• 2020年年度会议
  • 第一部分
    • 1. “不像是一场年会”
    • 2. 会议将分为四个部分
    • 18. “我希望我已经说服你押注美国”
    • 18. “I hope I’ve convinced you to bet on America”
    • 19. 病毒将影响伯克希尔的经营利润
    • 19. Virus will affect Berkshire’s operating earnings
    • 20. 为什么伯克希尔将始终持有“充足的现金”
    • 20. Why Berkshire will always have “plenty of cash”
    • 21. 赞扬美联储的杰罗姆·鲍威尔解冻信贷
    • 21. Fed’s Jerome Powell praised for unfreezing credit
    • 22. 伯克希尔第一季度在股票上做得“非常非常少”
    • 22. Berkshire did “very, very little” on stocks in Q1
    • 23. 巴菲特：买入航空股是一个错误
    • 23. Buffett: Buying airline stocks was a mistake
    • 24. 正式公司会议开始
    • 24. Formal corporate meeting begins
    • 25. 选举伯克希尔董事
    • 25. Berkshire directors elected
    • 26. 咨询性薪酬投票
    • 26. Advisory compensation votes
    • 27. 关于董事会和管理层多元化的提案
    • 27. Proposal for board and management diversity
    • 6. 我们不会用股东的钱来补贴我们的公司
    • 7. 伯克希尔可能会有短期裁员，但预计长期就业将增长
    • 8. 可能只有非常小的伯克希尔子公司不会重开
    • 9. 出售或关闭表现不佳的子公司对伯克希尔来说并非新政策
    • 10. Precision Castparts的未来与波音的不确定性息息相关
    • 11. COVID-19对GEICO的影响
    • 12. 伯克希尔的保险子公司没有巨大的COVID-19风险
    • 13. “只要价格合适”，我们会出售大流行病保险
    • 14. 在巴菲特和芒格之后，伯克希尔仍将达成伟大的交易
    • 15. 没有伯克希尔公司接受了政府的“救助”资金
    • 16. 面对COVID-19，未来是一个“巨大的未知数”
    • 17. 指数基金仍然比向华尔街支付巨额费用要好
    • 18. 伯克希尔不会总是跑赢标普，但它是一家强大的公司
    • 19. 阿吉特·贾因在保险方面很出色，但不管资本配置
    • 2020年年度股东大会
    • 20. 伯克希尔哈撒韦能源公司的资产折旧
    • 21. 西方石油交易因油价意外暴跌而受挫
    • 22. 低价对石油股权投资构成风险
    • 23. 伯克希尔的股票衍生品合约没有“意外”负债
    • 24. 巴菲特之后，伯克希尔将保持完整
    • 25. 重大问题：美国能否继续印钞而不承担后果？
    • 26. 不需要大量资本的生意更好
    • 27. 美国无法违约，但通胀是风险
    • 28. 股票回购不道德，但可能很愚蠢
    • 29. 如果您想在套现时降低税负，可将A股转换为B股
    • 30. “目前银行业没有特殊问题”
    • 31. 尽管股价下跌，但并未使回购变得极具吸引力
    • 32. 不要欠信用卡债务
    • 33. “我百分之百支持照顾”因新冠疫情停摆而经济受创的人们
    • 20. Depreciation of assets at Berkshire Hathaway Energy
    • 21. Occidental deal hurt by unexpected oil price plunge
    • 22. Low prices pose a risk to oil equity investments
    • 23. No “surprise” liabilities in Berkshire’s stock derivatives contracts
    • 24. Berkshire will stay intact after Buffett
    • 25. Big question: Can U.S. keep issuing money without consequences?
    • 26. Businesses that don’t need a lot of capital are better
    • 27. U.S. can’t default on its debt, but inflation is a risk
    • 28. Stock buybacks aren’t immoral, but they can be stupid
    • 34. 作为一个繁荣的国家，我们需要更好地照顾抗击新冠疫情的人们
    • 35. 资本主义需要政府确保每个人都分享繁荣
    • 36. “聪明并不一定等同于智慧”
    • 37. 结论：永远不要做空美国

WARREN BUFFETT: Well, it’s 3:45 in Omaha and this is the annual meeting of Berkshire Hathaway.

It doesn’t look like an annual meeting. It doesn’t feel exactly like an annual meeting.

It particularly doesn’t feel like an annual meeting because my partner of 60 years, Charlie Munger, is not sitting up here. And I think most of the people that come to our meeting really come to listen to Charlie.

But I want to assure you, Charlie at 96 is in fine shape. His mind is as good as ever, his voice is as strong as ever, but it just didn’t seem like a good idea to have him make the trip to Omaha for this meeting.

Charlie — Charlie is really taking to this new life.

He’s added Zoom to his repertoire. So, he has meetings every day with various people. And he’s just skipped right by me technologically, but that really isn’t such a huge achievement. It’s more like, you know, kind of like stepping over a peanut or something.

But nevertheless, I want to assure you, Charlie is in fine shape. And he’ll be back next year. And we’ll — we’ll try to have everything in the show that we normally have next year.

Ajit Jain, also, who is the vice chairman in charge of insurance, is safely in New York. And again, it just did not seem worthwhile for him to travel to Omaha for this meeting.

But on my left, we do have Greg Abel. And Greg is the vice chairman in charge of all operations, except insurance. Greg manages a business that has more than 150 billion in revenues and crosses across dozens of industries, and has more than 300,000 employees.

And he’s been at that job a couple of years. And frankly, I don’t know what I’d be doing today if I didn’t have Ajit and Greg handling the duties that I was doing only about a quarter as well, a couple of years ago.

So, I owe a whole lot of thanks to Greg and you’ll get exposed to him more as this meeting goes along.

WARREN BUFFETT: The meeting will be divided into four parts. And in a moment or two, I will talk — sort of a monologue with slides.

I’ve never really used slides before. I’ve taught college classes intermittently, but pretty steadily, from age 21 to age 88. And I never recalled using a single slide.

You know, who says can’t teach an old dog a new trick. So — (Laughs)

We’ll see whether you can or not.

And I’ve got a number of slides and I would like to take you through those in the first section, which will start in just a minute.

And then we’ll move on to the — a brief recap of Berkshire’s first quarter results.

Now, we put those up in the 10-Q, which was posted on the internet, on berkshirehathaway.com, this morning. And there’s lots and lots of detail in there. So, I’m not going to go through. I’ll just have a point on one or two things that may be of interest to you. And actually, I’ll talk a little bit about what we did in April, which is something that is new to Berkshire, to be that current. But —

I’ll give you that. Then we’ll have the — the formal meeting, which will take maybe 15 or 20 minutes. And from there we’ll go to Becky Quick, who, for a couple of hours, will grill me and Greg on questions she’s selected from a huge batch that I’m told she’s received that went to Carol Loomis and Andrew Ross Sorkin, as well as to Becky. But to simplify things, we consolidated all those questions that Becky will ask.

And like I say, we’ll go for a couple of hours. And there’s no specified cut-off time at present. We’ll just see how things develop.

But you think about the potential of the farm. And now you get this idiot that buys a farm next to you and — and on top of that he’s sort of a manic depressive and drinks, maybe smokes a little pot, so his numbers just go all over the place.

Now, the only thing you have to do is to remember that this guy next door is there to serve you and not to instruct you. You bought the farm because you thought the farm was — had the potential. You don’t really need a quote on it.

You know, if you bought in with John D. Rockefeller, or Andrew Carnegie, there were never any quotes — well, there were quotes later on, but — but basically, you bought into the business, and that’s what you’re doing when you buy stocks.

But you get this added advantage that you do have this neighbor, who you’re not obliged to listen to at all, who is going to give you a price every day. And he’s going to have his ups and downs. And maybe he’ll name a silly price that he’ll buy at, in which case you sell, if you want to. Or maybe he’ll name a very low price and you’ll buy his farm from him. But you don’t have to. And you don’t want to put yourself in a position where you have to sell.

Stocks have this enormous inherent advantage of people yelling out prices all the time to you. And many people turn that into a disadvantage. And of course, many people can profit in one way or another from telling — telling you that they can tell you what this farmer is going to yell out tomorrow or next — your neighboring farmer — is going to yell out tomorrow or next week or next month. There’s huge money in it.

So, people tell you that it’s important and they know and that you should pay a lot of attention to their thoughts about what price changes should be, or you tell yourself that there should be this great difference.

But the truth is, if you owned the businesses you liked prior to the virus arriving — it changes prices and it changes — but nobody’s forcing you to sell. And if you really like the business, and you like the management you’re in with, and the business hasn’t fundamentally changed — and I’ll get to that a little when I report on Berkshire, which I will soon, I promise.

Stocks have an enormous advantage. And you still can bet on America. But you can’t bet unless you’re willing, and have an outlook, to independently decide that you want to own a cross section of America, because I don’t think most people are in a position to pick single stocks. A few may be, but — but on balance, I think people are much better off buying a cross section of America and just forgetting about it.

If you’d done that — if I’d done that when I got out of college, it’s all I had to do to make 100-for-1 and collect dividends on top of it, which increased — would increase substantially over time.

The American tailwind is marvelous. American business represents — and it’s going to have interruptions and you’re not going to foresee the interruptions, and you do not want to get yourself in a position where those interruptions can — can affect you, either because you’re leveraged or because you’re psychologically unable to handle looking at a bunch of numbers.

If you really had a farm, and you had this neighbor and one day he offered you $2,000 an acre, and the next day he offers you $1200 an acre, and maybe the day after that he offers you $800 an acre, are you really going to feel that at $2,000 an acre, when you had evaluated what the farm would produce, are you going to let this guy drive you into thinking I better sell because this number keeps coming in lower all the time?

It’s a very, very, very important matter to bring the right psychological approach to owning common stocks.

But I will tell you if you bet on America and sustain that position for decades, you’re going to do better than — than — in my view — far better than owning Treasury securities. Or far better than following people who tell you what the farmer is going to yell out next.

There’s huge amounts of money that people pay for advice they really don’t need and for advice where the person giving it can be very well meaning and believe their own line. But the truth is that — that you can’t have — you can’t deliver superior results to everybody by just having them trade around a business.

A business is going to deliver what the business produces. And the idea that you can outsmart the person next to you, or that the person advising you can outsmart the next — the person sitting next to you — is — well, it’s really the wrong approach.

So, find businesses — get a cross section. In my view, for most people, the best thing to do is to own the S&P 500 index fund. People will try and sell you other things because there’s more money in it for them if they do. And I’m not saying that that’s a conscious act on their part. Most — most good salespeople believe their own baloney. I mean, that’s part of being a good salesperson. And I’m sure I’ve done plenty of that in my life, too. But it’s very human.

If you keep repeating something — often that’s why lawyers get — have the witnesses keep saying things over and over again that by the time they get on the witness stand, they’ll — they’ll believe it whether it was true in the first place or not. The—

18. “I hope I’ve convinced you to bet on America”

WARREN BUFFETT: You are dealing with something fundamentally advantageous, in my view, in owning common stocks. I will bet on America the rest of my life. And I hope my successors at Berkshire do it.

Now we do it in two different ways. We do it by buying entire businesses, and we buy parts of businesses. And I would like to emphasize that — well, I’d like to give you a few figures that will tie in from our activities in the first quarter. And also, what we’ve done in April.

We are not right about — we do try to pick the businesses that we think we understand. We don’t buy the S&P 500. And we like to buy the entire businesses when we buy them. But we don’t get a chance to do that very often. Most of the best businesses are not available for sale in their entirety.

But we don’t mind in the least buying partial interests in businesses, and we would rather own 6 or 7 or 8 percent of a wonderful company and regard it as a partnership interest, essentially, in that company.

And we get an opportunity to do that through marketable securities and sometimes we get more opportunities than others. And with that, I hope I’ve convinced you to — to bet on America.

I’m not saying that this is the right time to buy stocks, if you mean by “right,” that they’re going to go up instead of down. I don’t know where they’re going to go in the next day or week or month or year.

But I hope I know enough to know — well, I think I can buy a cross section and do fine over 20 or 30 years. And I think that’s kind of, for a guy of 89, taking an optimistic viewpoint.

But I hope that, really, everybody would buy stocks with the idea that they’re buying partnerships in businesses and they wouldn’t look at them as chips to move around, up or down.

19. Virus will affect Berkshire’s operating earnings

WARREN BUFFETT: We will just now take a quick look — and I see we’ve got the — Becky’s email address — so if you have questions on what I’ve said or other things, you can email these questions and she is back there, probably, sort of a madhouse trying to handle questions coming in and pick out the ones she’s going to prioritize. But feel free to — anything I’ve talked about so far — to send along to her. And we’ll keep her address up when I later hold the formal part of the meeting, too.

Very briefly, in terms of Berkshire in the first quarter. If you’ll put up — we have the slides on that? There we are.

We — our operating earnings were — and there’s much more about this in the 10-Q, and it’s really not worth spending any real time on — but the operating earnings for the first quarter have no meaning whatsoever in terms of forecasting what’s going to happen the next year.

And I don’t know the consequences of shutting down the American economy. I know eventually it will work, whatever we do.

We may make mistakes — we will make mistakes — and I’m not — during this talk and later on — I’m not going to be second guessing people on this because nobody knows for sure what any alternative action would produce or anything of the sort.

But what we do know is that for some period, certainly during the balance of the year, but it could go on a considerable period of time, who knows. But our operating earnings will be less — considerably less — than if the virus hadn’t come along. I mean, that’s just — it — it hurts some of our businesses a lot.

I mean, you shut down — some of our businesses effectively have been shut down. It affects others much less.

Our three major businesses of insurance and the BNSF railroad — railroad and our energy business, those are our three largest by some margin — they’re in a reasonably decent position. They will — they’ll spend more than their depreciation.

So, some of the earnings will go — along with depreciation — will go toward increasing fixed assets — but basically these businesses will produce cash even though their earnings decline somewhat and —

20. Why Berkshire will always have “plenty of cash”

WARREN BUFFETT: And if we’ll go to part two — we at Berkshire, we keep ourselves in an extraordinarily strong position. We’ll always do that. That’s just — that’s fundamental.

We insure people — we’re a specialist to some extent, and the leader — it’s not our main business — but we sell structured settlements. That means somebody gets in a terrible accident, usually an auto accident, and they’re going to require care for 10, 30, 50 years.

And their family or their lawyer is wise enough, in our view, that rather than take some big cash settlement, to essentially arrange to have money paid over the lifetime of the individual to take care of their medical wills — bills — or whatever it may be.

And we’re — we’re a large — we’ve got many, many, many people that, in effect, have staked their wellbeing on the promises of Berkshire to take care of them for, like I say, 50 years or longer into the future.

Now, I would be — I would never take real chances with money under — of other people’s money — under any circumstances. Both Charlie and I come from a background where we ran partnerships. I started mine in 1956 for, really, seven, either actual family members or the equivalent. And Charlie did the same thing six years later.

And we never — neither one of us, I think — I know I didn’t — I’m virtually certainly the same is true of Charlie — neither one of us ever had a single institution investment with us. I mean, every single bit of money we managed for other people was from individuals, people with faces attached to them — or entities — or money with faces attached to them.

And so, we’ve always felt that our job is basically that of a trustee and, hopefully a reasonably smart trustee, in terms of what we’re trying to accomplish. But the trustee aspect has been very important. It’s true for the people with the structured settlements. It’s true for — up and down the line. But it’s true for the owners very much, too. So we always operate from a position of strength.

Now, I show on — on the slide that’s up, I show our — well, let’s go back one. Yeah. I show our net — our cash and Treasury bill position on March 31st. And you might look at that and say, well, you’ve got 125 billion or so in cash — in Treasury bills. And you’ve got, at least at that point, we had about 180 billion or so in equities.

And you can say, well, that’s a huge position, having Treasury bills versus just 180 billion in equities.

But we really have far more than that in equities because we own a lot of businesses. We own a hundred percent of the stock of a great many businesses, which to us are very similar to the marketable stocks we own. We just own them all. They don’t have a quote on them.

But we have hundreds of billions of wholly-owned businesses, and so they are — 124 billion, that’s not a — not some, you know, 40 percent or so. The cash position is far less than that. And we will always keep plenty of cash on hand and for any circumstances.

If a 9/11 comes along, if the stock market is closed as it was in World War I —it’s not going to be, but you know, I didn’t think we were going to be having a pandemic when I watched that Creighton-Villanova game in January either, so —

We want to be in a position at Berkshire where — well you remember Blanche DuBois in “A Streetcar Named Desire” — that’s goes back before many of you — but she said she didn’t want to — she, in Blanche’s case, she said that she depended on the kindness of strangers. And we don’t want to be dependent on the kindness of friends, even, because there are times when money almost stops.

21. Fed’s Jerome Powell praised for unfreezing credit

WARREN BUFFETT: But we — money was — investment grade companies were essentially going to be frozen out of the market. CFOs all over the country have been taught to sort of maximize returns on equity capital. So, they finance themselves to some extent through commercial paper because that was very cheap. And it was backed up by bank lines and all of that. And they — and they — they let the debt create — creep up quite a bit at many companies.

And then of course, they had the hell scared out of them by what was happening in markets, particularly the equity markets, and so they rushed to draw down lines of credit. That surprised the people who had extended those lines of credit, and they got very nervous.

And the capacity of Wall Street to absorb a rush to liquidity that was taking place in mid-March was strained to the limit, to the point where the Federal Reserve, observing these markets, decided they had to move in a very big way.

We got to the point where the U.S. Treasury market, the deepest of all markets, got somewhat disorganized. And when that happens, believe me, every bank and CFO in the country knows it, and they react with fear, and fear is the most contagious disease you can imagine. It makes the virus look like a piker. And we came very close to having a total freeze of credit to the largest companies in the world who were depending on it.

And to the great credit of (Federal Reserve Chair) Jay Powell — I’ve always had (former Fed chair) Paul Volcker up on a special place — a special pedestal — in terms of Federal Reserve chairmen over the years — we’ve had a lot of very good Fed chairmen, but Paul Volcker, I had him at the top of the list. And I’ll recommend another book.

Paul Volcker died about — here — I don’t know, less than maybe a year ago or a little less. But not much before he died, he wrote a book called “Keeping At It.” If you call my friends at the Bookworm, I think you’ll enjoy reading that book. Paul Volcker was a giant in many ways. He was a big guy, too.

He and Jay Powell couldn’t see more in temperament or anything. But Jay Powell, in my view, and the Fed board, belong up there on that pedestal, because — with him — because they acted in the middle of March — probably somewhat instructed by what they’d seen in 2008 and ‘09 — they reacted in a huge way and essentially allowed what’s happened since that time to play out the way it has.

March, when the market had essentially frozen — could— a little after mid-month — ended up — because the Fed took these actions on March 23rd — it ended up being the largest month for corporate debt issuance, I believe, in history.

And then April followed through and was even — was even — with even a larger month, and you saw all kinds of companies grabbing everything coming to market and spreads actually narrowed and — and every one of those people that issued bonds in late March and April ought to send a thank you letter to the Fed, because it would not have happened if they hadn’t operated with really unprecedented speed and determination.

And we’ll know the consequences of swelling the Fed’s balance sheet — you can look at the Fed’s balance sheet, they put it out every Thursday — it’s kind of interesting reading if you sort of a nut like me — but it’s up there on the internet every Thursday, and you’ll see some extraordinary changes there in the last six or seven weeks.

And like I say, we don’t know the consequences of that. And nobody does, exactly. And we don’t know the consequences of what, undoubtedly, we’ll have to do.

But we do know the consequences of doing nothing. And that’s — would have been the tendency of the Fed in many years past — not doing nothing — but doing something inadequate. But (former European Central Bank President) Mario Draghi, you know, brought the “whatever it takes” to Europe. And the Fed, in mid-March sort of did whatever it takes squared. And we owe them a huge thank you.

But we’re prepared at Berkshire. We always prepare on the add — on the basis that maybe the Fed will not have a chairman that acts like that. And we really want to be prepared for anything. So that explains some of the 124 billion in cash and bills. We don’t need it all. But we do never want to be dependent on, not only the kindness of strangers, but the kindness of friends.

22. Berkshire did “very, very little” on stocks in Q1

WARREN BUFFETT: Now, in the next slide we have the — what we did in — in equities. And these numbers are tiny when you get right down to it. I mean, for having 500 billion or so in net worth — I mean, not net worth — but in market value at the start of the year, or something close to that.

You know, our — we bought in 1.7 billion of stock and our purchases were a couple of billion more than our sales of equities.

But as you saw in the previous slide, we had operating earnings of 5, almost 6 billion. And so, we did very, very little in the first quarter.

23. Buffett: Buying airline stocks was a mistake

WARREN BUFFETT: And then I’ve added another figure, which I wouldn’t normally present to you. But I want to be sure that if I’m talking to you about investments and stocks — more than I usually have — I want you to know what Berkshire is actually doing now.

You’ll see in the month of April that we net sold 6 billion or so of securities. And that’s basically — that isn’t because we thought the stock market was going to go down or anything of the sort, or because some — somebody changes their target price, or they change this year’s earnings forecast.

I just decided that I’d made a mistake in evaluating — it was an understandable mistake. It was a probability-weighted decision when we bought that we were getting an attractive amount for our money when investing across the airlines business.

So, we bought roughly 10 percent of the four largest airlines. And we probably — this doesn’t — is not a hundred percent of what we did in April — but we probably paid 7 or 8 billion — somewhere between 7 and 8 billion — to own 10 percent of the four large companies in the airline business.

And we felt for that, we were getting a billion dollars, roughly, of earnings. Now, it wasn’t — we weren’t getting a billion dollars of dividends. But we felt our share of the underlying earnings was a billion dollars and we felt that that number was more likely to go up than down over a period of time, that it would be cyclical, obviously.

But — but it was — it was as if we’d bought the whole company, but we bought it through the New York Stock Exchange and we can only effectively buy 10 percent, roughly, of the four. And we didn’t — we treat it mentally exactly as if we were buying a business.

And — and it turned out I was wrong about that business because of something that was not in any way the fault of four excellent CEOs.

I mean, believe me, no joy being a CEO of a airline, but the companies we bought are well managed. They did a lot of things right. It’s a very, very, very difficult business because you’re dealing with millions of people every day and if something goes wrong, for 1 percent of them, they are very unhappy.

So, I don’t envy anybody the job of being CEO of an airline, but I particularly don’t enjoy him — being in a period like this where essentially nobody in — people have been told, basically, not to fly.

I’ve been told not to fly for a while. I’m looking forward to flying. I may not fly commercial, but that’s another question.

But the — but the airline business — and I may be wrong, and I hope I’m wrong — but I think it changed in a very major way. And it’s obviously changed in the fact that there are four companies — are each going to borrow perhaps an average of at least 10 or 12 billion each.

Well, you have to pay that back out of earnings over some period of time. I mean, you’re 10 or $12 billion worse off if that happens, and of course, in some cases are having to sell stock or sell the right to buy a stock at these prices. And that takes away from the upside on —

And I don’t know, whether it’s two or three years from now, that as many people will fly as many passenger miles as they did last year. They may and they may not. But the future is much less clear to me about how the business will turn out through absolutely no fault of the airlines themselves.

It’s something that was a low-probability event. It happened and it happened to hurt particularly — you know, whether it’s the travel business, the hotel business, cruise business, theme park business — but the airline business in particular and of course, the airline business has the problem that if the business comes back 70 percent or 80 percent, the aircraft don’t disappear. So, you’ve got — you’ve got too many planes.

But it didn’t look that way when the orders were placed a few months ago and when the arrangements were made.

But the world changed for airlines. And I wish them well, but it’s one of the businesses we have — we have businesses we own directly that are going to be hurt significantly.

The virus will cost Berkshire money. It doesn’t cost money because our stock, and various other businesses, moves around. I mean, if XYZ, which is — say it’s one of our holdings, and we own it as a business, and we like the business — if the stock goes down 20 or 30 or 40 percent, we don’t feel we’re poor in that situation.

We felt we were poor, in terms of what had actually happened to those airline businesses, just as if we owned a hundred percent of them.

So that explains those sales, which are relatively minor. But I want to make sure that nobody thinks that that involves a market prediction.

And that pretty well wraps it up for Berkshire.

24. Formal corporate meeting begins

WARREN BUFFETT: So now we move into the formal part of the meeting, which will be followed by a fairly extended question and answer period, if there are a lot of questions with Becky. And while we’re doing this formal part of the meeting — it’s not too exciting — so feel free to leave your — whatever you’re viewing this through. And if you want to send questions to Becky, we’ll keep her contact information up on the screen.

Or if you want to fix yourself a sandwich or do anything else, we will now move — or you can pay attention to the formal part of the meeting. But we will do this and it won’t take too long, and then we will move on to the question and answer meeting.

So, with that, I will call the meeting to order.

And this follows the script, if you can’t tell by what I’m saying.

I’m Warren Buffett, chairman of the board of directors of the company and I welcome you to this 2020 annual meeting of shareholders.

Marc Hamburg is secretary of Berkshire Hathaway and he will make a written record of the proceedings.

Dan Jaksich has been appointed inspector of elections at this meeting. He will certify to the count of votes cast in the election for directors and the motions to be voted upon at this meeting.

The named proxy holders for this meeting are Walter Scott and Marc Hamburg.

Does the secretary have a report of the number of Berkshire shares outstanding, entitled to vote, and represented at the meeting?

MARC HAMBURG: Yes, I do. As indicated in the proxy statement that accompanied this note — the notice of this meeting — that was sent to all shareholders of record on March 4th, 2020, the record date for this meeting, there were 699,123 shares of Class A Berkshire Hathaway common stock outstanding, with each share entitled to one vote on motions considered at the meeting, and 1,382,352,370 shares of Class B Berkshire Hathaway common stock outstanding, with each share entitled to 1/10,000 of one vote, on motions considered at the meeting.

Of that number, 472,037 Class A shares and 834,802,274 Class B shares are represented at this meeting by proxies returned through Thursday evening, April 30th.

WARREN BUFFETT: Thank you. That number represents a quorum and we will therefore directly proceed with the meeting.

First order of business will be a reading of the minutes of the last meeting of shareholders. I recognize Miss Debbie Bosanek, who will place a motion before the meeting.

DEBBIE BOSANEK: I move that the reading of the minutes of the last meeting of shareholders be dispensed with and the minutes be approved.

WARREN BUFFETT: Do I hear a second?

UNIDENTIFIED VOICE: I second the motion.

WARREN BUFFETT: The motion is carried.

25. Berkshire directors elected

WARREN BUFFETT: The next item of business is to elect directors. I recognize Miss Debbie Bosanek to place a motion before the meeting with respect to election of directors.

DEBBIE BOSANEK: I move that Warren Buffett, Charles Munger, Gregory Abel, Howard Buffett, Stephen Burke, Kenneth Chenault, Susan Decker, David Gottesman, Charlotte Guyman, Ajit Jain, Thomas Murphy, Ronald Olson, Walter Scott, and Meryl Witmer be elected as directors.

UNIDENTIFIED VOICE: I second the motion.

WARREN BUFFETT: It has been moved and seconded that Warren Buffett, Charles Munger, Greg Abel, Howard Buffett, Steve Burke, Ken Chenault, Susan Decker, David Gottesman, Charlotte Guyman, Ajit Jain, Tom Murphy, Ron Olson, Walter Scott, and Meryl Witmer be elected as directors.

The nominations are ready to be acted upon. Mr. Jaksich, when you’re ready, you may give your report.

DAN JAKSICH: My report is ready. The ballot of the proxy holders in response to proxies that were received through last Thursday evening, cast not less than 543,203 votes for each nominee. That number exceeds a majority of the number of the total votes of all Class A and Class B shares outstanding.

The certification required by Delaware law of the precise count of the votes will be given to the secretary to be placed with the minutes of this meeting.

WARREN BUFFETT: Thank you, Mr. Jaksich.

WARREN BUFFETT: Warren Buffett, Charles Munger, Greg Abel, Howard Buffett, Steve Burke, Ken Chenault, Susan Decker, David Gottesman, Charlotte Guyman, Ajit Jain, Tom Murphy, Ron Olson, Walter Scott, and Meryl Witmer have been elected as directors.

And Ken, if you’re watching, or listening — Ken Chenault, our new director, actually got the highest vote of all the directors. Well ahead of me, I might add. So, congratulations, Ken.

26. Advisory compensation votes

WARREN BUFFETT: The next item on the agenda is an advisory vote on the compensation of Berkshire Hathaway’s executive officers. I recognize Miss Debbie Bosanek to place a motion before the meeting on this item.

DEBBIE BOSANEK: I move that the shareholders of the company approve, on an advisory basis, the compensation paid to the company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the compensation discussion and analysis, the accompanying compensation tables, and the related narrative discussion, in the company’s 2020 annual meeting proxy statement.

UNIDENTIFIED VOICE: I second the motion.

WARREN BUFFETT: It has been moved and seconded that the shareholders of the company approve, on an advisory basis, the compensation paid to the company’s named executive officers.

Mr. Jaksich, when you are ready, you may give your report.

DAN JAKSICH: My report is ready. The ballot of the proxy holders, in response to proxies that were received through last Thursday evening, cast not less than 519,750 votes to approve, on an advisory basis, the compensation to the company’s named executive officers — the compensation paid to the companies named executive officers. That number exceeds a majority of the number of the total votes of all Class A and Class B shares outstanding.

The certification required by Delaware law of the precise count of the votes will be given to the secretary to be placed with the minutes of this meeting.

WARREN BUFFETT: Thank you. Mr. Jaksich. The motion to approve, on an advisory basis, the compensation paid to the company’s named executive officers has passed.

The next item on the agenda is an advisory vote on the frequency of a shareholder advisory vote on compensation of Berkshire Hathaway’s executive officers.

I recognize Miss Debbie Bosanek to place a motion before the meeting on this item.

DEBBIE BOSANEK: I move that the shareholders of the company determine, on an advisory basis, the frequency — whether annual, biannual, or triennial — with which they shall have an advisory vote on the compensation paid to the company’s named executive officers, as set forth in the company’s 2020 annual meeting proxy statement.

UNIDENTIFIED VOICE: I second the motion.

WARREN BUFFETT: It’s been moved and seconded that the shareholders of the company determine the frequency with which they have — they shall have an advisory vote on compensation of named executive officers with the option being every one, two, or three years.

Mr. Jaksich, when you are ready, you may give your report.

DAN JAKSICH: My report is ready. The ballot of the proxy holders, in response to proxies that were received through last Thursday evening, cast 131,443 votes for a frequency of every year, 2228 votes for a frequency of every two years, and 419,984 votes for a frequency of every three years of an advisory vote on the compensation paid to the company’s named executive officers.

The certification required by Delaware law of the precise count of the votes will be given to the secretary to be placed with the minutes of this meeting.

WARREN BUFFETT: Thank you, Mr. Jaksich. The shareholders of the company have determined on an advisory basis that they shall have an advisory vote on the compensation paid to the company’s named executive officers every three years.

27. Proposal for board and management diversity

WARREN BUFFETT: Now we’re through with sort of the boilerplate resolutions, and this next item is of more importance.

And we have put up on the berkshirehathaway.com site, some material relating to this motion, which I hope shareholders and others read, because it’s important and it’s — well, I’ll describe it as to —

The script says, the next item of business is a motion put forth by the boards of trustees of the New York City Employees’ Retirement System, the New York City Teachers’ Retirement System, the New York City Police Pension Fund, the New York City Fire Pension Fund, funds collectively called “the Systems.”

The motion is set forth in the proxy statement.

The motion requests that the company adopt a policy for improving board and top management diversity.

The directors have recommended the shareholders vote against the proposal.

I’d like to interrupt the script here just a second to point out that we — when we saw that it would be impossible to have shareholders attend this meeting and traveling to Omaha, and gathering in gatherings, which really neither the governor, the mayor, or the public safety people, thought would be advisable.

We were hoping to have somebody from the comptroller’s office come and present the motion and then have a good discussion at the meeting of the pros and cons, because it’s a very — it’s a serious, important subject and —

I can tell you on a personal basis, I think I’m in sync with the comptroller, in terms of how he wants the world to evolve.

But I’m not — I disagree on the specifics of this motion as applied to — more generally and to Berkshire’s board in particular.

And we’ve been very outspoken over the years. We’ve probably written more on qualifications for directors, than probably, any public company I can think of. And we’ve been consistent over the years and we’ve explained the reasons for our position. And we know a great many people disagree with that position.

So, I was — I welcome the idea of really presenting to our meeting and having our shareholders hear what they had to say, and evaluate what we had — what our thoughts were.

And when we had to, essentially, not allow shareholders at the meeting, we immediately got in touch with the comptroller’s office. And we said we’d make an exception, if anybody from the comptroller’s office wanted to come out and present the proposition — or the proposal — and engage in our discussion of pros and cons.

And as you might expect, they were not in a position to send somebody. And we — so we offered — we may have made it even in the first place — we’d be glad to have somebody introduce the motion on their behalf.

And that we would also, if they would send along a supporting statement, we would be glad to have the person that was their proxy, in effect, present the motion — we’d be happy to have them read the supporting statement. And we said we’d appreciate it if they keep it to five minutes or less.

And they wrote back immediately and — or emailed back immediately — and said that they’d be delighted to do it that way. And they’d even try and keep it down to three minutes.

So, they’ve — they have sent a supporting statement, which is going to be read to you in a minute, and I’m glad they did it. I do hope shareholders will, or have already, and others, will read — will listen to what the supporting statement says. And we’ll also read the original arguments that they made in the proxy for their proposal. And then we’ll read our reasons for voting against the — suggest voting against, because it’s an important topic. And I really hope that next year that if somebody from the comptroller’s office wishes to come out, we’d be glad to have even a more fulsome discussion of the subject.

So, with that, I will now recognize Mr. Hamburg to read a statement prepared by the comptroller of the City of New York in support of the motion.

MARC HAMBURG: Thank you. Mr. Chairman, members of the board, fellow shareholders.

I’m Marc Hamburg from Berkshire Hathaway and I’m here to present Proposal Four, on behalf of the New York City comptroller, Scott Stringer, and the New York City pension funds.

The funds have approximately $211 billion in assets as of February and are substantial long-term Berkshire Hathaway shareowners with 2.5 million shares.

Our proposal requests that Berkshire Hathaway’s board adopt a diversity search policy requiring that the initial candidates from which new director nominees and external CEOs are chosen include qualified female, and racially or ethnically diverse, candidates.

Title: 2020 Annual Meeting

Part 4/5

We’re not going anyplace voluntarily, but we probably will go someplace involuntarily before that long. (Laughter)

Charlie is in good health, incidentally. I’m in good health. (Laughs)

20. Depreciation of assets at Berkshire Hathaway Energy

BECKY QUICK: Greg, let me ask you one of these capital allocation questions. This one comes from Matt Libel, and he says, “Berkshire directed 46 percent of capital expenditure in 2019 to Berkshire Hathaway Energy. Can you walk us through, with round numbers, how you think differences in capex spending versus economic depreciation versus GAAP depreciation, and help explain the timeframe over which we should recognize the contract — the contractive return on equity from these large investments, as we are shareholders in — as we, as shareholders, are making in Berkshire Hathaway Energy.”

GREG ABEL: So, when we look at Berkshire Hathaway Energy and their capital programs, we try to really look at — look at it as it was highlighted, really, in a couple different packages.

One, what does it actually require to maintain the existing assets for the next 10-20-30 years? I.e., it’s not incremental, it’s effectively maintaining the asset, the reflection of depreciation. And our goal is always to clearly understand, across our businesses, do we have businesses that require more than our depreciation, or equal, or less.

And, happy to say, with the assets we have in place and how we’ve maintained the energy assets, we generally look at our depreciation as being more than adequate, if we deploy it back into capital to maintain the asset.

Now, the unique thing in the lion’s share of our energy businesses that are regulated — and that exceeds 85 percent of them — 83 percent of them — we still earn on that capital we deploy back into that business. So, it’s not a traditional model where you’re putting it in, but you’re effectively putting it in to maintain your existing earnings stream. So, it’s not drastically different, but we do earn on that capital.

But what we do spend a lot of time, and that’s what, when Warren and I think about the substantial amounts of opportunities, that’s incremental capital that is truly needed within new opportunities.

So, it’s built — it’s to build incremental wind, incremental transmission, that services the wind or other types of renewable solar. That’s all incremental to the business and drives incremental growth in the business. It does require capital, but it does drive growth within the energy business.

So, there’s really the two buckets. I think we would use a number a little bit lower than the depreciation we’re comfortable the business can be maintained at that level. And as we deploy amounts above that, we really do view that as, quote, incremental or growth capex.

WARREN BUFFETT: Yeah, we have what — what — 40 billion or something of — what do we have in, sort of, kind of, in the works?

GREG ABEL: Oh, yeah. So, we have basically, as Warren’s highlighting, 40 billion in the works of capital, that’s over the next, effectively, nine years, 10-year period. A little — approximately half of that, we would view as maintaining our assets. More — a little more than half of it is truly incremental, but — and that are known — those are known projects we’re going to move forward with.

And I would be happy to report, we probably have another 30 million — 30 billion — that aren’t far off of becoming real opportunities in that business.

Now, as Warren said, that takes a lot of time. It’s a lot of work. The transmission projects, for example, we’re finishing in 2020 were initiated in 2008 when we bought PacifiCorp. I remember working on that transmission plan, putting it together, thinking six to eight years from now, we’ll have them in operation.

Twelve years later, and over that period of time, we earned on that capital we have invested, and then when it comes into service, we earn on the whole amount.

So, we’re very pleased with the opportunity, but it — we plant a lot of seeds, put it that way.

WARREN BUFFETT: Yeah. And these are not — it’s not like they’re super-high return thing. But they’re decent returns over time. And we’re almost uniquely situated to deploy the capital, as opposed — I mean, you could have government entities do it too —but in terms of a private enterprise — and they take a long time. They earn decent returns.

I’ve always said about the energy business, it’s not a way to get real rich, but it’s a way to stay real rich, and —

We will deploy a lot — a lot of money at decent returns — not super returns, you shouldn’t earn super returns on that sort of thing, I mean — it does — you are getting rights to do certain things that governmental authorities are authorizing. And they should protect consumers and — but they also should protect people that put up the capital. And —

You know, it’s worked now for 20 years, and it’s got a long runway ahead.

21. Occidental deal hurt by unexpected oil price plunge

BECKY QUICK: All right, this next question comes from Jason (Plawner) in New Jersey. “As both a Berkshire and Occidental shareholder I was encouraged to see your investment in the company, but with passing weeks, it became evident that your investment facilitated Occidental management’s ability to avoid a shareholder vote on the Anadarko acquisition, a very shareholder unfriendly outcome.

“This deal proved to be irresponsible and expensive from an OXY perspective, and ultimately, very value destructive for OXY shareholders. In my view, it also permanently hurt Berkshire’s reputation in the marketplace.

“Please comment on this unfortunate outcome and tell me why OXY shareholders and other market observers shouldn’t feel this way.”

WARREN BUFFETT: Well, yeah. We said right from the beginning — although we didn’t certainly expect the degree of what’s happened — we said, essentially, when you buy into an oil — a huge oil production company — you know, how it works out is going to depend on the price of oil to a great extent.

It’s not going to be your geological home runs or super mistakes or anything like that. It is a — it is a investment that depends on the price of oil. And, you know, I — when oil goes to minus $37 — (laughs) — it happened the other day for, I guess, it was the May contract. You know, that’s off the chart, and —

If you own oil, you should only own oil, if you expect these prices to go up significantly. I don’t know whether they’ll go up significantly or not. We’re in the transaction.

Our commitment was made on a Sunday when the management of Anadarko favored Chevron. And Chevron had a breakup fee of a billion dollars and the Occidental people had been working on it for several years.

And it was attractive at oil prices that then prevailed. And it doesn’t work, obviously — it doesn’t work at $20 a barrel — it certainly doesn’t work at minus $37 a barrel — but it doesn’t work at $20 a barrel.

And everything the oil companies have been doing, whether it’s Exxon or Occidental or anybody else, it doesn’t work at these oil prices.

That’s why oil production is going to go down a lot in the next few years, because it does not pay to drill now.

That’s happened at other times in the past. But the situation is, you know, you don’t know where you’re going to store the incremental barrel of oil, and oil demand is down dramatically, and for a while the Russians and the Saudis were trying to outdo each other in how much oil they could produce.

And when you’ve got too much in storage, it doesn’t work its way off that very fast.

Now, you will have production of oil go down in the United States significantly. It does not pay to drill in all kinds of formations that paid before, and it doesn’t pay — it doesn’t pay to have paid the price that oil was trading at in the ground a year or two ago.

And to that extent, if you’re an OXY shareholder, you know you’ve — or any shareholder in any oil producing company — you’ll join me in having made a mistake, so far, in terms of where oil prices went. And who knows where they go in the future.

22. Low prices pose a risk to oil equity investments

BECKY QUICK: Let me follow up with this one, and this one comes in from Mohnish Bahl, who says, “Is there a risk of permanent loss of capital in the oil equity investments?”

WARREN BUFFETT: Well, there certainly is, you know — there’s no question if — if oil stays at these prices, there’s going to be a lot of money — a whole lot of money — in middle extended bank loans, and it’ll affect the banking industry, to some degree, not — it doesn’t destroy them or anything, but there’s a lot of money that’s been invested that was not invested based on a $17 or $20 or $25 price for WTI, West Texas Intermediate oil, and —

But you can do the same thing in copper. You can do the same thing in some of the things we manufacture — I mean it — but with commodities, it’s particularly dramatic.

And, you know, farmers have been getting lousy prices, but to some extent, the government subsidized them. I’m all for it, actually.

But if you’re an oil producer, you take your chances on future prices, unless you want to sell a lot of futures forward. OXY, actually, did sell 300,000 barrels a day of puts, in effect, that — or they bought puts — and sold calls, in effect, to match it. And they were protected on $10 — for a layer of $10 a barrel on 300,000 barrels a day.

But you’re really buying — when you buy oil, you’re betting on oil prices over time, and over a long time. And oil prices — there’s risk. And the risk is being realized by oil producers as we speak.

There will be— if these prices prevail — there will be a lot of bad loans in energy loans and or— bad debts in energy loans. And if there are bad debts in energy loans, you can imagine what happens to the equity holders. So yes, there’s a risk.

23. No “surprise” liabilities in Berkshire’s stock derivatives contracts

BECKY QUICK: All right, this question comes from Bob (Coleman). He says, “Warren, could you bring us up to date with the status of your equity put contracts? Sourcing the 2019 — ”

WARREN BUFFETT: Yeah.

BECKY QUICK: ” — annual report, found on page 60, it appears at 2019 year-end, the fair value liability was just under a billion dollars. And if the indexes decline 30 percent, the liability obligations balloon to $2.7 billion.

“So, if the indexes are down 60 percent, would Berkshire’s obligation be close to 5 1/2 billion dollars? Does that math seem reasonable? And are there any loose ends or open exposures associated with — ”

WARREN BUFFETT: No, they — we — between 2004, I think, and 2006, I think we wrote 48 — maybe 50 contracts — something like that.

The shortest was 15 years. The longest was 20 years. And we received, as I remember, roughly $4.8 billion, which we were free to do with what we wanted. And we agreed to pay based on where one or more of four indices were selling for, at the time of expiration. They were so-called European style puts, where they’re only payable based on one date. And we did not have — with a small exception — we did not have to put up collateral, which was part of the deal.

And we’ve had that $4.8 billion — we probably had an original nominal value of something over 30 billion, maybe 35 billion — that’s if everything went to zero. I mean, if the Dow Jones went to zero, the FTSE went to zero, and the Nikkei and so on.

A number of those have run off. So, we now have about 14 billion, nominal. We have something less than half left. We haven’t paid out anything significant. We bought back a few of them.

If everything went to zero, we would owe 14 billion. If everything were to sell at the same price it was selling for on March 31st, I think the number is some — I think it’s somewhat less than we carry as a liability on the balance sheet, which is two-and-a-fraction billion.

So far, so good. I mean, we’ve, had the use of a lot of money, and the outstanding potential of them is, if the market went up a lot, we wouldn’t have to pay anything, and if it goes down some more, we have to pay more than a couple of billion, but we’ve had the liability set up for that.

But so far, so good, on that. And it is not anything that causes us any problem. They come due — the final one — I think comes due sometime in 2023. I think there’s — I think maybe 20 or 25 percent of them come due late this year.

And so, it’s — there’s nothing — the questioner doesn’t really understand about them, I can tell by the question — and there’s no surprises there. There’s — there’s no way that some liability could double up on us, except based on — except relating to where those indices close at the expiration of a group of different puts, which, like I said, have been more than cut in half. And we’ve done very well on it.

Key to that —

BECKY QUICK: Warren, you mentioned a few minutes ago that you —

WARREN BUFFETT: Well, I was just going to say, key to that was — with just a couple of tiny exceptions — we did not — we did not agree to put up collateral. We never would have gotten ourselves in that position, and —

That was — when we made the deals, we would just would not get ourselves in that position. And we never, never, will, where on a given date, we could have some tremendous obligation that would come due that we weren’t counting on getting — having come due.

I’m done, then, Becky, yeah.

24. Berkshire will stay intact after Buffett

BECKY QUICK: OK, thanks. And you mentioned a few minutes ago that you’re very concerned about Berkshire’s long-term health, too. This question came in from Drew Estes in Atlanta, Georgia, who says, “There’s already speculation of a post-Buffett breakup of Berkshire, and given the sway carried by modern activists, the speculation should be taken seriously.

“Many long-term owners see the folly in this view. A $25 billion auxiliary earnings stream provides a lot of flexibility when investing insurance float.

“On our, and your estate’s, behalf, could you more forcefully make the case of maintaining Berkshire’s current architecture? If you don’t, that responsibility will fall on an unknown set of shoulders with far less credibility>′

WARREN BUFFETT: Well, if you were to — if you were to sell Berkshire’s various subsidiaries, you would incur a very significant amount of tax at the corporate level before anything was distributed to the shareholders.

You can spin off a given one, or something of the sort. But the ability to break up a diverse company without tax implications — there was there was something called the General Utilities Doctrine that prevailed in various ways up until 1986.

And a lot of people seem to comment based on the fact that that didn’t happen in 1986. (Laughs)

And there’s imaginative ways where people try to avoid taxes, and can do it in some cases, on certain types of transactions. If you were to break up Berkshire, that would be one factor.

But the interaction of being able to move capital around, in terms of being able to do things in insurance that we couldn’t do unless there were the backup earnings, and capital employed in the other entities — there’s enormous advantages in capital deployment within the place, so I —

There is not a big discount to breakup value embodied in Berkshire’s price. And the situation actually is that although all my Berkshire shares — every share — will be given to charities pursuant to a plan I developed back 14 years ago and followed ever since, and will continue following this July — I’ll be giving away 3 billion or so worth of the stock and — but it’s all — it still involves a big voting percentage that — including other people’s that still remain in the picture, aside even from the Buffett family — it isn’t going to happen.

Now, I will tell you everybody in the world will come around and propose something, and say it’s wonderful for shareholders, and by the way, it involves huge fees. I mean— (laughs) — you do not — you do not get impartial advice from Wall Street — (laughs) — when there’s (an) enormous amount of fees possible from one action, and no fees applicable from another action.

But you can be sure I’ve thought about it. And I would say that you can you can count on Berkshire’s present posture being continued for a long time.

I can’t tell you what’s going to happen a hundred years from now. And I can’t tell you exactly what would happen, for example, if certain ideas, in terms of wealth taxes, changed, or taxes on foundations change. I mean, they could —

But my plan has been thought out and in place for a long time. And it not only ensures that the money that’s been made off Berkshire — all of it ends up going to various philanthropies staggered over time — but it also — it will keep the wolves away.

Greg, do you have any thoughts on that? (Laughs)

GREG ABEL: Well, I think the comment on the capital allocation is critical, that we have the ability to move the capital amongst the — be it the operating businesses or up to the insurance or down — with really no consequences to our shareholders. That’s the value driver, the unique structure of Berkshire, and it creates immense value, so — That’s all I would add, or second, I guess.

25. Big question: Can U.S. keep issuing money without consequences?

BECKY QUICK: All right, this question comes from Robb Grandish in Washington, D.C. He says, “Interest rates are negative in much of Europe, also in Japan. Warren has written many times that the value of Berkshire’s insurance companies is derived from the fact that policyholders pay up front creating insurance float, on which Berkshire gets to earn interest.

“If interest rates are negative, then collecting money up front will be costly rather than profitable. If interest rates are negative, then the insurance float is no longer a benefit but a liability.

“Can you please discuss how Berkshire’s insurance companies would respond if interest rates became negative in the United States?”

WARREN BUFFETT: Well, if they were going to be negative for a long time, you better — you better own equities. Or you better own something other than — than debt.

I mean, it’s remarkable what’s happened in the last 10 years. I’ve been wrong in thinking that you could really have the developments you’ve had without inflation taking hold.

But we have 120-odd billion — well, we have some — almost — very high percentage in Treasury bills — some in other — and some just in cash, but we — but those Treasury bills are paying us virtually nothing.

Now, they’re a terrible investment over time. But they are the one thing that when opportunity arises — it will arise at a time — and maybe the only thing you can look to pay for those opportunities is the Treasury bills you have. I mean, the rest of the world may have stopped.

And we also need them to protect— be sure that we can pay the liabilities we have, in terms of policyholders over time, and we take that very seriously.

So, if the world turns into a world where you can issue more and more money and have negative interest rates over time, I’d have to see it to believe it, but I’ve seen a little bit of it. I’ve been surprised. So, I’ve been wrong so far.

I do not think that— I don’t see how you can create — I would say this, if you can have negative interest rates, and pour out money and incur more and more debt, relative to productive capacity, you think the world would have discovered it in the first couple thousand years rather than just coming on it now, but we will see.

It’s one of the most — it’s probably the most interesting question I’ve ever seen in economics — is can you keep doing what we’re doing now, and —

We’ve been able to do it — or the world’s been able to do it — for now, a dozen years or so and —

But we’re — we may be facing a — we may be facing a period where we’re testing that hypothesis that you can continue it with a lot more force than we’ve tested it before.

Greg, do you have any thoughts on that. I wish I knew the answer. Maybe, you do? (Laughter)

GREG ABEL: No, I think, as you articulated — I think it was in the annual report, too — I mean, we don’t know the answer.

But, as you said, some of the fundamentals right now are very interesting relative to having a negative interest rate. But I know — I hate to say it, but I don’t have anything to add. (Laughter)

WARREN BUFFETT: I’d love to be secretary of the Treasury, if I knew I could just keep raising money at negative interest rates, that makes life pretty simple.

We’re doing things that we really don’t know the ultimate outcome. I think — and I think, in general, they are the right things, but I don’t think they’re without consequences. And I think they could be, kind of, extreme consequences if pushed far enough.

But there would be, kind of, extreme consequences if we didn’t do it as well. So, somebody has to — you know, balance those — those questions.

26. Businesses that don’t need a lot of capital are better

BECKY QUICK: All right, this question comes from Adam Schwartz in Miami, Florida. And he says Berkshire is the largest holding in his partnership, which also houses most of their net worth.

He says, “Berkshire’s invested in many capital-intensive businesses through the years, railroads as an example. How do you think about the inflationary, or even deflationary, risks for all of the capital-intensive businesses? And could this prove to be an existential problem for businesses?”

“I’m kind of referencing what you were just talking about, that eventually the bill for the debts being issued comes due. Will it eventually come from all businesses through some combination of higher tax rates on corporations, increased wages for the lower-middle classes?”

WARREN BUFFETT: Well, I certainly think that increased corporate taxes are a much higher probability than having lower corporate taxes.

So, I — I think that we got handed, as a corporation, a big chunk of what used to be the government’s profits from our business a couple of years ago. And it would depend on, to some extent, which party is elected and — and whether they have control of both houses as well as the presidency, and who knows what else.

But we could very easily have higher corporate income taxes, and perhaps much higher corporate income taxes, at some point. And in terms of capital-intensive businesses, they’re just not as good, if you can find an equally good business — I mean, in terms of operations — that doesn’t require capital.

I mean — they’re — you know, the — See’s never — See’s (Candies) never really required. It didn’t grow, but it’s — it just doesn’t — it didn’t take money to expand it and it’s delivered enormous sums to us.

And because we own it within Berkshire, to redeploy it elsewhere didn’t require a lot of tax expense either at the corporate level or at the personal level.

So, you really want a business — and everybody wants a business — that doesn’t take any capital to speak off — and keeps growing — that doesn’t take more capital as it grows.

Now, our utility business (inaudible) the energy business requires more capital as it grows. Our railroad business, to some extent, requires more capital if it doesn’t grow, even.

So capital-intensive businesses, by their nature, you know, are not as good as something where people pay in advance and you don’t need the capital.

I mean, if you look at — if you look at where the top market value is in a $30 trillion market, you know — if you take the top four or five companies that account for, you know, maybe 3 — 4 trillion or so of that 30 trillion, basically, they don’t take much capital.

And that’s why they’re worth a lot of money, because they make a lot of money and they don’t require the money, to any great extent, in the business. We own some businesses like that.

But it’s certainly not the railroad. And it’s not — it’s not the energy business. They’re good businesses. We love them. But if they didn’t take any capital, they’d be unbelievable.

But that’s just — that’s what we’ve learned from 50 or 60 years of operating businesses, that if you can find a great business that doesn’t require capital when it grows, you’ve really got something.

And to a certain extent, because insurance uses the kind of assets we would like to own anyway, our insurance business doesn’t really take capital. It requires having capital available. But, we’re able to invest that money, largely, in things we’d like to own anyway.

So, we’re particularly well suited for the insurance business. And it’s really been the most important factor in our growth over the years, although a lot of other things contribute.

Greg, you’re in a capital — you were in a capital-intensive business. (Laughs)

Tell us about it. (Laughter)

GREG ABEL: Well, I think there’s no question, obviously, we’d prefer to be in a less capital-intensive business, but there are unique opportunities there.

The one I would touch on when I think of inflation — or even potentially, as we go through this crisis, and maybe a prolonged one — or depending on how long it takes to recover — I mean, we are in a unique — when we’re looking at energy or rail — we do have a certain amount of pricing power. And it’s through our regulatory formulas or how our arrangements are with our customers.

So, if we then were to move into a deflationary period, it’s not perfect protection, but those businesses, generally, can recover a significant portion of their costs, even in an inflationary environment, and still earn a reasonable return.

They’re not going to be great returns, as you highlight, Warren. But they’re still going to earn a —

WARREN BUFFETT: Oh yeah.

GREG ABEL: — reasonable return on their capital, even in an inflationary period. There may be some lag and some things like that, but they’re still going to be very sound investments.

WARREN BUFFETT: Oh, yeah. If there was 10- for-1 inflation — make it extreme — yeah, we’d be happy we own the railroad — very happy.

Well, we’d be investing a lot of capital in it, but that businesses, in my view, is a very, very solid business for many, many, many, many decades to come. I said originally, we bought it with a hundred-year time horizon, and I’ve extended that, so —

It will earn more dollars if there’s a lot of inflation. In real terms, who knows? But it would earn a lot more dollars. And a lot of the energy projects would in the —

But it’s better if we don’t have inflation. And it’s better if we don’t have capital — (laughs) — if we can find the same sort of businesses that aren’t as capital intensive.

We — we’ve got capital. I mean, we — we’re ideally positioned for capital-intensive businesses that other people have trouble raising capital for, but they’ve still got to promise decent returns.

27. U.S. can’t default on its debt, but inflation is a risk

BECKY QUICK: All right, this question comes from Charlie Wang. He’s a shareholder in San Francisco. He says, “Given the unprecedented time of the economy and the debt level, could there be any risks and consequences of the U.S. government defaulting on its bonds?”

WARREN BUFFETT: No. The — if you — if you print bonds in your own currency, what happens to the currency is — it can be a question, but you don’t default.

The United States has been smart enough, and people have trusted us enough, to issue its debt in its own currency.

And Argentina is now having a problem because the debt isn’t in their own currency. And lots of countries have had that problem, and lots of countries will have that problem in the future. It is very painful to owe money in somebody else’s currency.

But if you — listen, if I could issue a currency — Buffett Bucks — and I had a printing press, you know, I could borrow money — and I could borrow money on that — I would never default. (Laughs)

So, what you end up getting, in terms of purchasing power, can be in doubt. But in terms of the U.S. government — when Standard and Poor’s downgraded the United States government — I think it was Standard and Poor’s, some years back — that, to me, did not make sense.

I mean, in the end, how you can regard any corporation as stronger than a person who can print the money to pay you, I just don’t understand.

So, don’t worry about the government defaulting.

I think it’s kind of crazy, incidentally — this should be said — to have these limits on the debt and all of that sort of thing, and then stopped government arguing about whether it’s going to increase the limits. We’re going to increase the limits on the debt.

The debt isn’t going to be paid, it’s going to be refunded. And anybody that thinks they’re going to bring down the national debt, I mean — that — you know — there’s been brief periods — I think in the late ’90s or thereabouts — when the debt has come down a little bit.

The country is going to print more — incidentally, the country is going to grow, in terms of its debt paying capacity. And — but the trick is to keep borrowing in your own currency.

28. Stock buybacks aren’t immoral, but they can be stupid

BECKY QUICK: Emphasis on trick.

This question comes from David Kass. He is a clinical professor of finance at the University of Maryland. And he says, “Berkshire has invested in many companies with stock buyback programs. Recently there’s been a backlash against buybacks. What are your views on this subject?”

WARREN BUFFETT: Well, it’s very politically correct to be against buybacks now, you know, and they’re going to incorporate it in the loan program.

The — there’s a lot of crazy things said on buybacks. Buybacks are so simple. I mean, it’s a way of distributing cash to shareholders.

And let’s just say that you and I and Greg — the three of us — decide to buy an auto dealership, or a McDonald’s franchise, or something. We each put a million dollars in, you know, or whatever the number may be.

And we get along with each other and the business grows and all of that. And one of us really wants to spend our share of the earnings. And the other two want to leave the money in the business to grow.

Now if the three of us did that, and we’re the only shareholders, we would not establish a 100 percent dividend payout for everybody. And we wouldn’t freeze the one that wanted to get out, either.

The logical thing to do is to buy a portion — whatever that person wants to spend annually from the earnings — buy a portion of their stock, and the other two find their interest in the company goes up. And the third person still has a little more of an interest by what they leave in, but they also can take some money out of the business.

You’re taking money out of the business in either case. And one you call dividends and you send it to everybody whether they want it or not. And with buybacks, you give it to the ones who want the money.

And I have been following a policy of giving away stock, now, since 2006. And I’ll give away a lot of stock. But the people — the philanthropies — that that receive it — the gifts — have to spend the money very promptly, within, you know — on a current basis, more or less.

So, they are getting $3 billion worth of stock, or whatever it may be. And I’m, in effect, reducing my interest in Berkshire. But I’m still — Berkshire is still retaining more capital than I’m giving away, so I have more dollars invested, but my interest goes down, and the people that need the cash to carry out the philanthropic efforts, they cash out the stock.

And I don’t force — I don’t force my sister, or whoever it may be, to take a bunch of money she doesn’t want. She wants it reinvest

标题：2020年年度会议

第五部分 / 第五部分

想要启动极其大规模的问题（计划）并不是那么容易的。总会有一定程度的欺诈发生。总会有——你知道的——一切都不会完美无缺。

但我百分之百支持照顾那些确实因与自己无关的事情而受到伤害的人，而这种情况——你知道的——谁知道会持续多久。

有数以百万计的人在担心几个月前他们还不担心的事情。他们什么也没做。他们按时上班，取悦了他们打交道的人，无论是什么情况。而现在他们失去了工作，或者被强制休假，或者其他什么。

所以，我——我完全赞同这个基本理念。而且我认为这非常困难。

我们无法完美地执行。你尽力而为，并且迅速行动。我——我由衷称赞国会在这件事上迅速采取行动。我认为他们从2008年和2009年的经历中学到了东西。我称赞他们尝试做我认为非常正确的事情，我不会坐在那里想我怎么能做得更好。格雷格？

格雷格·阿贝尔：我同意这些评论。

34. 作为一个繁荣的国家，我们需要更好地照顾抗击新冠疫情的人们

贝基·奎克：沃伦，这个问题来自演员比尔·默里，他也是伯克希尔的股东。他说：“这场疫情将培育出一批新的战争老兵——医疗保健、食品供应、物流配送、社区服务。这么多人欠这少数人太多。这个伟大的国家如何才能回报并照顾他们所有人？”

沃伦·巴菲特：嗯，我们实际上无法支付——你知道的——就像那些在诺曼底登陆的人一样。我是说，穷人、弱势群体遭受了痛苦。那是难以想象的痛苦，与此同时，他们还在做着所有这些事情——你知道的——他们连续工作24小时，我们甚至不知道他们的名字。所以，我们应该——

如果我们在某方面做得过分，我们应该做那些能帮助这些人的事情。

而这个国家——我以前说过很多次——但它的历史——我是说——我们是一个非常、非常、非常富裕的国家。而比尔提到的那些正在做那种工作的人，你知道的，他们的贡献远远超过那些投胎正确的人，或者那些运气好、自认为懂债券套利或其他什么的人。而我，在很大程度上，就是那些人之一。

所以，你真的要努力创建一个社会，在正常情况下，人均GDP超过6万美元，任何每周工作40小时的人都能过上体面的生活，而不需要第二份工作，还能养一两个孩子，并且拥有——你知道的——

他们不能像国王一样生活。我不是那个意思。但是——没有人应该被落下。就像一个富裕的家庭。你知道的，你会发现富裕家庭，如果有五个或六个继承人，他们知道他们会尝试挑选，也许是那个最有能力的人来经营生意。

但他们不会忘记——你知道的——那个可能在某种程度上是更好公民的孩子，甚至比最擅长经商的那个孩子还好，他只是恰好没有那种市场价值——技能。

所以，我不认为一个非常富有的公司应该完全服从——完全服从市场所分配的东西，你知道的，像18世纪风格或类似的东西。

所以，我欢迎朝着那个方向的想法——我们已经朝着那个方向走了——你知道的，我们在30年代确实推出了社会保障。

我们——我们取得了一些进展，但我们应该如此。作为一个国家，我们变得非常、非常、非常富裕。而且我们一直——最底层的20%人口的生活有所改善。我是说，你可以看到各种统计数据。但我宁愿处于——我宁愿现在处于最底层的20%，而不是一百年前或五十年前的最底层20%。

但真正改善的是——（笑）——是顶层的1%。我希望我们作为一个国家，朝着比尔所谈论的那些人得到更好待遇的方向前进。这不会损害——这不会损害国家的增长，而且——

这早就该做了，但很多事情都早就该做了。

我们——我仍然会说我们比一百年前是一个更好的社会。但你会认为以我们的繁荣，我们可以——我们应该——对自己提出更高的标准来照顾我们的同胞，特别是当你看到今天这样的情景时，那些你不知道名字的人，正在看着人们进来，看着尸体出去。

格雷格？

格雷格·阿贝尔：是的，我——我要强调的另一个群体，我认为——这会很有趣地看到结果——是随着大量在家教育和孩子待在家里的情况——我认为有——我们一直对教师怀有极大的敬意，但我们都谈论我们如何没有照顾好他们。

而且，你知道的，听到多少人评论说，显然，我们没有认识到——你知道的，我家里有一个8岁的小家伙——贝克特——在家，妈妈面临很多挑战。但突然之间，你开始尊重教育机构、学校、教师以及周围的一切。

所以，还有——然后当我想到我们的公司和我们的配送员工时，他们所做的一切绝对令人惊叹，他们确实身处前线。你知道的，那是我们在保持他们健康和安全方面面临挑战的地方。

然后你一直看到铁路。我们公司中最好的视频是当我们的员工积极参与运输物资、食品、医疗产品时，他们为此感到非常自豪，并且他们意识到自己在做出改变。

所以，很大程度上，我们欠他们一声巨大的感谢。沃伦，你提到了这一点。我们可以——某种方式——也许，希望长期内补偿他们，但有很多感谢，而且我可能只是认为对各种各样的人有了——一种新的感激之情。

沃伦·巴菲特：我们正朝着正确的方向前进（听不清）国家，但这非常缓慢。

格雷格·阿贝尔：是的。

35. 资本主义需要政府确保每个人都分享繁荣

贝基·奎克：先生们，我把这作为最后一个问题。它来自菲尔·金。他说：“许多媒体和政治人士正在质疑资本主义的有效性。你能对他们说些什么，可能会促使他们更积极地看待资本主义？”

沃伦·巴菲特：嗯，市场体系创造了奇迹。但如果完全放任自流，它也是残酷的。

如果市场体系不被允许运作，我们就不会成为今天的国家。在某种程度上，你可以说，世界上其他那些生活水平显著提高的国家，在某种程度上，也模仿了我们。

所以，市场体系在很多方面都很奇妙，但它需要政府，而且——你知道的——它是创造性的破坏，但对于那些被破坏的人来说，这可能是一个非常残酷的游戏，对于在这些行业中工作的人以及所有类似的事情，所以，我——

我不希望拿出任何不同于资本主义的东西，但我当然不想要不受约束的资本主义。而且——我认为我们不会放弃它，但我认为我们资本家——而我是其中之一——你知道的，我认为应该考虑很多，如果我们再次抽签——针对特定的市场技能——会发生什么。你知道的，这是——

很久以前，有人发明了电视。我不知道是谁。然后他们发明了有线电视。然后他们发明了付费系统等等。所以，那个在1941年能打出0.406击球率的家伙一年值2万美元，而现在一个边缘的大联盟球员，你知道的，会赚多得多的钱，因为实际上，体育场规模从3万、4万或5万人扩大到了全国，而市场体系——资本主义——接管了。

这是非常不平衡的。顺便说一句，我认为泰德·威廉姆斯——（笑）——比我应该赚的钱要值得多得多的钱。

但市场体系可能走向赢家通吃的情况，我们不想阻止人们努力工作、努力思考，但仅仅这样是不够的。资本主义体系中有很多随机性——包括继承的财富——我认为我们可以——我认为我们可以保留市场体系和资本主义的最佳部分，并且我们可以做得更好，确保每个人都分享由此产生的繁荣。格雷格？

格雷格·阿贝尔：是的。不，我认为这总是要保持其最佳部分。我甚至认为，如果我们看看我们当前所处的环境，即疫情中，我们只有在情况允许时才能正确地重新出现，但在某些方面，对人们来说最好的机会明显是我们重新工作时，体系再次运转时，但那是显而易见的，然后，正如沃伦你所强调的，你知道的，有很多不完美之处，但它仍然是——它绝对是目前最好的模式，只需要一些微调。

36. “聪明并不一定等同于智慧”

沃伦·巴菲特：还有，贝基，最后，我只想说——

贝基·奎克：嘿，沃伦——

沃伦·巴菲特：我只想说，你知道——哦，当然，请说。

贝基·奎克：我能——我能只是——

沃伦·巴菲特：当然。

贝基·奎克：——再看一个快速问题。我忘了这个。有人早些时候发来的。谢谢。

安德森·哈克斯顿写道。他说：“沃伦提到本·格雷厄姆是他见过的最聪明的三个人之一。”（巴菲特笑）“我想问他另外两个人的名字。”

沃伦·巴菲特：嗯，我可能不是最聪明的之一，但我足够聪明，不会说出另外两个人的名字。我会让两个人高兴。但是——（笑声）

但我会——这不是——本·格雷厄姆是最聪明的三个人之一，我认识一些非常聪明的人。聪明并不一定——并不一定等同于智慧。

而本·格雷厄姆，他说他喜欢每天做的事情之一，是他想做一件有创意的事情，一件慷慨的事情，和一件愚蠢的事情。

他说他非常擅长最后一件。（笑声）

但他非常擅长——实际上，他令人惊叹——在创造方面。但有趣的是，智商并不总能转化为理性、行为成功或智慧，所以——

我认识一些非常智慧的人，他们在智商测试中排不进前三名。但如果我想让他们在某件事上做出判断，甚至如果我想把他们放在某个负有责任的职位上，我可能会更喜欢他们而不是——我们说是那三个人中的一个。这让另外两个人感觉良好——（笑）——在那三个人中。（笑）

格雷格，你有什么想法吗？（笑声）

格雷格·阿贝尔：没有。我同意你提到的那个人。

沃伦·巴菲特：是的。

37. 结论：永远不要做空美国

沃伦·巴菲特：还有，贝基，我只想说——我只想再说一遍，我们可能——我希望不会——但我们可能还会遇到一些不愉快的意外，你知道的。我们正在处理一种病毒——它以某种方式展开翅膀，你知道的，以非常不可预测的方式，而所有美国人对它的反应，你知道的，有各种各样的可能性。

但我明确得出结论，在权衡了所有这些事情之后，永远不要做空美国。所以，谢谢。

贝基·奎克：谢谢。

沃伦·巴菲特：好的。

贝基·奎克：感谢您今晚的时间。

沃伦·巴菲特：我们明年再见。我们会——我们会把这个地方填满。好的。（笑）

贝基·奎克：好的，大家晚安。