人，声誉比什么都重要。这会产生影响，我认为这比给他们一本200页的手册更有影响。但这不能解决所有问题。

我们希望的是，当有问题时，我们能尽早发现，然后由我们来处理。但我们总会遇到某种问题，在某个时候，因为，你知道，30万人不可能每天都行为端正。这是不可能的。但是个人起诉，我在年报里也写过一点——改变行为的方法是让那些可能做错事的人害怕，害怕某种方式会让事情报应到自己头上，并遭受重创。如果唯一的恐惧是公司要开出一张大支票，那么行为改变的程度就会远远小于惩罚落到个人头上。贝基？（掌声）

20. 重大铁路事故对BNSF和伯克希尔的影响

贝基·奎克：这个问题来自俄克拉荷马州塔尔萨的马克·布莱克利。他说，过去一年发生了一系列铁路事故。今年1月，《华尔街日报》发表了一篇文章，强调了缺乏保险来覆盖最坏情况的事故。“BNSF的马特·罗斯先生被提及，他希望建立一个由铁路公司出资的保险基金，以在发生事故时保护整个行业，类似于核电站目前设立的一种基金，但这个想法没有获得任何进展。“最坏情况的事故将如何影响BNSF和伯克希尔·哈撒韦？如果整个行业对此类事件缺乏保险，公司如何保护自己？如果发生重大事故，伯克希尔会面临什么风险？”

沃伦·巴菲特：是的，嗯，我们在这件事上处于两端，因为阿吉特已经向所有主要铁路公司提供了非常高的保额。但他们大概不喜欢他的价格。我要说的是，这四大主要铁路公司确实有财务能力来支付，如果真发生了非常可怕的事情，他们能支付巨额赔偿。最——你知道，我不知道哪个最危险——它们运输所谓的危险材料，而铁路必须运输它们。你是公共承运人，你被迫运输它们。铁路公司真的宁愿不运输它们，但它们确实运输了，它们不得不。而且它们可能永远无法从每车皮的运输费中获得足够的补偿来真正覆盖所涉及的风险。但是四大主要铁路公司，当然有能力——这可能对它们造成非常非常重大的财务打击，但我认为，如果真发生了什么极其严重的事情，它们确实有财务能力来处理那种规模的赔偿。

如果它们觉得没有，它们可以从阿吉特那里买保险，但到目前为止我们还没卖出去。这些公司有保险，但它们不喜欢——它们不会谈论它们的保额或类似的事情，因为那有时会成为一个蜜罐，公开讨论你的保险限额是不明智的。但我想——确实如提问者提到的，核风险——政府认为太大了，就像他们对恐怖主义那样——决定它太大，私人工业无法承担。我不认为任何可以想象的事故——你可能能编造出一个——但任何可以想象的铁路事故的后果，会超出主要铁路公司的支付能力。但这可能非常非常大，相对于它们的净资产和当前的收益。查理？

查理·芒格：是的，对每个人来说，最大的意外当然是英国石油公司。

沃伦·巴菲特：是的。

查理·芒格：没有人做梦也想不到，一家大型石油公司，因为一口井的事故，会遭受几百亿美元的损失。当然，这引起了很大的关注。我不知道沃伦怎么想，但那件事发生后，我对在墨西哥湾钻探的热情降低了。损失与任何东西相比都太大了。

沃伦·巴菲特：而且还有收益，可能的收益。

查理·芒格：收益——可能的收益。他们钻探的那个油田确实很大，但这远远不够支付这次事故的费用。所以——但是——马特会知道，铁路史上最大的事故，它花了2亿美元吗？马特在吗？

沃伦·巴菲特：我不认为——我不认为诺福克南方公司曾经公布过那次事故的成本。但我可以告诉你，我们运输氯气或氨气之类的东西，得到的报酬不够。我的意思是，只是——你知道，为了购买适当的保险来覆盖这类产品，相对于收入，我认为这永远不合理。但是我们有义务——它们无论如何都要从一个地方运到另一个地方，要么用卡车，要么用某种方式。而我们是公共承运人。但这不是——从财务角度来看，这不会让我夜不能寐。大的风险是某种非常有效的恐怖主义，或者一个流氓国家在核、化学、生物或网络方面的行动。而且，你知道，战争行为在保险单中被排除在外。但是可能会有某种恐怖主义行为造成损害，至于它们是否在保险合同下负有责任，那是另一回事，但可能造成我们从未见过的损害。

而且，你知道，在未来50年内的某个时候，这种情况发生的概率显然是合理的，具体概率我不知道。但这不是微不足道的。查理？

查理·芒格：嗯，我们刚刚看到一名飞行员在马来西亚飞机上能做些什么。我认为，我们生活在一个总会有大事件发生的世界里，在某种程度上，我认为我们很幸运，有一些大公司可以制定周密的安保计划，并在损失发生时能够处理。我不认为如果我们有很多小公司在飞机周围乱转，情况会更好。

21. 现在扩大商业财产意外险是否太晚？

沃伦·巴菲特：杰伊？

杰伊·盖尔布：——问题是关于伯克希尔的主要商业财产意外险业务。伯克希尔计划大幅扩展伯克希尔·哈撒韦专业保险部门，并且还通过一个由怡安安排的业务设施，成为了劳合社的主要承保人。为什么伯克希尔在定价已经见顶的情况下，还要增加在商业财产意外险领域的存在？

沃伦·巴菲特：我们——第一个更重要。我们在去年年中进入了商业保险领域，当时有一些很棒的人才想加入我们。我们拥有大量的资本，非常好的声誉，并且我们认为我们有能力比大多数公司更明智地承保，保留比任何人都高的自留额，并且以显著低于平均水平的成本运营。所以，如果你把这些因素结合起来，再加上阿吉特·贾恩监督运营，我认为这是一个绝佳的机会。而且我认为你会——我们进入的时间无关紧要。我的意思是，我们进入是因为我们有了一些非常优秀的人才。这是我们选择时机的理由。而且我们将——我们已经显著扩大了那个团队。彼得·伊斯特伍德负责运营，我认为随着时间的推移，我们将建立一个非常非常重要的商业保险业务。而且我相信，这个业务的承保结果将比绝大多数竞争对手都要好。查理？

查理·芒格：嗯，我认为我们做这件事非常合乎逻辑。当然，当某件事合乎逻辑时，我们不会因为觉得商业周期可能稍微好一点而退缩。这是一个长期布局。

沃伦·巴菲特：是的。

查理·芒格：我们不会因为短期的小麻烦而退缩。

沃伦·巴菲特：不，这是一个永久的布局。而且——当我们看到有机会进入我们喜欢的业务，基本上拥有杰出的人才和一些非常根本的竞争优势时，我们会参与游戏，而且我们会全力以赴。

22. 购买一支运动队或体育用品公司？

沃伦·巴菲特：6号台？

观众提问：我的名字是埃德·博伊尔（音），来自芝加哥。我的问题是问沃伦和查理的。你们是否有任何计划，或者是否有兴趣，购买一支职业运动队——（笑声）——或者体育用品制造公司，因为我们现在处于一个体育全球化的世界？还是这超出了伯克希尔的游戏范围？

查理·芒格：沃伦已经做过了。

沃伦·巴菲特：我拥有一支小联盟球队的四分之一股份，但这不能解释我在福布斯400榜单上的位置。（笑声）关于你买运动队的问题，答案是否定的。事实上，如果——查理和我——如果你读到我们中任何一个人在买运动队，那可能是时候谈论继任者了。（笑声）我们是——我们确实——体育用品通常不是一个很好的生意，尽管，你知道，耐克显然在其整体运营中做得非常出色。但是——我们拥有斯伯丁。我们拥有罗素。而且你知道，斯伯丁已经存在了很长很长时间。A.G.斯伯丁，我忘了他是他妈的什么时候——我想他是在试图将棒球推向世界其他地方，大概是在，我不知道，19世纪80年代左右。但是——总的来说，如果你看看那些制造高尔夫球具、橄榄球、特别是头盔、棒球手套、棒球的人，这并不是一个特别有利可图的生意。

而且它的某些方面，比如头盔，你知道——伯克希尔最不应该做的事情就是拥有一家头盔公司。一家头盔公司应该由一个欠着大约一百万美元并且身无分文的人拥有，因为，你知道，他不会成为目标。而我们会是最终的目标。这就是原因——我们曾经参与过平克顿，但是我们对——我们曾有机会买下整个公司，而拥有一个在机场提供保安的公司的想法，你知道，一旦出了任何问题，你会说那是保安的错。而这里有一个超级富有的公司，是一个完美的目标。我的意思是，机场的保安公司，同样应该由一个净资产达不到两位数的人拥有。（笑声）所以，你不会在体育领域看到我们太多。但是这里的查理，你是在看快船队还是……？（笑声）现在我开始担心他看了。不——（笑声）

查理·芒格：不管沃伦对拥有运动队怎么看，我比他更不喜欢。（笑声）

23. 保密、比尔·阿克曼和积极投资者

沃伦·巴菲特：好的。安德鲁。

安德鲁·罗斯·索尔金：好的，沃伦。你长期以来一直倡导透明度，并且不赞成绿票讹诈者。比尔·阿克曼将他暗中积累艾尔建股份、领先于威朗制药收购要约的做法，与你80年代购买可口可乐相提并论。这正确吗？从市场的政策角度看，你如何看待阿克曼使用的秘密策略？同样重要的是，你如何看待企业界日益增长的积极主义大趋势？

沃伦·巴菲特：我没有听说过关于可口可乐的那种说法。我真的不确定那是怎么来的。我的意思是，我们在公开市场买入股票，我们从未使用过衍生品交易或任何方式购买，或任何其他东西。我的意思是，我们当然也还没有收购它。所以——我不确定——你能详细说明一下吗，安德鲁？

安德鲁·罗斯·索尔金：我没有更多关于——的

沃伦·巴菲特：哦，是的。

安德鲁·罗斯·索尔金：——问题。我相信比尔·阿克曼有一次在电视上，评论说他使用他的股份，或者更确切地说，购买股份，他是秘密进行的，我想他可能是在暗示，我不知道，也许我会调整一下问题。过去有一些时候，你购买过其他公司的股份，并通过美国证券交易委员会的特定规则来获得一些回旋余地而不必披露。也许，这会调整问题吗？

沃伦·巴菲特：这——

安德鲁·罗斯·索尔金：或者你可以直接回答关于积极主义的问题。

沃伦·巴菲特：是的，再告诉我一遍关于积极主义的问题，因为我们从未使用过衍生品或任何可以规避报告规则的东西，我的意思是，就这么简单。但是第二部分是什么？

安德鲁·罗斯·索尔金：我认为第二部分是，鉴于积极主义如今在新闻中如此频繁出现，你如何看待企业界这种更大的趋势？

沃伦·巴菲特：嗯，我认为它不会消失，而且我认为它吓坏了很多管理者。（笑）有些情况——当然是有些情况应该更换公司管理层。我的意思是，你不可能有成千上万的公司而不存在这种情况。我认为，总的来说，你知道，积极投资者，如果他们以某种方式把股价推高，你知道，那就会结束他们对这门生意的兴趣，所以我不认为他们在寻找——他们通常不是在寻找企业永久性的改善。他们是在寻找一个特定的、会导致价格巨大变动的事件。而且——他们当然吸引了越来越多的钱。换句话说，流入积极主义对冲基金等的资金是——肯定是成倍增长，而且这意味着他们可以在更大规模上玩这个游戏。华尔街任何看起来成功的事情都会产生资金流，你知道，这种资金流会持续下去，直到它不再成功为止。

查理？

查理·芒格：嗯，你说得对，积极主义在公司管理层中引起的骚动比多年来任何其他事情都要大。几乎没有人觉得自己是免疫的。当一个积极投资者进入一家公司时，20%或30%的股票可以相当迅速地易手，看起来根深蒂固的管理层突然受到威胁。当然，这种事情会引起很多痛苦。另一方面，积极投资者，总的来说，赚了相当多的钱。当然，在我们所处的文化中，大多数人不在乎钱是怎么赚的，他们只在乎自己能不能赚到。所以，这就像——我不知道，杰克的豆茎一样疯长。所以我认为这会产生非常显著的影响。而且有些东西——你会发现一个积极投资者，他不是你想联姻的那种人，去攻击一家你永远不会买入的公司。当这种情况发生时，让我想起奥斯卡·王尔德对猎狐的定义。他说：“那些说不出口的人去追逐那些无法下口的东西。”

（笑声）我认为我们看到了一些这种情况。我不认为这对美国有好处，正在发生的事情——

沃伦·巴菲特：你认为——

查理·芒格：——平均而言。

沃伦·巴菲特：你认为三年后会怎么样？

查理·芒格：更大。

沃伦·巴菲特：哇。

查理·芒格：嗯，有什么能阻止它呢？

沃伦·巴菲特：是的。如果三年后它更大，那它会大很多。我的意思是，数字的复利效应。

查理·芒格：这是非常严重的。

24. 与其等待“大象”，不如购买较小的公司？

沃伦·巴菲特：好的。格雷格。（笑声）

格雷格·沃伦：如果伯克希尔的规模预计会成为一个持续的增长约束，那么公司更有意义的是瞄准一批数量更多、增长更快并能更长时间保持增长的小公司，而不是试图捕获一头很可能已经成熟的大象，这会使公司更长时间地持有高于正常水平的现金余额，即使这意味着为增长支付更高的价格？如果答案是否定的，那么伯克希尔股东为在手持有大量过剩现金直到合适交易出现而付出的机会成本是什么？

沃伦·巴菲特：嗯，对第一个问题的回答是，一个并不排斥另一个。你知道，我们很乐意花20或30亿美元买下我们觉得随着时间的推移会做得非常好的公司。但这同样适用于花200或300亿美元的情况。现在，如果降到花一两亿美元买一家公司，那可能适合我们某个了解该业务的子公司去做。但是——我们没有放过任何规模上能对伯克希尔产生真正影响的东西。就像我说的，我们的子公司去年做了25笔补强收购，它们会继续做更多。它们会看到适合它们的东西。但是，你知道，一笔300亿美元的交易相当于十笔30亿美元的交易，或者一百笔3亿美元的交易。所以，就我们如何在伯克希尔内部构建更多盈利能力（这正是我们努力做的）的现实而言，我们的主要重点应该放在更大的交易上。查理？

查理·芒格：嗯，我同意。购买成百上千的小企业的想法——

沃伦·巴菲特：一文不值。

查理·芒格：——如果不是作为我们已有业务的补充，那是令人憎恶的。

沃伦·巴菲特：是的，小交易有很多竞争。我的意思是，私募股权正在追逐各种小交易。事实上，它们在某种程度上只是在互相倒手。当我们看到它们在做什么时，我们一点也不羡慕。但这并不意味着我们不能偶尔找到一家合适的小企业，并且它会做得很好。但这不会是伯克希尔的未来。但我想强调，一个并不排斥另一个。

25. 你被问过的最聪明的问题？

沃伦·巴菲特：7号台。

观众提问：威利·拉尔森（音），来自旧金山。你们都经常与全国最聪明的投资者交流，这是我没有机会做的。所以我的问题是，你们最近被问到的关于投资的最聪明的问题是什么，以及你们对那个问题的答案是什么？（笑声）

沃伦·巴菲特：查理，你可以先回答这个问题，我考虑一下。

查理·芒格：嗯，我已经回答过了，当我回答那位年轻先生时，他说他无法理解为什么沃伦把伯克希尔的——或者伯克希尔的账面价值增长与股市指数表现相比较。换句话说，有很多有趣的问题没有得到太多关注，其中存在着很多非理性。

沃伦·巴菲特：你问的问题，我经常从来找我的大学生那里听到。他们说，“过去你被问过的最聪明的问题是什么？”而我从来没有想出一个好的答案，今天我也想不出来——

查理·芒格：我不喜欢这个问题，你呢？

沃伦·巴菲特：不。（笑声）这就是为什么我们改了——

查理·芒格：我认为这不太公平。

沃伦·巴菲特：这就是为什么我让你先回答。（笑声）

查理·芒格：是的。

26. 中美能源资产回报率

沃伦·巴菲特：好的，现在我们达到了54个问题。所以现在我们开始按顺序轮流到各个提问台。每位记者各提了六个问题，所以我们要去8号台。

观众提问：菲利普·凯斯，新罕布什尔州曼彻斯特。我的问题涉及中美能源板块。在我们年报的第64页，您为我们提供了每个业务的板块数据。对于中美能源板块，当我取息税前利润，加上折旧费用，再减去资本支出，结果是负的经营现金流。当我为过去五年每一年重复这个计算时，在其最好的一年，该板块产生了3.08亿美元的经营现金流。当我除以有形资产时，结果是有形资产回报率为0.86%。为什么我们要把资本分配给一个在其最好一年有形资产回报率还不到1%的业务？

沃伦·巴菲特：你之前说得很好，直到你谈到有形资产回报率。我们——我们喜欢你刚才描述的计算，只要我们能从追加的资本投资中获得回报。我们所在的业务，无论是在爱荷华州的风能项目，还是在收购太平洋公司之后，都有很多资本投资的机会。我们购买了这个能源业务，我们期待着投入更多资本，因为只要我们受到所运营州监管机构的公平对待，我们就能获得适当的回报。而回报不是由现金减去我们正在进行的追加资本投资来衡量的。它是由折旧后的营业收益来衡量的。在我们的业务中，有时可能不需要任何净投资。但实际上我们更喜欢那些——在公用事业业务中——需要净投资的，因为我们喜欢以合理的回报获得更多资本的想法。现在，我们下的赌注是，监管机构将来会公平地对待我们。我们有充分的理由相信，在我们运营的辖区内，情况确实如此。

我们相信这一点的一个原因是，我们在以低于大多数公用事业公司的费率提供电力方面，做得比绝大多数公用事业公司都要好得多。例如，在爱荷华州，我们的情况是，有一家股东所有的竞争性公用事业公司，以及其他一些市政所有的公司，如果你看看我们的费率，它们明显低于竞争对手。事实上，我们的一位董事拥有一个农场，他从两个不同的来源购买，其中一个是我们的。我们的价格比合作机构的要低得多。因此，我们与监管机构打交道时，理所当然地享有良好的声誉。我们显著改善了运营，包括顺便说一句，安全方面，与购买这些公用事业之前存在的状况相比有了巨大的改善。这就是为什么当我们来到新的州时，他们欢迎我们。所以，如果我们能把更多钱投入到这些州的有用项目中，我们就有充分的理由相信我们会获得适当的回报。

但是，如果你计算这些项目产生的净现金流，在一段相当长的时间内，你会看到名义上的或负的数字，因为我们增加了投资，并使这些公用事业对这些州的人们更加有用。我认为我们会获得公平的回报。我们在铁路公司也有类似的情况。但我们非常高兴拥有这两项业务。查理？

查理·芒格：是的，如果你报出的数字来自一家正在衰落的百货公司，我们肯定会讨厌它。但是当它来自一家正在增长的公用事业公司时，我们喜欢它，因为我们非常有信心，再投资的钱会做得非常好。就是这么简单。

沃伦·巴菲特：是的。格雷格——

查理·芒格：这是两种不同的业务。

沃伦·巴菲特：格雷格？格雷格在吗？你可能可以给他提供一些我一时想不起来的数字，关于比较——我们的价格比较如何，并让他更多了解公用事业委员会是如何看待我们以及如何公平对待我们的。

格雷格·阿贝尔：当然。当你查看我们在每个地区的费率时，实际上，我们通常是成本最低的供应商，或者处于最低的四分之一。沃伦，你在爱荷华州的例子是一个很好的例子。我们上一次在那里加价是1998年。我们刚刚在过去一年加了一次，所以这是16年来的第一次。而且我们在可预见的未来看不到另一次加价。当你与我们的监管机构建立这种模式时，显然他们对我们推出的各种项目非常支持。所以在过去一年，我们在爱荷华州启动了一个项目，一个1000兆瓦的项目，耗资19亿美元。如果你回到这位先生的说法，是的，我们将在未来两年内投入这19亿美元，但我们将获得11.5%——11.6%的回报。通常当我们在审视我们的公用事业时，我们确实会关注我们的资本，我们努力使其非常接近我们的折旧额。

这就是我们投入业务的钱。我们甚至会在那部分资本上获得回报，但现实是，我们目前绝大部分资本是增长资本。我们在那上面获得了非常不错的回报。

沃伦·巴菲特：格雷格，你可以评论一下，就一分钟，我想他们会觉得有趣，关于爱荷华州科技公司的情况，仅仅因为我们在电力领域所做的事情。或者不完全是，但部分原因是我们在电力领域所做的事情。

格雷格·阿贝尔：对。所以当你看到科技公司和它们现有的数据中心时，如果你到河对岸，我们在康瑟尔布拉夫斯为谷歌提供服务。他们有一个最初相对较小的数据中心站点。他们考虑将其扩展到40到50兆瓦，这相当于一个小型发电厂的规模。但现实是，他们最终谈论的是将其建设到1000兆瓦。我们在该州一次又一次地看到这种情况重演。这实际上是由于两个原因。第一，我们有这些异常低的费率。第二，正如沃伦早些时候强调和我提到的，我们很大一部分能源来自可再生能源。他们想要那些碳积分，他们希望与一家生产绿色电力的公用事业公司关联起来。

27. 美国和中国教育市场的未来

沃伦·巴菲特：好的。请9号台。（掌声）

观众提问：下午好，巴菲特先生和芒格先生。我叫高凌云，来自中国上海。我专注于教育投资。今天，我和我的同事，一诺教育公司，有一个问题。你们如何看待未来美国和中国教育市场？谢谢。

沃伦·巴菲特：查理？

查理·芒格：嗯，我没听清最后两个词。在什么方面？

沃伦·巴菲特：他想知道我们对美国和中国教育市场的看法，但他没有——

查理·芒格：但是在什么方面？他说的是某些——是医疗吗？

观众提问：未来。

查理·芒格：在未来，我明白了。嗯，我们当然是在一天快结束的时候得到简单的问题。（笑声）

沃伦·巴菲特：是的。是的。（笑声）

查理·芒格：我认为美国——

沃伦·巴菲特：不管他说什么，我都同意。（笑声）

查理·芒格：我认为美国犯了一个巨大的错误，他们允许公立学校，特别是许多大型学校系统，走向地狱。（掌声）我认为亚洲文化不太可能这样做。所以，在亚洲文化避免我们一些错误的程度上，啊，我只希望我们能更像他们。

沃伦·巴菲特：好的。（掌声）

28. 巴菲特关于芒格听力的玩笑

沃伦·巴菲特：我可能不应该告诉你这个。当查理在最后两个词上有点困难时——我有点担心查理，不知道是否应该讨论这个，但是——（笑声）我想也许他的听力在下降，我不想当面跟他说。我的意思是，我们是多年的老朋友了，所以我去了医生那里，我说：“医生，我有这个很棒的合作者，但我想也许他的听力在下降。我想和他谈谈。我的意思是，你怎么对一个你认识了那么久的人说这个？我应该怎么办？”他说：“嗯，你站在房间的另一头，用正常的语调跟他说话，然后告诉我发生了什么。”所以下一次我和查理在一起时，我站在房间的另一头说：“查理，我认为我们应该在35美元的价格买入通用汽车，你同意吗？”毫无反应。我走到房间中间。

我说：“查理，我认为我们应该在35美元的价格买入通用汽车，你同意吗？”没有反应。我走到他身边，在他耳边说：“查理，我认为我们应该在35美元的价格买入通用汽车，你同意吗？”他说：“这是第三次了，我同意。”（笑声和掌声）所以，大声点，大声点。（笑）

29. 住房贷款改革是否必要？

沃伦·巴菲特：10号台。

观众提问：是的，我是来自芝加哥的格伦·格林（音）。首先，我想感谢你们这么多年来如此出色地配置资本，非常感谢。这个问题与住房和住房改革有关，更具体地说，现在华盛顿特区显然有立法在讨论改革政府赞助企业，特别是房利美和房地美。您认为我们需要住房改革吗？一个合理的方法是什么？如果有私人参与者参与，考虑到阿吉特的精算技能和您的资本配置能力，这对伯克希尔有意义吗？

沃伦·巴菲特：嗯，我认为——查理可能不同意我的看法，我认为30年期固定利率抵押贷款对房主来说是一个巨大的福音。作为投资者，它不一定是那么好的工具，但我认为它对房屋所有权起到了巨大作用。可能在某些情况下被滥用了，但总的来说，它为这个国家的房屋所有权做出了巨大的贡献。让人们比原本可能更早拥有住房，并在相当程度上降低了成本。所以我希望——其中政府的担保部分确实降低了成本。没有任何私人组织能做到这一点。我的意思是，房屋抵押贷款是一个大约11万亿美元的市场，私人行业没有保险能力，甚至远没有保险能力来做这项工作，而且费率会高得多。所以我认为应该让政府留在其中。现在的问题是如何让政府留在其中，同时又让政治因素远离？

我们发现了一些问题，不仅房利美和房地美自己做了很多蠢事，而且被政客们怂恿去做其中一些事。我认为可能有一种方法——我20年、30年或——大概30年前写过一篇专栏文章，我想是发表在《华盛顿邮报》上，当时联邦储蓄与贷款保险公司（FSLIC），也就是储蓄和贷款担保机构，基本上正在崩溃，我建议联邦存款保险公司（FDIC）用某种方式让私人部门参与定价和评估风险（在那个案例中是银行的风险），但本质上政府是主要保险人。可能有一种方法——现在正在探索这种方法——这种模式在住房抵押贷款保险方面可以奏效。我不认为我们很可能会成为参与者，因为我认为其他人在设定费率时比我们更乐观。最终，政府必须成为主要的保险人。

可能会出现一种情况，私人部门为其中5%定价，政府承担另外95%，并且甚至在私人投资者破产后，政府反过来也担保私人部门的这5%。但我确实认为，为住房、住房抵押贷款——制定正确的国家政策非常重要。我知道这方面正在进行工作。而且我认为，你知道，伯克希尔·哈撒韦参与其中的可能性非常小。查理，你的想法呢？

查理·芒格：嗯，当私人行业被允许基本上接管整个领域时，我们得到了你能想象的最多的一群小偷和白痴，他们把整个系统搞砸了，并威胁到我们所有人。所以我不太信任这个领域的私人行业。因此，尽管我非常讨厌政客们经常做的事，但我认为现有的制度可能相当稳健。目前，房利美和房地美相当保守，而且它们在做几乎所有的住房贷款。我认为这没问题，我不急于回到投资银行为了追求利益而争相制造虚假证券的局面。

沃伦·巴菲特：是的，我认为——一个问题是，你是否让房利美和房地美就按现状运行下去，我不知道——

查理·芒格：而不是继续做它们正在做的事情。

沃伦·巴菲特：但我想——我认为——当然，导致房利美和房地美误入歧途的事情之一是，它们想服务于两个主人，并以两位数的速度增加收益。为了做到这一点，它们开始进行大规模的投资组合活动。我认为，如果房地美和房利美坚持只做抵押贷款保险，不成为全国最大的对冲基金（因为它们有能力非常便宜、非常长期地借款，因此可以从巨大的投资组合行动中获得合理的、看起来合理的利差），我认为那是导致问题的重大因素——

查理·芒格：嗯，它们实际上变成了私人公司。但它们不再是了，沃伦。它们是——

沃伦·巴菲特：是的。

查理·芒格：——而且它们目前相当保守。

沃伦·巴菲特：但是有人希望它们变回私人公司。

查理·芒格：是的，但我认为那是个错误，因为当它们真正变得糟糕时，是因为私人公司正在接管整个抵押贷款市场，因为不良贷款驱逐了优质贷款。而房利美和房地美为了维持它们的业务量，也加入了向放松、欺诈和愚蠢行为冲刺的行列。所以——

沃伦·巴菲特：你会允许它们有任何投资组合活动吗？

查理·芒格：我看不出有什么必要。

沃伦·巴菲特：是的，我也不。而且我认为这确实让它们陷入了相当大的麻烦。我认为那些是为了维持每股收益游戏而做的。

查理·芒格：不，我认为那个私有化的特定实验是一个彻底的失败。（掌声）

沃伦·巴菲特：好的。11号台，并且——

查理·芒格：而且我们从中赚了10亿美元，如果你还记得的话。

沃伦·巴菲特：嗯，我本来不打算提那件事。（笑声）

30. “有幸”与3G和豪尔赫·保罗·莱曼合作

观众提问：下午好。惠特尼·蒂尔森，来自纽约市的股东。我刚刚开始阅读《梦想远大》这本书，这本最近出版的书是关于你们新的巴西合作伙伴的，我真的很喜欢。他们的业绩记录令人难以置信，作为一个长期持有伯克希尔股票的股东，我很高兴你们与他们合作，并且希望亨氏是你们一起捕获的第一头大象，但肯定不是最后一头。

沃伦·巴菲特：我能打断你一小会儿吗，惠特尼？我很感激你的好意，那本书可以在——（笑声）我早该提到的。这本书是用葡萄牙语写的，去年是巴西的畅销书。但它最近刚刚被翻译，非常非常近期，在书虫书店有售。所以——惠特尼，你可以继续，但我确实想提一下它有售。

查理·芒格：你为什么假设我们所有的股东都不懂葡萄牙语？（笑声）

观众提问：我还要提一下，它只在亚马逊上通过Kindle出售。据我所知，世界上唯一的英文精装本在楼下有售，所以我想这会引起对这本书的抢购。

沃伦·巴菲特：我们会涨价的。（笑声）

观众提问：所以我对此有两个问题。首先，我知道你认识这些先生大概有几十年了，我很想听听你的观察，他们的秘诀是什么？肯定不仅仅是我们在媒体上听说的零基预算。是什么关键因素使他们产生了如此非凡的回报？其次，当我审视你们近年来做的一些最大、最好的交易时，重要的因素似乎是你们长期的个人关系，例如，在亨氏交易中与豪尔赫·保罗·莱曼的关系，或者是你们的品牌。沃伦·巴菲特认可的印章对你们在金融危机期间与高盛或通用电气等公司做的一些交易非常重要。我只是想知道，您认为你们的后辈是否会有同样的机会来做这样精彩的交易？

沃伦·巴菲特：这将成为伯克希尔的品牌。我的意思是，头一两年人们会怀疑，但接替我的人会带来同样的品质，包括开出非常大额支票的能力。但还有其他事情，这将是一个伯克希尔的品牌，可能从我这里开始，但会继续下去。关于我们的巴西朋友，他们非常聪明，非常专注，非常努力和坚定。他们从不满足。正如我之前所说，当你和他们做交易时，你就算和他们达成了交易。他们不会越界，不会过度承诺。他们有很多好的品质。如果你读这本书，我想你可能会学到更多关于使他们成为他们今天这样的品质。但我们非常幸运能与他们合作，我们也非常幸运能与许多加入我们的经理们合作。我们自己也想成为一个好的合作伙伴，因为这能吸引好的合作伙伴。这是伯克希尔应得的声誉。

我的意思是，查理和我尽自己的本分来保持这个声誉，但这需要很多其他人也以某种方式行事，使人们愿意加入他们，使人们愿意信任他们。这将构成伯克希尔品牌的一部分。查理？

查理·芒格：是的，我总是说，得到好配偶的方法是配得上一个。得到好合作伙伴的方法是——

沃伦·巴菲特：你的第二个方法是什么？（笑声）

查理·芒格：——还有另一个——嗯，但是要得到好的合作伙伴，你要配得上一个好的合作伙伴。这是一种陈旧的获得成功的方式。有趣的是，它在现代仍然有效。没有什么能改变，如果你自己行为正确，它运作得有多好真是令人惊讶。（掌声）

沃伦·巴菲特：你对巴西人还有什么进一步的想法吗？

查理·芒格：关于什么？

沃伦·巴菲特：关于豪尔赫·保罗及其同僚的成功，除了我提到的之外？

查理·芒格：嗯，那里——你不能回避这样一个事实，他们非常擅长去除不必要的成本。

沃伦·巴菲特：当然。

查理·芒格：我不认为这在任何方面是不道德或错误的。

沃伦·巴菲特：一点也不。

查理·芒格：我认为去除不必要的成本是对文明的一种贡献。而且我认为应该带着一些——他们怎么称呼它？仁慈，真的。

沃伦·巴菲特：敏感。

查理·芒格：是的，敏感。但我不认为在我们的体系中有很多人为的工作等等是好事。所以——

沃伦·巴菲特：如果是那样的话，我们会喜欢政府，对吧？

查理·芒格：是的，所以，总的来说，我认为他们对我们所有人来说都是一个有趣的榜样。

沃伦·巴菲特：是的，我们在向他们学习。

查理·芒格：每个人都是。

沃伦·巴菲特：好的——

查理·芒格：有些人不太情愿。

31. 我们会在到达那一步时决定如何处理“太多”的现金

沃伦·巴菲特：好的。1号台。

观众提问：嗨，沃伦。嗨，查理。我叫沃尔特·张（音），我来自台湾，专程来参加这次会议。七年前，我给我的第一个儿子取了你的名字，沃伦，所以第二个孩子还没来——

沃伦·巴菲特：他怎么样了——他怎么样了——

观众提问：——所以抱歉——

沃伦·巴菲特：——他——他好吗？

观众提问：他很好。

沃伦·巴菲特：好的。

观众提问：所以他问你好。他总是说“沃伦·水牛”，所以抱歉——（笑声）——抱歉。

沃伦·巴菲特：我被叫过——被叫过更糟的。（笑声）

观众提问：我的问题是问你们两位的。我们祝愿你们身体健康，当你们两位打破B女士工作到103岁的纪录时，那将是20年后。如果沃伦——哦，抱歉，如果伯克希尔打破了这个纪录，并且在未来十年基本翻倍，然后再翻倍，你将拥有1.2万亿美元的市值。你认为伯克希尔到时候会是什么样子，并且你们能更快达到这个目标吗？（笑声）

沃伦·巴菲特：我们可能不得不。你最初的假设可能不成立。我确实计划在明年写关于这个，但毫无疑问，在某个时候，我们将拥有比我们能够明智配置的更多的现金。然后——在业务中——然后问题是我们如何处理多余的现金？那将取决于当时的情况。我的意思是，如果股票能够以对现有股东有意义的、即他们的价值因回购而得到提升的价格被买入，你知道，如果我当时还在，我可能会非常积极地回购股票。但谁知道当时的情况会怎样。谁知道当时的税法会怎样，你知道。我确实知道的是，在未来某个时候，我们将拥有比我们能够明智投资的现金更多的现金。这已经内嵌在我们正在做的事情中了，我希望这不是在不久的将来，而且我认为可能也不会。但这不是一个遥远的地平线。

我的意思是，数字正在变得越来越大，以至于我们将无法明智地配置所有进入的现金流。但那时我们可以配置——可能我们可以非常明智地配置并回购股票。谁知道那时的情况会怎样？我能告诉你的是，无论做什么，都将是为了股东的利益。你知道，这是每一个决定的起点，从这个原则出发。查理？

查理·芒格：成功到未来回报下降的程度并不是一个悲剧。那是成功，那是胜利。

沃伦·巴菲特：嗯，他会以你的名字命名他的下一个孩子。（笑声）好的。

32. 优步、爱彼迎和“颠覆性的”共享经济

沃伦·巴菲特：2号台。

观众提问：下午好。我的名字是迈克尔·桑塔格（音），我来自华盛顿特区。我的问题是关于共享经济的。你预计像优步和爱彼迎这样的公司会对它们的行业产生哪些更大的影响，你认为这种商业模式会持续下去吗？

沃伦·巴菲特：嗯，它们显然是在试图颠覆一些其他业务，而这些业务会以竞争的方式进行反击，它们也可能试图通过立法来回击。你知道，当任何人受到威胁，或者任何业务受到威胁时，它会试图反击。如果你追溯到1921年州立农业保险公司出现的时候，或者是1920年，或者无论什么时候，在保险方面，代理制度是神圣不可侵犯的。它存在了很长时间，大公司都在哈特福德或纽约，它们争夺成为镇上排名第一的代理机构。所以，如果你来到奥马哈，你在旅行者保险或安泰保险，或其他什么公司，你的目标就是争取到那个代理人。而保单持有人实际上没有被考虑到。然后州立农业保险公司出现了，它有了一个更好的捕鼠器，然后GEICO出现，带来了一个更好的捕鼠器。所以，每一个——行业最初——保险公司以多种方式进行反击。

但其中一种方式是，它们试图坚持要求制定各种州法律，规定代理人可以做什么，以及在保险中没有代理人的情况下不能做什么等等。这是标准的。你会看到这一点，最终，更好的捕鼠器通常会赢。但是拥有第二或第三好捕鼠器的人会试图阻止这种情况发生。你提到的那些，我什么都不知道。我的意思是，我知道它们是做什么的，但我不知道它们的具体前景，这就是为什么我们有点远离这类事情，因为我们不知道——我们知道会有变化，但我们不知道谁会赢。我们努力坚持我们知道的赢家所在的业务。我们知道——有能源公司——有铁路。我们的许多业务在未来非常、非常、非常有可能成为赢家，这不意味着它们不涉及一些变化，但它们会成为赢家。

然后还有其他领域，我们无法挑选赢家，所以我们只是坐着观望。我们发现它们有趣，但不会受诱惑。查理？

查理·芒格：嗯，我认为新技术将对很多人产生相当大的颠覆性影响。我认为零售业尤其面临着一些非常重大的威胁。你听到格雷格·阿贝尔谈论爱荷华州的一个巨大的发电厂，只为服务一个谷歌的服务器农场。当你拥有这种规模的世界各地的计算能力时，它正在改变世界。我的意思是，你在谈论——

沃伦·巴菲特：而且速度很快。

查理·芒格：是的，很快。所以——我认为它会伤害很多人，就像过去所有技术投资伤害了很多人一样。我认为伯克希尔，总的来说，处于相当有利的位置。

沃伦·巴菲特：你认为我们在哪里最脆弱？

查理·芒格：嗯，我不认为我想说出它们。

沃伦·巴菲特：好的。（笑）现在你让它们都在猜测了，查理。（笑）

33. 在学校教孩子金融知识？

沃伦·巴菲特：3区。

观众提问：下午好。我的名字是黛安·维兰德（音），我来自佛罗里达州好莱坞。我在公立教育系统工作超过35年了。我的担忧是，我认为我们需要更积极主动地让我们的孩子和青少年做好准备，使其具备金融素养，特别是考虑到我们社会中很多成年人每天面临的严重财务压力。我的问题是，您认为金融素养应该成为我们国家学校课程的标准部分吗？如果是，您认为应该从多早开始，以及您认为一些最重要的学习目标应该是什么？

2014年股东大会

第六部分（共六部分）

沃伦·巴菲特：嗯，当然是越早越好。我的意思是，习惯对每个人的生活都有强大的影响力，尤其是良好的财务习惯。你知道，我经常看到这种情况。我每天都会收到一些人的来信，他们犯了某种财务上的愚蠢错误，但他们自己并不知道那是愚蠢的，因为他们没有接受过这方面的教育。他们的父母没有教过他们。而要从财务无知造成的困境中爬出来，可能会耗费你的余生。所以我非常同情你所说的。我们在这方面做了一些工作。我不知道你是否在展厅里看到过我们的“秘密百万富翁俱乐部”展览。你需要从非常年轻的年纪开始影响人们。查理和我很幸运。我们在家庭中就已经接触到了这些，所以我们在餐桌上就开始学习，在我们还不知道自己在学什么的时候就已经在学了。

这在很多家庭中都会发生，但在很多家庭中也不会发生。当然，你提到了青少年金融素养。还有一个大问题是成年人的金融文盲。除非学校介入，否则想要比父母更聪明或拥有更好的习惯就更难了——或许，你知道，学校是你最好的指望，但这可以通过电视或互联网做很多事情。但拥有良好的财务习惯确实非常重要，我认为任何能在早期通过学校系统做的事情，肯定会得到我的支持。查理？

查理·芒格：嗯，我不确定学校是否有错。我认为主要责任在于父母。我认为最有力的榜样（掌声）是父母的行为，所以如果你——

沃伦·巴菲特：嗯，我同意——最重要的是父母，但不是每个人都能拥有正确的父母。

查理·芒格：是啊。嗯，要纠正那些有错误父母的人是非常困难的。（笑声）

沃伦·巴菲特：嗯，假设你的工作就是纠正那些有错误父母的人。你会怎么做？

查理·芒格：嗯，如果你要长生不老，你会怎么做？这就变得非常不切实际了。（笑声）谁会相信我有能力纠正所有那些有错误父母的人呢？

沃伦·巴菲特：哪怕只是一小部分人呢？（笑声）

查理·芒格：我觉得我连那个都不擅长。我这辈子唯一稍微擅长一点的事情就是拔高天花板。只是——我根本没有这方面的天赋。我并不鄙视它。我认为这是一项崇高的工作。我只是——我不擅长。我觉得你也不怎么样。（笑声）

沃伦·巴菲特：如果这不是公开场合，他的话会更尖锐。（笑声）不过，还是去我们的“秘密百万富翁俱乐部”看看吧。你可能会得到一些启发。

查理·芒格：顺便说一句，这个领域的教育的主要问题可能不在于中小学。而是在大学。主要大学的金融课程中教授了很多愚蠢的内容，甚至经济学系也有很多问题。所以，如果你真想开始改变世界，你不应该认为当它变得高级时，就会好很多。

沃伦·巴菲特：嗯——（掌声）至少有那么20年，我想说，我认为主要大学里给金融专业学生传授的知识的净效用是负面的。我觉得现在可能好一些了，但这是一个——

查理·芒格：想象一下。净效用是负面的。那是（听不清）愚蠢至极。

沃伦·巴菲特：是啊。

查理·芒格：我希望你能用正常的英语。（笑声）

沃伦·巴菲特：我担心你会用什么样的英语。（笑声）我不想怂恿他。这——坦率地说，这对我来说非常有趣，因为这是我理解的东西。看着——我是说那些非常了不起的大学，本质上却在教人们一些非常非常愚蠢的东西。甚至为了在这些学校的院系里获得职位，你都必须信奉这种完全毫无意义的正统学说。而且它越来越强大，然后——现在它正在很大程度上改变。但这可能让我对高等教育的反感超出了合理的程度，因为——你知道，这可能在我熟悉的领域尤其糟糕，但它确实很糟糕。我的语言没问题吧，查理？

查理·芒格：如果你当初学的是物理而不是金融，你可能会更喜欢学术界。（笑声）

沃伦·巴菲特：是啊。嗯，我很高兴我没有学物理。（笑声）

34. “将伯克希尔分拆没有好处”

沃伦·巴菲特：好的。第四部分。

观众提问：巴菲特先生和芒格先生。首先，昨晚的派对很棒。我在那里站了半个小时都没喝到一杯饮料，人太多了。哦，顺便说一下，我是来自安大略省渥太华的张晓竹（音）。我的问题是关于股息和估值这个老生常谈的话题。我认为你们因为这家极其成功的公司的巨大成功而受到了惩罚。它太庞大了，所以没有人知道如何正确评估它，而且你们选择的衡量标准也不公平。每年我都会看到一些老股东，他们正在等待分红，用部分资金来补充退休收入。我认为让他们出售股票本质上是不公平的。我记得你们去年致股东信中的案例研究。你们做了一个案例研究，比较了发放股息和让股东直接出售股票。鉴于股价被严重低估，我认为这非常不公平。所以我想问的是，有没有一种切实可行的方法，可以让你们像每年在年会上报告的那样，将公司拆分成四个逻辑板块，释放一些价值，同时仍然允许你们自由配置资本？

沃伦·巴菲特：我们会损失——我们不会释放价值。如果我们把公司拆分成四家，我们会损失巨大的价值。在资本配置方面有巨大的优势，偶尔在税务方面也有优势。伯克希尔目前的形式比我所能想象的任何其他形式都更有价值，除非我们做一些对整个公司免税的事情，但我们不会那样做，而且那可能无论如何也是不可能的，但即使可能，我们也不会做。但是——我们确实进行了一次投票，现在是时候休会了，几分钟后我们将回来举行年会。但我们确实进行了投票，不幸的是——没有办法只向部分股东而不是其他股东发放股息，尽管如此——有一种方法可以让股东在伯克希尔的美元投资（按基础资产计算）保持甚至更高，同时每年提取部分投资，就像他们在合伙企业中一样，并且在这方面承担相当少的税。我去年写过这个，你也读过。将伯克希尔分拆没有任何好处。那将是一个可怕的错误。查理？

查理·芒格：嗯，总的来说，我认为当股价从100涨到200，而那年你没有得到股息时，你并没有被剥夺什么。

沃伦·巴菲特：是啊。不过，它不会每年都上涨。我是说，它会——

查理·芒格：或者两年，或者不管多久。

沃伦·巴菲特：是啊。我们以45比1的投票结果，让人们——这实际上让我很惊讶。有人说他们更喜欢目前的政策而不是改变它，所以改变将是一个大错误。到此，我们的问答环节结束。大约十分钟后我们会回来，举行年会。谢谢。（掌声）

35. 伯克希尔正式年会

沃伦·巴菲特：好的。请大家就座，我们开始会议。好的。我这里有一份讲稿，我会照着读，以确保一切妥当。现在开会。我是沃伦·巴菲特，公司董事会主席，欢迎大家参加2014年年度股东大会。今天上午，我介绍了在场的伯克希尔·哈撒韦董事。今天和我们在一起的还有德勤会计师事务所的合伙人，我们的审计师。他们可以回答你们可能就他们公司审计伯克希尔账目提出的相关问题。莎伦·赫克是伯克希尔·哈撒韦的秘书。她将为会议过程做书面记录。贝基·阿米克被任命为本次会议的选举监察人。她将证明董事选举和本次会议表决的动议的投票计数。本次会议指定的代理投票人是沃尔特·斯科特和马克·汉伯格。

沃伦·巴菲特：秘书是否有关于伯克希尔已发行、有权投票以及本次会议有代表出席的股份数量的报告？

莎伦·赫克：是的，我有。正如随本次会议通知一起发送给截至2014年3月5日所有登记股东的代理声明中所指出的，已发行857,848股伯克希尔·哈撒韦A类普通股，每股有权对本次会议审议的动议投一票；已发行1,179,267,338股伯克希尔·哈撒韦B类普通股，每股有权对本次会议审议的动议投一万分之一票。其中，通过截至5月1日（周四）晚间返回的代理投票，本次会议有601,494股A类股和682,365,717股B类股获得代表。

沃伦·巴菲特：谢谢。这个数字构成了法定人数，因此我们将直接进行会议。

36. 批准去年会议纪要

沃伦·巴菲特：第一项议程是宣读上次股东大会的会议纪要。我请沃尔特·斯科特先生向会议提出动议。

沃尔特·斯科特：我提议免去宣读上次股东大会会议纪要的程序，并批准该会议纪要。

沃伦·巴菲特：有附议吗？

声音：我附议。

沃伦·巴菲特：该动议已提出并获得附议。有评论或问题吗？我们将以口头表决方式对此动议进行投票。赞成者请说“赞成”。反对者？动议通过。

37. 选举伯克希尔董事

沃伦·巴菲特：下一项议程是选举董事。如果有股东在场但未提交代理投票，或希望撤回先前提交的代理投票，你们可以就董事选举和本次会议将审议的其他事项进行亲自投票。请向过道中的一位会议工作人员表明身份，以便领取选票。我请沃尔特·斯科特先生就董事选举向会议提出动议。

沃尔特·斯科特：我提议选举沃伦·巴菲特、查理·芒格、霍华德·巴菲特、斯蒂芬·伯克、苏珊·德克尔、威廉·盖茨、大卫·戈特斯曼、夏洛特·盖曼、唐·基奥、托马斯·墨菲、罗纳德·奥尔森、沃尔特·斯科特和梅丽尔·威特默为董事。

沃伦·巴菲特：有附议吗？

声音：我附议。

沃伦·巴菲特：已提议并附议选举沃伦·巴菲特、查理·芒格、霍华德·巴菲特、斯蒂芬·伯克、苏珊·德克尔、威廉·盖茨、大卫·戈特斯曼、夏洛特·盖曼、唐·基奥、托马斯·墨菲、罗纳德·奥尔森、沃尔特·斯科特和梅丽尔·威特默为董事。还有其他提名吗？有讨论吗？提名已准备就绪，可以付诸表决。如果有股东进行亲自投票，现在应在董事选举的选票上做标记，并将选票交给过道中的一位会议工作人员。阿米克女士，准备好后请提交报告。

贝基·阿米克：我的报告已准备好。根据截至上周四晚间收到的代理投票，代理投票人的选票为每位被提名人投了不少于660,619票。该数字远超所有已发行A类和B类股份总投票数的多数。特拉华州法律要求的精确投票计数的证明将交给秘书，并与本次会议记录一同存档。

沃伦·巴菲特：谢谢你，阿米克女士。沃伦·巴菲特、查理·芒格、霍华德·巴菲特、斯蒂芬·伯克、苏珊·德克尔、威廉·盖茨、大卫·戈特斯曼、夏洛特·盖曼、唐·基奥、托马斯·墨菲、罗纳德·奥尔森、沃尔特·斯科特和梅丽尔·威特默当选为董事。

38. 关于高管薪酬的咨询性投票

沃伦·巴菲特：议程下一项是关于伯克希尔·哈撒韦高管薪酬的咨询性投票。我请沃尔特·斯科特先生就此项向会议提出动议。

沃尔特·斯科特：我动议公司股东以咨询方式，批准根据S-K条例第402项披露的公司指定高管的薪酬，包括薪酬讨论与分析、随附的薪酬表格以及公司2014年年会代理声明中的相关叙述性讨论。

沃伦·巴菲特：有附议吗？

声音：我附议。

沃伦·巴菲特：已提议并附议公司股东以咨询方式批准支付给公司指定高管的薪酬。有讨论吗？我相信可能有人要发言。有人吗？好的。阿米克女士，准备好后请提交报告。

贝基·阿米克：报告已准备好。根据截至上周四晚间收到的代理投票，代理投票人的选票投票赞成以咨询方式批准支付给公司指定高管的薪酬的票数不少于666,751票。该数字远超所有已发行A类和B类股份总投票数的多数。特拉华州法律要求的精确投票计数的证明将交给秘书，并与本次会议记录一同存档。

沃伦·巴菲特：谢谢你，阿米克女士。以咨询方式批准支付给公司指定高管的薪酬的动议获得通过。议程下一项是关于伯克希尔·哈撒韦高管薪酬的股东咨询投票频率的咨询性投票。我请沃尔特·斯科特先生就此项向会议提出动议。

沃尔特·斯科特：我动议公司股东以咨询方式决定他们就支付给公司指定高管的薪酬进行咨询投票的频率，可以是每年、每两年或每三年，具体如公司2014年年会代理声明所述。

沃伦·巴菲特：有附议吗？

声音：我附议。

沃伦·巴菲特：已提议并附议公司股东决定他们就指定高管薪酬进行咨询投票的频率，选项为每年、每两年或每三年。有讨论吗？我相信这个议题上有人——有人想发言吗？是的。

观众提问：——来自马萨诸塞州波士顿。我建议每年投票一次，以改变指定高管的政策。除了沃伦、查理和马克，公司还应报告阿吉特·贾因的薪酬。他是不可替代的，沃伦在制定保险费率方面与他密切合作。既然——五——管理层应该有五名成员，要么是另一位保险经理，要么是来自资本相关行业集团、BNSF或中美能源的人，也应该加入。你们的企业总部人员如此精简，应该列出集团经理的名字。应该列出两位，但至少应该加上阿吉特。曾经是财富500强公司的CEO们现在会披露他们的薪酬。伯克希尔没有退休年龄，这没问题，但应该增加披露的深度，这应该在下一年完成，而不是三年后。

沃伦·巴菲特：还有其他人吗？——似乎没有了。我个人实际上同意每年一次的频率，通常是这样，但在伯克希尔的案例中，考虑到所需的工作以及相关数字等，可能意义不大。但总的来说，我认为每年一次并不是坏主意。我认为开始从经理中挑选人员并披露其薪酬并不是一个好主意，原因之前讨论过。好的。阿米克女士，准备好后请提交报告。

贝基·阿米克：我的报告已准备好。根据截至上周四晚间收到的代理投票，代理投票人的选票中，有113,530票支持每年一次，2,412票支持每两年一次，552,309票支持每三年一次就公司指定高管薪酬进行咨询性投票。特拉华州法律要求的精确投票计数的证明将交给秘书，并与本次会议记录一同存档。

沃伦·巴菲特：谢谢你，阿米克女士。公司股东以咨询方式决定，他们应每三年就公司指定高管的薪酬进行一次咨询性投票。

39. 设定温室气体减排目标的提案

沃伦·巴菲特：下一项议程是由Meyer Family Enterprises, LLC提出的动议，该公司是伯克希尔的一位股东，由Brady Anderson和Linda Nkosi代表。该动议在代理声明中列出。该动议指示伯克希尔·哈撒韦为其能源发电控股公司设定温室气体和其他空气排放的量化减排目标，并向股东发布一份关于如何实现这些目标的报告。董事们已建议股东投票反对该提案。我现在请Brady Anderson和Linda Nkosi介绍该动议。为了让所有感兴趣的股东都能发表意见，我请他们将发言时间限制在五分钟内。

琳达·恩科西：下午好，巴菲特先生，芒格先生，女士们，先生们。我的名字是琳达·恩科西，来自斯威士兰，这位是来自爱荷华州的Brady Anderson。我们是爱荷华州沃特堡学院的经济学和金融专业学生，代表一个管理着120万美元投资组合的学生代表团来到这里，这个组合包括伯克希尔·哈撒韦的股票。我们非常感激能有这个机会参加这个著名的活动。我们代表西雅图的Investor Voice SPC，代表Meyer Family Enterprises提出代理声明第12页第4项，即一项要求伯克希尔为其能源控股公司设定温室气体减排目标的提案。我们赞扬伯克希尔·哈撒韦能源公司拥有全国最大的可再生能源投资组合。尽管如此，BH能源公司近一半的电力是通过燃烧煤炭产生的，这使得BH能源公司成为温室气体的大排放者。鉴于此，BH能源公司制定碳减排计划将是有益的。66%的美国电力公司都有温室气体减排目标。伯克希尔·哈撒韦能源公司不在其中，尽管其网站声明：“我们将设定具有挑战性的目标，并评估我们持续改善环境表现的能力。”正如股东所知，气候紊乱给全球经济以及伯克希尔带来了深刻的金融风险。气候风险投资者网络（其成员管理着超过11万亿美元资产）和碳信息披露项目（代表全球超过80万亿美元资产）已呼吁公司披露与气候变化相关的风险，并采取措施降低这些风险。

布雷迪·安德森：美国证券交易委员会已声明，气候风险在财务上是重要的，必须予以披露。这是因为高碳方法会带来风险，而低碳方法则会规避风险，无论是现在还是未来。如果没有计划和一套前瞻性目标，管理层和投资者都无法真正了解自己的处境。此外，伯克希尔的核⼼业务易受气候紊乱的影响。为什么？因为气候紊乱带来的许多最严重的负面财务影响都由保险公司承担。伯克希尔的GEICO因超级风暴桑迪遭受了其历史上单次最大损失，索赔涉及超过46,000辆被淹车辆，损失达4.9亿美元。伯克希尔的再保险业务很可能因日益极端的天气趋势而承担显著更多的风险。一段时间内，这些成本的一部分可能会以更高的保费形式转嫁给客户，但将不规划气候科学家一致认为亟需的温室气体减排所产生的成本强加给客户，并非一项审慎或可持续的长期战略。总之，全球数百家最大的机构投资者，代表着数万亿美元的投资资产，呼吁公司设定温室气体减排目标。这些目标是降低气候变化所带来的严重商业风险的关键工具。超过三分之二的美国公用事业公司已经设定了此类目标，机构代理咨询公司也反复建议投票支持此类目标设定和披露。因此，请与我们一起投票支持这一常识性提案，它不仅有利于地球，而且通过规避风险，将维护甚至提升伯克希尔的利润。感谢你们提供这个绝佳的机会来分享我们的担忧。

沃伦·巴菲特：好的，谢谢。（掌声）我假设灯光熄灭，没有其他人想就这项动议发言支持或反对？若无人发言，那么该动议现已准备就绪，可以付诸表决。如果有股东进行亲自投票，现在应在动议选票上做标记，并将选票交给过道中的一位会议工作人员。阿米克女士，准备好后请提交报告。

贝基·阿米克：我的报告已准备好。根据截至上周四晚间收到的代理投票，代理投票人的选票中，有49,553票支持该动议，561,642票反对该动议。由于反对票数超过所有已发行A类和B类股份总投票数的多数，该动议未获通过。特拉华州法律要求的精确投票计数的证明将交给秘书，并与本次会议记录一同存档。

沃伦·巴菲特：谢谢你，阿米克女士。该提案未获通过。

40. 股东关于支付股息的提案

沃伦·巴菲特：下一项议程是由David Witt提出的动议。该动议在代理声明中列出。该动议要求董事会考虑支付股息。董事们已建议股东投票反对该提案。Witt先生在吗？由于Witt先生或其代表均未到场提交其提案以供审议，该动议未获通过。

41. 会议休会

沃伦·巴菲特：好的。在休会之前，还有没有人有进一步的事项要在本次会议上提出？如果没有，我请斯科特先生向会议提出动议。

沃尔特·斯科特：我动议休会。

沃伦·巴菲特：有附议吗？

声音：我附议休会动议。

沃伦·巴菲特：休会动议已提出并获得附议。我们将以口头表决方式进行投票。