INSUBCONTINENT EXCLUSIVE:
Authors: Super UserNEW YORK: Billionaire investor Warren Buffett and Berkshire Hathaway Inc Vice Chairman Charlie Munger are answering five
hours of questions from shareholders, journalists and analysts at Berkshire's annual meeting in Omaha, Nebraska.
The weekend known as
"Woodstock for Capitalists" is unique in corporate America, a celebration of Buffett's success at a conglomerate whose businesses range from
Geico insurance to the BNSF railroad to See's candies to Ginsu knives.
Below are the comments from Buffett, the "Oracle of Omaha," on a wide
range of topics, which will be updated throughout the day:
ON WELLS FARGO SCANDAL"Wells Fargo is a company that proved the efficacy of
incentives, and it's just that they just had the wrong incentives
The fact that you are going to have problems at some large institutions is not unique I see no reason why Wells Fargo as a company going
forward is in any way inferior to the other big banks with which it competes
We have a large unrealized gain (in the stock)
I like it as an investment
(The CEO) is correcting mistakes made by other people."
ON HEALTHCARE PROJECTWe simply have three organizations with leaders I admire and
trust We have a hugely non-competitive medical cost in American business related to any country in the world The motivations are not
We want our employees to get better medical services at lower cost I think we'll probably have a CEO within a couple of months."
ON GE
INVESTMENT IN 2008"We probably could've extracted better terms
It might have been counterproductive in the end We could have made better purchases 3-4 months later
We didn't push it to the limit."
ON PRICING RISK"The kind of risk that you can't really look up in a book and see actuarially, I enjoy
thinking through the pricing of that We are evaluating things that you don't look up in a book."
ON CHINA-U.S
TRADE"In August, I will be 88, in a year that ends in an 8
Eight is a lucky number in china
The United States and China are going to be the two super-powers of the world, economically and in other ways for a long, long time
We have a lot of common interests and like any two big economic entities there are times when there will be tensions
But it is a win-win situation when the world trades."
"Both Democrats and Republicans basically, on balance, believe in the benefits of free
trade it's just too big and too obvious that the benefits are huge and the world is dependent on it we both may do things that are mildly
foolish from time to time It's really not the worst thing in the world (to run a trade deficit)."
ON BERKSHIRE IN THE FUTURE"I think the
reputation of Berkshire being a good home for companies I don't think that's dependent on me and Charlie."
ON GROCERY STORES"(McLane) is a
very, very tight margin business our competitors aren't making much money either."
ON RISKS OF CYBER ATTACKS"Frankly I don't think we or
anybody else really knows what they're doing when writing cyber (insurance policies)
We don't know what the implications of the policies will be We have a pretty good idea of (the risk of) a quake in California or a
We don't know what we're doing in cyber and we don't want to be a pioneer on this we don't want to be no 1 , 2, or 3 on exposure (to
it)."
ON PRECISION CASTPARTS"It's a very, very good business
Manufacturers are very dependent on both the quality of the parts and the promptness of the delivery
Reliability is enormously important
(Our) contracts extend out many years it's an acquisition with very long tails
Mark Donegan is a fabulous manager, I wouldn't have bought it without him in charge it's got very long tails to the products that are being
developed.""
ON INVESTING LONG-TERM"The overriding question is how is American business going to do over your lifetime"
ON BERKSHIRE
EARNINGS"A new accounting rule was introduced at the beginning of this year and it provides that our equity securities - whether we sold
them or not - are marked to market every day so we can have a gain or loss of a couple of billions of dollars in our equity securities
portfolios that (produces) some very unusual effects from quarter to quarter (the net earnings figure) really is not representative of
what's going on in the business at all."
ON CHARLIE MUNGER"Charlie does most things better than I do."
MUNGER ON BUFFETT BEING
'SEMI-RETIRED'"He sits around reading most of the time and thinking, and every once in a while he talks on the phone
I can't see any difference Warren is very good at doing nothing."
