Berkshire's 2024 annual shareholder meeting: Watch the full afternoon session

So please take your seats. We’re going to finish at 3A, so the sooner we start, the sooner more chance we’ll have to talk about various questions you may have. I just like to follow on, however, with that film we showed just before we left for lunch because it says something about Berkshire. There are, you know, all kinds of public companies and wealthy public companies and throughout America. And there are certainly cases where in one family somebody has made a very large amount of money and is devoting it to philanthropy, or much of it to philanthropy, such as the Walton family would be the number one thing in in in the in Walmart. And certainly Bill did the same thing at Bill Gates did the same thing at Microsoft. But what is unusual about Berkshire is that a very significant number of Berkshire shareholders located all over the United States, not just in Omaha, but the number of different Berkshire holders who have contributed $100 million or more to their local charities, usually with people not knowing about it I think is many multiples of any other public company in in the country. It’s not they’re not more multiple than than you know those put a whole lot into philanthropy and and I don’t know I don’t know the details of the family but but clearly there’s a huge sum of money that that the Walmart family. I’m sure it’s done all kinds of things philanthropic and we’ll continue to do it. But I don’t think you’ll find any company where a group of shareholders who aren’t related to each other. So many of them have done something along the lines of what Ruth did, you know, a few weeks ago, just to exchange a little piece of paper that they’ve held for five decades and they’ve lived well themselves. They haven’t denied their family anything, but they don’t feel that they have to create a dynasty or anything, and they give it back to society. And the great many do it anonymously. They do it in many states to some extent. We see a little some concentration of it in Nebraska because they generally when you when you’re giving away a lot of money they they call it in the philanthropic world, they call it absorption capacity. And truth is, it’s very it’s very hard to give away a billion dollars to $10 at the time to people who are needy or something of the sort. And so large institutions have this absorption capacity, which tend to be universities or colleges or that sort of thing. And and some philanthropies are much more imaginative than others. But the one thing I’ve never well, most of them want to do it anonymously. So I can’t tell. There’s specific stories, but I have to say one thing that was astounding is that that the same day we bought a billion dollars worth of Berkshire Class A stock from Ruth. So that and I guess we were actually buying it from the the school at that point because he’s just given them the And then so the transaction was them, was with them, but Mark Millard in our office bought a billion dollars from them, but they also bought $500 million worth of stock from somebody else that nobody will ever have heard of and in a different state. And and I won’t elaborate beyond that but we have had a very significant number of people and there’s more to come and obviously they had to be people that came in early or their parents did or their grandparents did. But they’ve all lived good lives. They haven’t denied themselves anything. I mean you know they have second homes and they but they they generally well in fact I would say the universally they people knew them in the community and everything but they they’ve they’ve used what they what they saved they denied themselves consumption themselves that’s what savings are is consumption deferred and they’ve they’ve given they’ve financed everything all over the country and usually they like to do it anonymously. I I outed my sister when I wrote about her in the annual report but but earnings here today and I told her she should wear a T-shirt or something said no solicitors allowed or something but they but they just do it and it’s really both Charlie and I thought it’s really it’s really fun to work for a group of people like that rather than for index funds or for for hedge funds or whatever it may be. I mean you’re just seeing what people actually it it sort of restarts restores your your faith in humanity that people defer their own consumption within a family for decades and decades and then they could do something like and they will. I think it may end up being 150 people do pursue different lives and talent of the people and diverse people to become a dream of being a a doctor and and I don’t have to incur incredible death to do it or whatever may be the case. There’s a million different examples and I want you to know that that you’re very you’re very well, you’re a unique actually group of of shareholders among public companies as far as I know in terms of the way you’ve deferred your own consumption while living fine to help other people. And and it, you know, it takes a lot of years but it can really amount to something very substantial. And what Ruth did was, you know, at roughly my age, she looked at a little piece of paper which actually was a claim check on the output of others in the future. And she said instead of the output being for her, that the output would be for a continuing stream of people for decades and decades and decades to come, that we’re having a different life in the pursuit of being becoming doctors than than they otherwise would have. And and Berkshire has been for sure, her husband Sandy contributed substantially to Berkshire’s Berkshire’s record. Sandy was a wonderful partner to have. So he was both input by him and then there was deferred consumption by his family. And then there was ultimately this final gift to Albert Einstein. And like I said the same day, there’s only 500 million who will go in a different way. But it’s happening all over and I don’t think any, any companies like that. So I just want to tell you that it’s inspiring to work for Super Showers and Becky, go to it. All right. The next question comes from Slavin Vukelbrat. As CEO. Will Mr. Abel be in charge of the portfolio of common stocks that Mister Buffett has been managing or will this function be exercised by Mr. Combs and Mr. Weschler as investing could be defined as the discipline of relative selection. Can major capital allocation decisions such as large acquisitions be separated from the common stock selection process? Yeah, I would say that decision actually will be made when I’m not around and I may try and come back and haunt them if they do it differently then. But I’m not sure the Ouija board or they will get that job done. So that job I’ll, I’ll never know the answer on whether it got covered, but I feel very comfortable about the fact that it will be made by a board that they’ve got loads of brain power, they’ve got a dedication to A to an unusual institution and they will figure things out. But I would, I would say that if I were on that board and were making the decision, I would probably knowing Greg, I would I would just leave. I would leave the capital allocation to to Greg and he understands businesses extremely well. And if you understand businesses, you understand you understand common stocks. I mean if if you really know how business works, you are you are an investment manager what what, how much you manage maybe just your own funds or maybe other people. And if you really are primarily interested in in getting assets under management which is where the money is, You know you don’t really have to understand that sort of thing. But but that’s not the case with Ted or Todd obviously. But I think the responsibility ought to be entirely with Greg. The responsibility with has been with me and I farmed out some of it and I used to think differently about how that would be handled. But I I think the responsibility should be that of the CEO and whatever that CEO decides may be helpful in in in effectuating that responsibility. You know that that’s that’s up to the Amber Heard decide at the time they’re running the money. But so I would say that my thinking on that has has developed to some extent as the sums have grown so large at Berkshire and we do not want to try and have you know 200 people around that are managing a billion each. It just doesn’t work. And I think that when you’re handling the sums that we will have, you got to think very strategically about how to do very big things. And I think Greg this capable of doing it. I think I’ve missed a lot of stuff in the past. So I’m actually wiser about doing that now. But I you know, I would do it better this time around than 2008 and 9 if something akin to that happened. But it won’t be exactly like 2008 or 9. You can be sure of that. But you also can say that there will be times when having huge sums available extremely quickly. Maybe it’ll be once every five years, maybe it’ll probably be more like once every ten years or something. But the way as the world gets more sophisticated complicated and and intertwined more can go wrong. And and there’s no sense going through here exploring the possibilities that every things that could happen. But you would do want to be able to act when it happens and I think the chief executive should some be somebody that can weigh buying businesses buying stocks doing all kinds of things that might come up at a time when nobody else is willing to move. It wasn’t that people didn’t have money in 2008. It’s it’s that they were they were paralyzed and and we did have the advantage of having some capital and and a willingness to an eagerness even to act and the government that that in effect looked at as us as an asset instead of a liability. And I think that all of those qualities will be even more important as our capital pile grows. And so I think Greg may have even more fun than I had in in a period when extraordinary things were happening and and we were the logical place to go it. You never know whether it’ll be next week, next year, next decade. But you won’t be. You know it won’t be a century from now, that is for sure. And the more intertwined and sophisticated the world financial situation gets, the more vulnerable it gets. In a certain sense it it solves a lot of small problems, but it leaves it more vulnerable to large problems. Greg, does that bother you at all or not with without directly answering the question, I think there’s one important thing is I think as we go through any transition, it’s important to know that the capital allocation principles that Berkshire lives by today will continue to survive Warren. And I think that’s what the thing I’d want to communicate that will we have our operating businesses insurance, non insurance, we’re going to cap that. We’ll provide them the capital necessary to be successful and grow if it’s appropriate. At the same time, we’re expecting a return of capital from them when they have excess cash. And then as we’ve discussed or you’ve touched on always looking at potentially new businesses as a whole or in a piece and as you’ve always highlighted and I fully agree it’s we’re, we’ll always look at equities as we’re investing in a business either 1% or 100%. But we’re looking at the business, we’re looking at the economic prospects of that business and how sustainable it is and what it will look like 10 years from now. And is our the capital we originally put in at exponential risk or or where where’s that risk set that profile. And then of course and then we’ll obviously have our, our, our, our continue to always put excess cash in the safest investment there is in in U.S. Treasuries knowing we want to maintain that fortress of a balance sheet for two reasons one to act but also to always protect our shareholders. If we have a, we want to maintain the position Berkshire is in now realistically for the to insure the to insured injuries. Well when he says that, it makes me wish I’d stayed around to be #2 instead of #1 in this process over the years. It it’s it’s you know it it doesn’t get more fun than what we what we’re doing and and and and we’re better positioned than ever before. We’re not positioned no however to earn extraordinary returns versus what American business generally earns. As I’m you know I would I would hope you’ll be slightly better but nobody’s going to be dramatically better in some you know over the next century. It gets very hard to it gets very hard to predict who the winner will be in. And if you look back as we did in a few meetings ago as the the top 20 companies in the world that at 10 year intervals you realize the game isn’t quite as easy as as it looks. But getting a decent result actually is reasonably should be reasonably easy. If you just don’t get talked out of doing what hasn’t worked in the past and don’t get carried away with fads and don’t, don’t listen to people who have different interests and and mine and the the interests of our shareholders. OK, We’ll go to station #1. Hello, Mr. Buffett. My name is Tomo Drewger. I’m from Diesel of Germany. This is my first time out here in Omaha. So thank you for having us here today. So my question is directed to you, Mr. Buffett and Mr. Abel. In 2019, you reportedly made a bid for the IT distribution business, Tech Data and commented that you understand its role as a middleman. I wonder if you could kindly elaborate on the criteria you look at when evaluating IT distribution businesses like Tech Data and their competitive position. Thank you. Well, we had some experience with distribution businesses and we know their potential to a degree in their limitations and. Greg you were involved in that more than I was. So that I mean that was a case where there ‘d been a bid made and there was a gold shop provision and and I think the management probably would have preferred that we buy it and and when we went in with a better bid, the original party raised their bid and and we never make the same offer twice. So Greg telling me about, yeah, so absolutely in 2019 we saw Tech Data as a unique opportunity when we saw the other bid and and the underlying value of that distribution business, we did Warren, Warren and I were talking, others made the conclusion we should talk to management. We talked to the team, they were very interested in Berkshire being their long term owner and we still saw a good value in the in the opportunity and we had a good understanding of distribution businesses. We have TTI. It’s not exactly identical to Tech Data in that they’re very specific to The Who their customers are and who they serve and supply and who they purchase from. Because on the distribution side, it’s important to have that input coming in from from folks you want their product and you know it’s needed. On the other side that there’s demand for it and they have, they have an excellent model. If you think of TTI for example, that warns Dr. Bo Paul many times and the person who founded this business. But but it’s a unique business in that our revenues on that business is approximately $10 billion. The average part they sell is a little over $0.09, 95 billion parts go through their warehouse every every year. But it’s a model that if you have the right people on both sides of the equation and you understand that well, there’s there’s a unique opportunity there. And and that is something we saw in in Tech Data and and as Warren highlighted, we made our bid. Unfortunately, it was then taught by the original bidder and we moved on, but we we thought very highly of it. We’ve probably seen at least five of them in aggregate that over the last three or four or five years. It’s not a business that you can dream about because it’s a it’s a decent business but for example many of the items that the manufacturer just they don’t want to tie up their capital. You tie up if you have you know a million plus SKU. This is the whole stocky bee is it’s like selling Jelly beans or something like that and and and and you do you’re serving a purpose to a degree but you don’t you don’t really it isn’t your product in in in effect I mean you’re just a good system for the producer of the equipment to get it to the to the end user without tying up a lot of capital right being in a business they don’t want to be in and so we we we understand we we we we. But there’s no magic to it. There was a with with TTI you had a marvelous man running things and and and you know and he’s and he he, he. When you get a marvelous person running something to some extent that’s the lunch for for better people underneath. Greg and I went to Paul Andrews, Andrews Funeral, but a few years ago and there were 300 people or so there and there wasn’t one person that had to say something particularly nice but stretched a little bit about about the deceased. I mean, everybody. Paul Andrews was the Real McCoy and he was, he was an amazing man and he behaved wonderfully with Berkshire. I mean he wanted to do more for Berkshire than Berkshire would do for him. I mean it was very simple and you run into those people and as I say you run into people that bend over backwards for us and then some bend over forwards. But that’s just the way it is in this world and we’ve had, we’ve had quite a few that have been over backwards for us. And the distribution business is not a wonderful business but it is a business and it’s a business that that if it’s big enough it’s one we would look at and we would buy additional and TTI make some small acquisitions on its own all the time. I don’t even, I don’t even hear about them until I read the quarterly reports. And so we we we want to build up, we want to build our businesses in every area that we operate and we’ve got unlimited capital to do it. So. So we we’re we’re willing to have small acquisitions take place if they fit in with something we already have but we’re not in the business of going out after small acquisitions and if we did we would we just don’t have the people for it and it wouldn’t move the needle anyway at Berkshire. So we mayor we we would we would have been happy doing the deal with the questioner asked about but if we don’t do it, you know it just doesn’t make that much difference. We want to do it. If we do it, we’ll do it well we’ll do it right. They’ll have made the right decision. If they don’t, you know, we will find something else to do with the money in the end. And and we can always buy a little more of TTI for you, the shareholders, by just buying in our stock too. Exactly. Yeah. OK, let’s see. We need Becky next, don’t we? Yeah. Becky. All right. Warren, earlier you you talked about selling some of the Apple shares in order to build up your cash supply. And I think it’s had a lot of people wondering what where you see opportunities or what might be coming or market valuation. So I’ll ask this question from Foster Taylor. At the 1999 Annual meeting, you mentioned that if you owned all of America’s 500 businesses, you would be making $334 billion while paying 10 1/2 trillion dollars. You emphasize that this was not a good return on investment. Today, by my math, the S&P 500 has a market capitalization of around 44 trillion with profits of around 1.45 trillion. This is a very similar return on investment to the 1999 levels. Do you see similarities in the market today and the 1999 levels? Well, one thing has changed dramatically from, well from 1990. I misunderstood on the 1999, but there have been times in my life that I’ve been awash in so many opportunities that I could have invested everything by nightfall. And then there’s other times when the year goes well, not in the early days, but now we we just we haven’t seen anything that makes sense that’s that moves the needle. Now we’ve made small acquisitions during the year. Our companies have made acquisitions and and we, you know Greg and I may talk about something that involves a $300 million purchase or something like that. And you know if if it fits well enough, we do it. But and if our managers see things that fit them, we want to look at them because our managers do not have necessarily the same equations in mind that we do. But there’s some managers which we would have them just say, you know, whatever you decide to do. And then there’s other managers that wouldn’t, that would not know how to allocate capital particularly. And that they don’t have to be able to be great capital allocators if they happen to be great at serving customers and understand their own industry and all of that. You know they can be great managers but many of them aren’t capital allocators and others are. But the this is not, this is not a time when when the phone is going to be ringing often but there are times from that and Greg will know how to handle them and as well or better than than I have over time and Charlie and I wouldn’t you know we we missed a lot of things and what we really regretted was missing something that do not be very big. We never, we never worried about missing something that we didn’t understand. I mean you know why? Why should we be be able to you know predict the future of every business any more than we can predict you know what what wheat eels are likely to be in Illinois next year. Well, not Wheaton, IL, Wheaton, Kansas, but Cornyn, Illinois. So I I wouldn’t, I don’t really think of whether it’s similar to 1999 because I’m not that good on chronology anyway, unless something really dramatic happened at the time. I mean, I remember things from 2008 and 9 better, much better than I remember whether something happened in 2015 or or 1987 or well, 1987, I remember because of October 19th. But. But I’m, I’m, I just don’t think. I don’t think that way. I just look at what I can do every day. Greg. I’m going to have to use it. Nothing. Sorry. Nothing to add. OK. Well we’ll go to Station 2. That’s I mean, it’s nice to know what lines you can get. An applause for Session 2. Hello, my name is Stefan Wuenbaffer. I am a shareholder from Hamburg, Hamburg, Germany. I’ve been coming to Omaha since 2007 and I’m deeply grateful for all the things I could learn here, both about investing and about life. In particular creating circumstances that will enable me to lead a productive life during my entire healthy lifespan. Thank you for that. My question. My question to Warren, your favorite holding period is forever holding American Express or Coca-Cola for decades. Berkshire recently went in and out of Markell and you I believe sold and later bought Oxy, which I think happens to everyone all the time. But can you maybe to us, give examples of your thought process when you exit positions? Thank you. Well, there are various reasons for exiting positions. One is if you need the money, but that doesn’t happen very often with us. But it used to happen on every decision I made when I started when I was 20 years old, which I consider the Pulse, Graham Burien, although I actually started in 1942 if you just talk about buying stocks. But in any event the the decision process is is really quite interesting in a certain way because it it we we made Charlie and I made decisions extremely fast. But in effect after years of thinking about the parameters that that that would enable us to make the quick decision, one the one that presented itself and people speculated on how I’ve decided to really put a lot of money into Apple and for a reason. I can’t. One one thing that Charlie and I both learned a lot about was consumer behavior. That didn’t mean we thought we could run up a furniture store or anything else. But we we did learn a lot when we bought a furniture chain in Baltimore, and we quickly really realized that it was a mistake. But having made that mistake made us smarter about actually thinking through what the capital allocation process would be and how people were likely to behave in the future with department stores and all kinds of things that we wouldn’t have really focused on. So we learned something about consumer behavior from that. We didn’t learn how to run a department store Now. The next one was See’s Candy. And See’s Candy was also a study of consumer behavior. We didn’t know how to make candy. You know, we didn’t. There were all kinds of things we didn’t know, but we’ve learned more about consumer behavior as we go along. And that sort of background in a very general way LED up to the side of consumer behavior in terms of Apple’s products. And in that case, while I watched what was happening at the Furniture Mart in terms of people leaving the store, even though we were selling Apple a price where we weren’t even making any money, but it was just so popular that if we didn’t have it, people left the store and went to Best Buy or someplace. And and if you know the bumpkins, they can’t stand anybody leaving the store. So yeah, they behave accordingly. But then you learned that had the interest in the brand and then you had the 1,000,000 different inputs. But I think the psychologists call this a perceptive mass. But there is something that comes along that takes a whole bunch of observations that you’ve made and knowledge you have and then crystallizes your thinking into action, big action in the case of Apple. And there actually is something which which I don’t mean to be mysterious but I really can’t talk about but it was it was perfectly legal everything I’m sure you hear that but it it just happened to be something that entered the picture that took all the other observations and and I guess my mind reached what they call a perceptive mass which I really don’t know anything about but I but I’ve I, I know the phenomenon when I but I when I experience it and you know that is we saw we saw something that I felt was well enormously underpriced. Maybe I’ve used this example before but if you talk to most people, if they have an iPhone and they have a second car, the second car cost them 30 or $35,000 and they were told that they never could have the iPhone again or they could never have the second car again. They would give up the second car but the second car cost them 20 times. The iPhone did. So now people don’t think about their purchases that way but but but I think about their behavior and so we just decide without knowing I don’t know the faint there may be some little guy inside the iPhone or something. I I have no idea how it works, but I also know what it. I know what it means to people and I know how they use it. And I think I know enough about consumer behavior to know there’s one of the great products maybe the greatest product of all time and the value it offers is incredible. And I think it has and Tim, Tim Cook I think it has somebody that in in his own way is the equivalent of a partner partner with Steve Jobs that could do one thing extraordinarily well and and more than one application but one thing and and and and Tim was the perfect partner to serve sequentially with him. So it it’s you sort of know it when you see it. I I actually saw it with GEICO when I I went there in 1950. I didn’t know exactly what I was seeing, but Lorimer Davidson on a Saturday in four hours, taught me enough about what I understood, what auto insurance was. And I knew what a car was. And I knew what people went through people’s minds And I know. I knew they didn’t like to buy it. Well, I knew they couldn’t drive without it. So that was pretty interesting. And then, but he filled in all the blanks in my mind as I sat there on that Saturday afternoon. And you know, every now and then it happens. You know, why do you have this, the person you met, You know, there are all these, all these different potential spouses in the in the room. And then something happens that you decide that this is the one for you. You know I think it was Rodgers and Hammerstein that that some Enchanted Evening wrote about that. Well our idea of Enchanted Evening is to come up with a business of now Charlie and Baby and and there is an aspect of of knowing a whole lot and having a whole lot of experiences and then seeing something that turns on the light bulb and that will continue to happen and I hope it happens a few times to you but you can’t make it happen tomorrow but you can prepare yourself for it happening tomorrow and it will happen sometimes. Hey Warren, he he mentioned Oxy which I think is a great example where you made the original decision basically on a a weekend with some thought but as the more you learned about Oxy and the the the asset position they had. Their their ability to operate in a in a in an exceptional manner and then a strong CEO around capital allocation. I think your confidence in which was reflected in continuing to acquire more shares. It’s sort of that type of process. Yeah, it’s it’s it’s exactly to the point. I mean I just learned more as I went along. I learned enough you know I’ve never I’d heard of Occidental Petroleum. Occidental Petroleum happens to to been a descendant to something. Not a descendant but but it’s a continuation of city service which was the first stock I bought. And of course I I knew a lot about doing on a gas business but but I didn’t know anything about geology and so I I knew the economics of it. I I had a lot of various things stored in my mind about the business. But I never, I never heard of Vicky until I guess it was a Friday or a Saturday and we met on Sunday morning. We made a deal, but that was one sort of deal. And then I as time passed, all the kinds of different events happened and you know, Icon came in and I mean there are 1,000,000 things you couldn’t predict at the start. And and I formed certain opinions as I went along. But then AI learned more as I went along. And then at a point when I heard an investor call that Biggie was on it, it it put things together for me in a way. Didn’t mean I knew I had a sure thing or anything like that. I don’t know what the price of oil was going to be next year, but I knew that it was something to act on. So we did and we’re very happy we did and we still don’t know what the price of oil is going to be next year and know what he does. But but I think it the odds are very good that it was and but not a cinch that it was a good decision and you know we’ve got options to buy more stock and and you know when we get through with it we could it could be a worthwhile investment for for Berkshire and and we’re in it and we’re in it for keeps and there are other things that we own that we aren’t in for keeps that coincidentally I I should just throw this out since there’s been speculation on it. We’ve sold AI was 100% responsible for the Paramount decision. I read speculation that that one of either Ted or Todd had some involvement of that. No, it was 100% my decision and we sold it all and we lost quite a bit of money and and and that happens in this business too. But actually owning Paramount made me think even further. I like to think deeper, but I certainly won’t look harder even about about the whole question of what people do with their leisure time and and you know what the governing principles are of running an entertainment business of any sort whether it’s sports or movies or whatever it might be. And I think I’m smarter now than I was a year or two a couple years ago, but I also think I’m poor because I acquired the knowledge in the manner I did. But if if I just want to be very clear that if that A, we lost money on Paramount and B, you know, I did it all by myself, folks, I don’t know whether I’ve anticipated one of Becky’s questions now, but we’ll we will, we will find out. Let’s see now. Yeah. You’re next, Becky. Yes, you did anticipate one of the questions. Let’s go to another one. This this question comes from Vincent James in Munich, Germany. And the Chairman’s letter. Warren points out that the profit margins for BNSF have slipped relative to all five other railroads. However, Warren comments in the letter, BNSF carries more freight and spends more on capital expenditures than any of the other five major railroads and has a vast service territory second to none. Given the comments from Warren about the clear strengths of BNSF, what explains the decline in revenue and profit and in particular the profit margins relative to the other five railroads? What are the issues relative to the other railroads and what is being done to address them? Please be specific. OK And I will well how specific we get depends on what Greg wants to say. But Greg is that it’s Greg’s responsibility, it’s my responsibility for the purchase and for the operation up till Greg took over. But I think I’ll let Greg answer that and yeah they’re the the Warren touched on it and the comments from the as reflected there are are very accurate. If you look at this quarter’s results or our last year’s results, they were both they’re disappointing as shareholders and disappointing in the relative relative to the other Class 1 railroads and as highlighted in the question there’s five other Class 1 railroads. So it’s pretty easy to understand how you’re performing versus the others in it and there’s a lot of other variables, but there’s some very simple things to look at. When we look at where we’ve been on with associated with Burlington, I would I would just back up a little bit because if you go back to 2021, the Burlington team and management team in the group, we’re making excellent progress on a lot of fronts when it comes to our operating and both being efficient and effective in how we’re operating the railroad. And I remember very specific comments from myself in 2022 where I commented that that was the year there was all the supply chain issues, a lot going on in the West Coast ports. Our trains were backed up in a variety of places and we called that a reset year and I think we did need a reset year on the operational side. But as we moved into 23, the business cost level cost structure, we didn’t reset it to the underlying demand we are seeing. We anticipated more demand and the and we did not reset our cost structure and the team’s working very hard as we speak to do both reset the cost structure and allocate the cost resources where they need to be. And and when you go through something like that what we’ve recognized as an organization, yes the the demand of the rail will will drive a certain amount of the cost. But the the reality is that the rail industry if you go back many, many years it’s it’s it’s flat. There’s not a lot of growth in the industry. There’s opportunities to become more efficient, effective and our margins can go up. But the reality is the demand demand’s going to be flat, but it does move within different sectors of the rail. It can be in the consumer products, it can be an industrial, it can be an egg. But overall it’s generally going to be relatively flat. So we need to get our cost structure right and we need to get it right both for the the coming year but for the long term. And that means it’s going to be a continuous exercise. We can’t stop, we can’t say we we’ve gotten far enough because our competitors and we compete with the other rails, but we also do compete with the truck industry. We have to have a cost structure allows us to compete both within our rail industry and within the transportation sector as a whole. So the team at Burlington’s working very hard to address the cost structure just like we have in the past. I think one thing we do recognize when the other railroads have implemented precision scheduled railroading, there’s other metrics that we have to continue to pay attention to and and challenge ourselves. If we’re not at their level, what are the things that are driving it. So we’re going to, when they ask for specifics, I’ll give you a few. We have to look at our rail yards and understand how we’re, how we’re managing that. We have to look at our locomotive fleet, both the size and how we’re utilizing that and challenge ourselves and we have to then go back to how we’re using our employee resources and allocating them across the the business. So there’s a lot to be done there. Our team’s 100% committed to driving to the right cost structure that’s consistent with the underlying demand in the business. And and then we can’t stop there is the is the answer. So a lot to be done but we have a A-Team that’s absolutely engaged and committed to it and we’ll make, we’re going to make good progress in the in in this current year at Berkshire. We want everybody to have the idea that there’s a lot to be done with every business you know so I mean it is we they’re the only big key with the remarkable remarkable company in Omaha building company really remarkable and this is question after everything they did that one something that was done particularly well you know digging a tunnel under the East River or something when it said it couldn’t be done, he would say it would be he was pleased but not satisfied and that is exactly the way we want the attitude to be at Berkshire forever. Omaha is a railroad town. If if President Lincoln in 1862 I think it was, has decided to pick Saint Joe or plasma there any place else to build the transcontinental railroad. Omaha would probably be a little town of 20,000 or something on the banks of the Missouri. But but making with Lincoln’s desire to make this the Eastern eastern connection, make a transcontinental railroad, Omaha just took off. So it’s been, it’s been, it’s been railroading at its base. The you know and anybody that’s interested in financial matters had to think about railroads. Plus they had a certain glamour to them anyway. But the interesting thing is that UP, which is our main competitor themselves, fell way behind 20 or 25 years ago, before Jim, before Jim Young came in and in 2000 whenever it was 8 or so, I started buying 3 railroad socks and and Union Pacific, BNSF and and Norfolk Western, I believe. I don’t know why I wasn’t buying C&O, but in any event Jim Young had done a marvelous job with being with the Union Pacific. So we we were on all three stocks. But what we did in 2009 is we were able well we already own 22% of it, but overall it was $35 million, a billion dollars which was a significant part of our capital. We were able to put it to work in a in a business we liked and we there’s certain tax advantages that come in terms of making money and something that’s more than 80% owned, but call it 100% owned in this case versus making it through stocks. So it has a a net benefit to us from making the same amount of money owning one of the other railroads by owning all of the railroads and we got 35 billion out during a recessionary period. I think that was the worst quarter, the third quarter of 2009 maybe the rails that had for a long time. So it’s it’s worked out actually it’s worked out very well, but it’s because we we were putting out capital in 2008 and 9:00 and if we put put money in anything we’d have made a lot of money. But it’s more satisfying and it’s actually better in certain ways tax wise. You’ll make it from something that’s 100% owned at all, but a bunch of, you know, 5% or 10% owned businesses were, you know, as I mentioned in the annual report, railroads are absolutely essential to the country. That doesn’t mean they’re on the cutting edge of everything. They’re just essential to the country and you know it it. That’s why the government, you know, I think they took them over one time and they then they negotiate what our level of Labor settlements will be and everything and and if you shut down the railroads of the country and it it would be incredible the effects but and it would be impossible to construct Now I mean if look at what’s happening in California when they’re trying to build the line. I mean, you know, everybody’s worried about the environmental effect of of every mile and you know and what’ll happen to the various species of birds. Can you imagine the rail system, the United States being built? It would it would take decades unless the war was on and the government took over things and just ordered them it can’t create it. So we love owning a business like that. It’s going to be around 100 years from now won’t be the best growth business in the world at all growing up very literally essential and and what it earns and its relation to its its its replacement value as a pittance. But we’ll do fine in terms of what we paid for it and we’ll we’ll distribute substantial amounts in relation to what we paid to Berkshire and in a very tax efficient way. And so it’s it’s and well the question is what are the issues relative the other railroads. You know, it wouldn’t have been the end of the world if at all. If we bought the Union Pacific and Jim Young had stayed alive to run it for us, that would have been great too. But but we had the opportunity to to buy BNSF and it’s been good for them and it’s been good for us. And we think it’s been, it’s a very important asset to the country. And you know, I just hope we can find something in other industries that where it makes as much sense as that, where we can put a whole bunch of money then to work at an advantageous time. So let’s go on to Station 3. Is that correct or not? Yeah. Yeah. OK. Kira. Kira. Good afternoon, Mr. Buffett. Mr. Abel, My name is Syrup Wu, our resident of New Zealand but originally from Thailand. This is my first time in America and the first time attending the meeting. The journey was quite rough. But it was all worth it though, because I can now personally thank you Mr. Buffett and the late Charlie Munger, while he is still with us for organizing such a wonderful event and most importantly for being such an exceptional role models and sharing your wisdom with us all these years. So thank you. Thank you for coming. So here’s my question for you, Mr. Mr. Buffett. Towards the end of 2018, you mentioned that you guarantee you could make a 50% annual return if you had to start again with under $1 million. The question is if tomorrow you woke up in the body of of of 20 year old American, but that’s fine and your name was now Warren a la carte and you have some money to invest on a full time basis. What method or methods would you use to achieve that return? Would it involve flipping through 20,000 pages of Moody’s manual or similar publications or finding, you know, you know to find cigabytes or would it be hunting for great companies at a fair price as Mr. Monger would Or would it be a combination of both with opportunity costs serving as the final arbiter of which method to use given that your investing opportunity has now brought in significantly? Thank you Cop and cop. Good question. I’m glad you came. And they the answer would be in my particular case, it would be going through the 20,000 pages. And since we were talking about railroads, you know, I went through the Moody’s transportation manual a couple of times. That was 1500 or 2000 pages or probably 1500 pages. And I found all kinds of interesting things when I was 50 or when I was 20 or 21. And I don’t imagine here there’s anybody here that knows about the Green Bay and Western Railroad Company, but there were hundreds and hundreds of railroad companies. And I like to read about every one of them. The Green Bay and Western in those days, everybody had a nickname for, for railroads. I mean that was that was just what Northern Pacific was the Nipper and you know the Phoebe Snow was well, I’m in the East that used to go up to Cornell and the Green Bay and Western was known as grab baggage and walk and GB and W and they had an, they had a bond that was actually the common stock and they had a common stock that was actually a bond and you know that that could lead to unusual things. But they wouldn’t lead to unusual things that would work for you with many millions of dollars. But but if you collected a whole bunch of those, which I set out to do and actually that’s what impressed Charlie when I first met him, because I knew all the details of all these little companies on the West Coast that he thought I would never have heard of. But but I knew about the Los Angeles, the Athletic Club or whatever it might be. And he thought he was the only one that knew about that and that that, that that became an instant point of connection. So to answer your question, I would, I would, I don’t know what the equivalent of Moody’s manuals or anything would be now, but I would, I would try and know everything about everything small and I would find something. And with $1,000,000 you could earn 50% a year. But you have to be in love with the subject. You can’t just be in love with the money. You really got to just find it like a, you know, essentially like, you know, people find other things in other fields because they just love looking for them. A biologist looks for something because they may, they want to find something. They and it’s built in. I don’t know how the human brain works that much and I don’t think anybody understands too well how the human brain works. But but there’s different people that that just find it exciting to expand their knowledge in a given area. We, you know, I know great British players, I know great chess players. Actually Kasparov came to Omaha and met Mrs. B. I’ve had the luck of of meeting a lot of people that are unbelievably smart in their own arena and do some unbelievably dumb things in other areas. So all I know is the human brain is complicated and but it does its best when you find out what your brain is really suited for and then you just pound the hell out from that point. And that’s what I would be doing if I if I had a small amount of money and I wanted to make 50% a year. But I also wanted to just play the game, and you can’t do it if you really, if you don’t find it, the game of interest, whether it’s bridge or whether you know whatever, it may be chess or in this case, finding securities that are undervalued. But it sounds to me like you’re on the right track. I mean, anybody that’ll come all the way to this annual meeting, that’s something in their mind other than bridge or chess. So I’m glad you came and come again next year. And now we move. Now we moved to Becky. This question comes from Denny, Poland, a shareholder from Pittsburgh. When describing the principal agent problem, Mr. Munger said that capitalism often works best when the people managing the property also own the property. In recent years, agents of pension funds and asset management firms who do not have significant personal ownership stakes in Berkshire have forwarded proposals that were not in the economic interest of shareholders. What can be done to limit the negative influence of these agents in the decades after you’re no longer able to cast significant votes against them? Well, that’s that’s a very perceptive question and and it’s been answered in a temporary manner but but but who knows what these, how the situation will develop in the future. All I know is that you have a wonderful hand at Berkshire Hathaway, but you have to, you have to be able to think your way. I mean, obviously you have to think your way through political realities or you have to think your way for what will cause. You want a you want to be on, you want you. You want to be regarded as an asset to the country because you’ll find more solutions if you are an asset you owe to the country anyway. But but they are met. You’ll you’ll find more solutions in it if you’re regarded as evil or or something and where she had it if you deserve it. So it it it’s it’s it’s something that’s constantly in her mind, and it needs to be in the mind of the directors and they need to think for themselves on this rather than bow to conventional wisdom, which you know in, in a sense you don’t want to become a cynic about life. But almost everybody that approaches you, if you have tons of resources, is it’s got some interest in figuring out how to use your resources to their advantage. And that’s true whether they’re in politics or whether they’re in investment banking or whether they’re selling you well, whatever it may be that they’re selling. I don’t want to do any injury to anybody, but. But, you know, life insurance agents see the advantage of buying life insurance and and investment managers who get paid based on assets managed get interested in selling you their services. Imagine if everybody in this room were following the investment advice of somebody that said, you know, for 1% a year, I’ll tell you how to invest your money. And in 1950, when we started in 1965, they would have, they would have said, well buy Berkshire has a way in. And if they were around now and they saw their 1% deal, they’d be collecting $8 billion a year from people who aren’t getting any dividends from us. So yeah, they they would have a different interest in in the kind of contract they worked out with you than you would have and best thing to do with just pay him a Commission one time and own the stock. But you have to be alert to how what human nature does to both other people and to you. And then you, you know, if you think it, if you think it through well and they actually listen to what Charlie is told you, you’ll have a big head start on most people. Charlie, there’s one thing that I should mention that really is terribly interesting about CC knew the importance of psychology and human behavior and incentives and all of that. He he figured that out very early. And of course he gave some talks even on, you know, 25 or so ways, whatever it happened to be. I don’t remember the exact number, but the different ways that one person could take advantage of another by understanding how humans behave. And then after doing a magnificent job of explaining it, he believed in understanding what others would do, but he thought it was beneath him. And to actually use those methods to manipulate people, that’s really interesting. Human being that thinks through the psychology of human behavior and figures out, you know, how you become a great insurance salesman or manager on Wall Street or accumulative assets under management or whatever it may be. And you get very rich by understanding the weaknesses of others to some extent. And then decide that it’s very important for you to recognize these when they occur. It’s very important for you to know them better than the person that actually is using them but not but you don’t have to stoop to using them yourself and and Charlie told me that that, you know in his lifetime after he figured this out, there were a couple of times when he used them. He wasn’t proud of it but he also never lied to me. So he he explained to me that you know, there were a couple of times when he used some of these techniques but but he it wasn’t. He didn’t plan on using them anymore. But but he also wanted me to know that if if if I ever did something like that, I wasn’t really behaving terribly that he he allowed for. He allowed for the fact that humans, humans may misbehave. So I’m sure that I behaved somewhat better before my marriage and I did afterwards in my enthusiasm for different activities at night dancing or something. And and and he said that’s, you know, we all do it but don’t do it again. So that’s that’s part of acquiring human wisdom. And Speaking of human wisdom, we’ve just got that one book out there by Charlie, I mean poor Charlie’s Almanac and that’s worth reading three or four times, I think. I read Ben Graham’s book about five or six times, and each time I read it, I realized that I just needed to think a little more deeply about certain things. They weren’t complicated or anything, but you know it. It’s better to if if you’ve got some great instruction like you get with Charlie, it’s better to read it several times than to just figure you’ll just read every book once and it’s in the library. OK, let’s go to Section 4. Jeff Robelier from Tulsa, OK And I’m thinking of Doctor Graham, Mr. Munger, your father. And my question is for all of us, but it’s probably, especially for the younger people in the room, the importance of picking the right heroes in life, choosing friends wisely and maybe tell us a story, if you could, about each of those folks. Thank you, Sir. Well, there’s no question you’re 100% right in terms of of having the right heroes. And you know, you’re you’re lucky if you get them. I mean, Charlie had Charlie, Adam, I Adam. And the interesting thing my sister is here today, my younger sister, that with the two survivors and we both experienced having the same hero, even though as we grew older we saw that we didn’t agree with plenty of his ideas, but we did agree with his values and motivation. And that’s that’s a better lesson than having somebody that reading to you from the catechism that is has got a lot of rules in it, which are pretty good rules, but but there’s a special, special place for somebody that that is going to continue loving you even if you break some of the rules. And that’s what Charlie had in his life was what Bernie and I had in our life. So, so I would. I would just repeat what you said. I’m don’t need to give you a bunch of well, I’m when I ran away from home. I’ll give you a specific example with me. When I ran away from home and went and we hitchhiked up to Hershey, PA and got picked up by the state police and everything. And I talked these other two guys into it and we lied like crazy to the state police, you know, saying we had our parents permission some some, some kid at the place where we stayed and kept them off, that we’d run away from home. And we started like I said, when the state police picked us up, we decided that two things, you know, we decided to tell them much of lies about the fact we had our parents permission and we decided we’d better get out of Hershey because these cops were going to find out sooner or later. And so anyway, we end up back in Washington after a couple days. And when I walked in the door, well, one of the boys, mother, and this other kid was the congressman, Roger Bell, and his mother was in the hospital over this whole thing. He’d taken out his cash and his savings bonds. And so she was, I can judge Bell. Her husband was all concerned and everything. And I walked in the door and in Washington and my mother said, how come he came back so soon. And my father said he, he said, I know you can do better. And and I just paid more attention to my father than my mother. And so you want to have the right heroes and you don’t have to have them. It’s not the heroes based on what they’ve accomplished. And it’s it’s just, you know, it’s it’s it’s it’s it’s the people that you want to be yourself. And if you if you copy the right people, you’re off to a great start. And I don’t mean a great start about making money. I mean a great start about living your life. So you can check with my sister Bertie who’s here, and see if I’ve told the story correctly. She ran away from home too, incidentally. But but she didn’t get as far as I got. But she was running away to go over to my grandfather’s house which was about two miles away and but I don’t want to denigrate her runaway A bill at least because she she was much more accomplished than than I am and all kinds of other things. But when it comes to running away, I I definitely outclassed her. OK, let’s go to Becky. This question comes from V Dance Sharma in India. Warren, you and Charlie have often said that you were able to identify the people you want to go into business with and have had an exceptional record in that. However, in the case of Pilot, we noticed that the final stake purchase ended up in a dispute and had a sense of smart accounting to put it one way to squeeze a a little more out from the deal than was deserved by the seller. Knowing well that this has been settled out of court and needs due confidentiality, I would like your views on some of the lessons learned that may be beneficial for future deals to watch for and for coming leadership to look out for as well. I’ll make two comments on it. A couple of the directors had our doubts about their doubts about going in and in any event Pilot is working out well for us and and my friend Sam Butler one time said to me that and he was talking in general about certain kinds of situations, but he said, well Warren, he said all’s well that ends and that’s where we are. So we’ll go to Station 5. Well, we’re getting to Station 5. I’ll tell you a little bit more about the fellow that is now running pilot and knew you may have met here that Greg had known for a long long time and they grew up in Omaha and came from a poor family and was raised by his mother. And I went to the same high school, public high school that my wife went to North High, went to University of Omaha, set an all time record in in in the rushing yardage at playing there. He was a bouncer. Yes. Drafted by the New York Giants as I remember exactly. Yeah and but then injured actually in spring training as I remember in some way and so he ended up being an intern not an intern but a trainee might say for mid American before I was there and and now he hurry is still relatively young and he’s running a huge company and we’ve we’ve got incredible confidence in what he will do and we like very very very much the business that was created by by big Jim Haslam and the you know it it really is almost an only in an American type of story but it it does show you what somebody was some real stuff and with a mother that that believes in them and with bad breaks along the way. I mean imagine how you’d feel if you were drafted by the New York Giants and and then you suffered some injury in spring training or something. I mean you know you spend your it just it hurts but it’s not an experience I would have ever had it’s another I mean that was the last guy chosen you but the you know to see that he’s running a company of depends on the price of deal but it’s a huge company and what does he have 2025 thousand yeah of employees. Yeah and and he’s got many many many years to go. So I couldn’t be more pleased about not only the acquisition of Pilot but but just what it it tells you about America you can catch what what do you have to look up. Don’t read about them in Google or interview with Adam. Yeah I’m trying to think if it’s a podcast. Yeah he’s he’s got a podcast. Podcast that will just blow you away. And if you don’t think this is a a great country and has a lot of great people but all you got to do is read that podcast. So we but we do have a great set of assets here. Oh yeah, you know, if you look at Pilot, we have 800 more than 800 station. Travel centers. And just so everybody knows, I mean the beauty of that and there’s a question regarding this morning around fuel choices at pilot. And the exciting thing is in the end, pilot’s going to serve whatever fuel our customers need. It can be electric, it can be renewable diesel, it can be diesel or any of the various sustainable fuels. But the point is it has exceptional locations that are on the Interstate highways and hundreds of them, hundreds of them and we bought an incredible franchise and now we have a great leadership team in both Adam and his team that’s around them. So we’re we’re we’re pleased where that opportunity will go. Yeah, we’ve got probably the average one might be 10 or 12 acres or something like that zone commercial on interstates throughout the whole United States. I mean it it who knows. But but what was created there is amazing too. Yeah follow the played at University of Pennsylvania I mean University of Tennessee and undefeated and came away from this football team and you think, well another football player you know maybe that he goes out and and there may be some intermediate parts in the story a bit a little bit. But he buys the gas station and he turns it into something that is huge. So it’s we’re we’re really delighted with with it. And and you know it, it’s another kind of only an America story. And you know how many of us can become an All American #1 rights team, let alone starter? A business that goes on these sort of heights. So we feel very good about it. Becky. No, I think they’re ready for five now. Oh, I think he’s up there now. He’s ready to go. OK, go do it. Hello, Miss Buffett. My name is Zhang Yabo. I came from Microcity, Hainan, China. So I want to express my sincere gratitude for you for the extraordinary value you generated for shareholders and the positive influences you had on younger generation of investors like us. And my question relates to the concept of maximizing the duration of a compounding. As individuals age, the quality of a compounding inevitably diminishes. What are your secrets in maintaining your sharp man? Extraordinary judgement and great physical condition. We wish you well. Thank you. Well, you don’t know me well, but that’s. I like just keep talking. I mean the well, I, you know you have to be just plain lucky. I mean there’s no question about it that that there’s 100 or 1000. You know multiply a number of times that some drunk could have pulled out a car and broadsided me or you know just all the bad luck I’m that you can have in life. And I you know you say that my my great skill has been avoiding bad luck but that isn’t a skill that’s luck or bad bad bad activities and and you know and then to get to be you know I would not have been a if you’d taken my high school class and you say you know a couple of you are going to live to be 90 men are going to live to be 93 maybe I’ve got you know I wouldn’t I would not have been a heavy favorite I can tell you that and I wouldn’t have bet on myself. But you just now you, you should make the most of your luck when you get it. And sometimes I’ve done that and sometimes I haven’t. I mean, it is absolutely true that if I had it to do over again there there’d be a lot of different choices I would make. What they would have ended up working out as well as as things have worked out. It’s hard to imagine how they could have worked out any better. So. So I But it is interesting how many mistakes you can make if you just keep going. And Charlie, you know when you used to talk about that that you just soldier through, you just keep going and but you still need luck. You don’t you don’t want to. Anybody that says I did it all myself is just getting. I mean it’s just it’s they’re delusional and you know actually live in a country with a life expectancy is pretty darn good. You know. So that alone was a huge plus. I was was born if I’ve been born my sister’s here and she was born female and she’s just as smart as I was and everything but but even my own family who really did well particularly my dad loved us all equally and and and in a terrific manner but he still told me that that this is tender well was born 10 years after the the 19th amendment was passed and but he told basically told my my sisters you know that Mary Young will you still have your looks and he told me that the world you know the power new is new in nature and that you really could do anything. Well I thought there were a lot of things I couldn’t do but but it’s it’s the message given to females and males was incredibly different by the most well meaning and loving of parents. You know like I say in 1930. I mean it had been that way for millions of years It’s it’s changed quite dramatically but obviously not come completely but during my lifetime but it’s been during the latter half of my lifetime. If you take my sister’s, if they’ve been born even 5 or 10 years later they would they still would have been you know getting instructions when they went away to college to be sure and be sure and get married while or or get arranged so that you’re going to be married you know, while you’re in school. Because after you get off all the all the good ones are taken. That was Bertie was telling me that was a message that that you know basically was had been imparted to most of a lot of the women she’d met obviously. And so it it it really it’s it’s extraordinary how much progress we’ve made. But it’s it’s unbelievable how long it took to get it made. I mean it it it really does make you wonder about, you know, we’ve got all these heroes from American history and all the wonderful things they did. But but how good they say all men are created equal. And then by the Constitution that women, you know, love women not to be able to own property and then depending on the state I’m in, just terrible conditions. But anyway, that’s how you learn about what the humans can do. And I feel and and you’ve got to feel better about the future for your kids than you would have felt 100 years ago, no matter you know what the situation is. Anyway, we’ll move to Becky. This question comes from Linda Frazier in Westport, CT Dear Mr. Buffett, in the past you’ve specified that 90% of your wife’s inheritance be invested in a low cost S&P 500 index fund and 10% in short term government bonds. But the market cap of the magnificent 7 tech stocks now represents more than 1/4 of the market cap weighted S&P 500 index, which seems like a big bet on the tech sector. I was wondering if you would now recommend investing some portion of the funds in a low cost, equal weight S&P 500 index fund rather than having all of the equities exposure and a tech heavy market cap weighted fund. Well that’s an interesting question and and I will tell you that I I revised my will about every three years or so and I get little thoughts from time to time and then you don’t you don’t change it every time you do it you get a tiny thing. But the one section I haven’t changed is that that with my wife that she she got left a huge amount of money by partly anybody’s measurement except a pittance compared to what I’ve accumulated in total. And it doesn’t. It won’t make one bit of difference to her in life whether she beats the S&P or anything else. All all all I want to leave is plenty of money to take care of way beyond anything she’ll ever spend. And at the same time give her as much Peace of Mind as possible and and really make sure that the trustee you administers it doesn’t really have to, doesn’t have to worry about whether it just doesn’t make any difference whether she beats the S&P or not. And the main thing is that she feels that she feels that she’s in a financial position, which of course she will be, that she doesn’t even need to think about it and the trustee doesn’t have to worry about getting sued or anything else. So it’s it’s it’s it’s simply not an economic condition. Now obviously with 99% plus of what I have going to do philanthropy and and you know and I’ve got my three children. The one good thing is that they’ve at the age of 7069 and 65 they have matured remarkably probably more than their father and that’s but at the same time they’ve got less time to work with the money than they would have you know they were fifty or something like that. So you do you do the best in in accomplishing your objectives in your will and and in the end you know you can’t you don’t know what’s going to happen after you die but you make sure that that to the extent that you leave they have a lot of money to leave. You take obviously you you want to say thanks to a lot of people in quite a few people in terms of specific requests you want to take care of the your family but but in my case that requires practically no money and and they’re a fair amount for taxes but I have then my children are in charge of what happens to the funds that are left. But like I said, the, the, the problem is when you live as long as I haven’t your kids get older. Who knows what happens with mortality tables. And they’re the ones that I really want to see handle the distributions. And they will and they’ll be very good about it. And but if we’re all alive three years from now, they’ll be three years older. And so everything you can’t solve everything in life. You do the best you can with it and then people do interesting things that I’ve been rounded probably as many rich people as almost anybody and a fair number of I know what they’re they’re doing or have done with their funds. And the idea that you can have a huge amount of money and leave everybody very rich and have people liking each other less When it all happens, Humans are really they are interesting to watch. Some of them handle it beautifully and others are terrible. The one thing lawyers will always tell you is don’t don’t use codicils. In other words, you know when you change your mind on a will, just write a new one, but tear up the old one. Don’t do it by just adding carousels. But I believe I’m correct. Certainly read it that Paul Getty who was the richest man of the world presumably at one point in the 1950s or 60s and he’s a very interesting guy to read about and he had five five wives and he’s the one who’s grandson was kidnapped kidnapped and they they sent sent Paul Getty an ear of the child and everything. I mean it it it’s not it’s not a happy life when you get through it. But the one one thing he he did that was kind of interesting, he actually liked to use codicils because I think he had like 25 of them and it was kind of his way of writing, well I’m taking you out of the world because you know, and so he, he, he, he, he sort of delighted in explaining through his will what how he felt about all these people. I mean you really got some strange things where you build a will. I just. I just read about a will of a fellow that made a whole lot of money and was leaving it to his. I don’t know whether it’s children, grandchildren or whatever it may have been but in any event his opening line and his will is is and this was done some years ago but I know something about the family. His opening line in effect said I’m writing this will while I’m writing in the economy session of Eastern Airlines numbers such and such. I mean, he believed in getting getting right to the point of what? What, what? The people who were recipients, how they should live and they was going to be judging them. And it’s just so damned interesting to watch people’s wills. But you know, one one guy left a lot of money to his wife on the condition that she remarries so that at least one man would mourn his passing. You know what? Well I’m not giving legal advice here as I always say but but I feel I feel very very very good. But how things have turned out and and I wish I could figure out ways better to use you know the really bash resources I’ve got in the some of the really important questions of the world but but I haven’t been able to do that. I mean I had a few goals when I was 30 or 40 and may have written them in the wills then in terms of what the world needed done and how the money could be used. And unfortunately I decided that just what they weren’t feasible to accomplish and of course I was setting out this accomplished things that had that were important but nobody’s solved yet so you got to expect that Why? Why should I be able to solve them. But nevertheless it’s it’s an interesting but and the one thing about it is everybody here I don’t know about the ones who’ve come from other countries but they should you should have a will because if you don’t have a will, you still have a will and it’ll be whatever the state says. And it’s amazing 4 American presidents died intested without wills. For you know we’ve only had 45. And imagine becoming president of the United States and not having a will. But you can look up at somebody Reason I think, I think Lincoln, I’m certain Lincoln was one of the four. And here’s a man. I mean, I don’t know what you can always say. Well, he didn’t get around to it but that but it’s hard to imagine that that why the Abraham Lincoln would have died intestine. I’m sure we’ve got some Lincoln scholars out there that will write me after this and explain why, but I and I’ll be interested to receive their letters. But human beings are human beings and and we all have weaknesses and peculiarities and everything else. And don’t be too hard on yourself, because you have some of those. But don’t be totally forgiving either. You can change the future. You can’t change the past, but you can’t change the future. OK, Station 6. Good afternoon. My name is Caroline and I’m a lawyer in San Diego. Don’t hold that against me. Remember, Mr. Munger was once an attorney too. First, I’d like to sincerely thank you, Mr. Buffett, for your business integrity, tireless leadership and generous contribution to philanthropy. My question for the distinguished panel of two is, now that the AI genie is out of the bottle, as someone astutely put it earlier today, what business in Berkshire Hathaway may be most at risk with AI? Well, that’s a wonderful question. The problem is, I really don’t know anything about AI, but obviously, you know, anything that’s labor intensive, intensive, and that that it can create an enormous amount of leisure time. Now, what the world does with leisure time is another question whether more leisure time. I know an awful lot of people think when they go to work at first what they want is leisure time, and what I like is actually having more, more problems to solve. And but AI is profound. That’s what makes it. Makes it a genie you know is is what what can happen. I’ll I could tell a few genie jokes about it or not they they but I guess where are we I I don’t know what but you know in terms of our businesses they’ll figure things out. I mean, we’ve got smart people and it’s obviously if it’s used in a pro social way, it’s got terrific benefits to society. But I don’t know how you make sure that that’s what happens any more than I know how to be sure that when you use 22 atomic bombs in World War 2 that you know that you hadn’t created something you could destroy the world later on. Yeah. I think when we think of AI had a lot of the business units. I mean we’re truly worn trying to think how does it make us more efficient, more effective. I mean it it results in more idle time and we’re probably not thinking of the itter iterative IAI where we’re looking at very specific processes where our people can implement it and either at times it displaces the labor. But then hopefully there’s other opportunities for within the within the business. But I think you know when you think of all our businesses, I mean we’re we’re we do have a heavy labor workforce and a lot of them. But I think we at the stage we’re at as a as a company and and maybe where it’s at right now it’s really around how do we do things more effective, more efficiently more safely if it’s involves dangerous processes. So it’s we’re we’re early innings. John John Maynard Keynes was just wonderful to read and incredible mind. But in in around the time I was born he he wrote a book about what could happen. I don’t know whether it was in the next 100 years or whatever. And and he predicted correctly that that that output per capita would grow with this incredible rate that it has. But in terms of speculating as what people would do with that, I mean this this guy was unbelievably smart, but it hasn’t developed exactly the way he predicted. He was right about what was going to go into the equation, but he wasn’t. He didn’t have it figured out exactly what at all what what what would be the result. So it’s it is it is really. Well, we didn’t know when we were developing the bomb that there would probably be, that’s very soon nine countries, three of whom we should worry about finally, that we’ll have what they have. But we didn’t really have any choice. And you could have had all kinds of papers written on and everything else, but we were going to do it anyway. We needed to do it. And if you haven’t read it, it’s fascinating to go to Google and read the letter by Leo Zillard and Albert Einstein to President Roosevelt, written about a month before. Almost exactly a month before the Germany had removed into Poland and it laid out well, Leo’s Lord knew what was going to happen or had a good hunch of what was going to happen in terms of nuclear bomb development. And he he couldn’t get through to Roosevelt but Roosevelt. But he knew that that a letter signed by Albert Einstein would. So it’s probably the most important letter ever written and you can read, which is just fascinating to me. But that started the Manhattan Project. That started, you know, it’s just everything flowed out of it. And like, I’ll I’ll bet anything that Roosevelt didn’t understand it, but he understood that Albert Einstein just sent a letter and and then he probably knew what he was talking about and he better get better start the Manhattan Project. It is. It is. It’s just unbelievable what happens in this world. Anyway, let’s move on to Becky, I guess is next, right? Yep, Randy Jeffs from Irvine, CA. The March 25th, 2024 Wall Street Journal reported that the treasury market is about 6 fold larger than before the 2000 and eight 2009 crisis. Do you think that at some point in time the world market will no longer be able to absorb all of the US debt being offered? Well, I would say, but the answer is of course I don’t know but the but the my best speculation is that U.S. debt will be acceptable but for a very long time because there’s not much alternative. It won’t be the quality, you know any, any you know. The national debt was nothing to speak of like, you know, for a long, long time. And then it won’t be the quantity it’ll it’ll be whether in any way inflation would get let loose in a way that that really threatened the whole World Economic situation. And there really isn’t any alternative to the dollar as a reserve currency. And you get a lot of people will give you a lot of speeches on that but that that really is the answer that and and Paul Volcker worried about that back in 19, you know before 1980. But but he had threats on his life and I happened to have a little contact with him at that time and he was an amazing amazing fellow that that in effect decided that he had to act or know really the the financial system would fall apart in some way that he couldn’t predict. And and and he did it and he said, you know that people threaten his life and do all kinds of things and but he was the man for that crisis. But it it wasn’t the quantity of U.S. debt that was being offered that threatened the system then. It was it was the fact that that inflation and the future value of the dollar you know the cash is trash type thinking the turn that you know that that we’re setting up something that could really affect future of the world in terms of its economic system. And Paul Volcker took an honor and he was got his could be. And if you haven’t read a book or two about him with the winning last Rd. you’d be able to take a look at it. But it is I I don’t worry about the quantity. I worry about the fiscal deficit you know if it. But I’m not a warrior just generally. I mean I I think about it and but I don’t sit and get up work myself into a Stew about it in the least but I but I can’t help thinking about it and that’s we’ve got a we’ve got a great attention it’s it’s interesting I think the media enters into this and the focusing that focuses on the Fed and they you know they just love it because things are always happening and economists are always saying what’s going to happen with the Fed and everything else but the the the fiscal deficit is what should be focused on. And and Jay Powell is a a a not only a great human being but he’s he’s a very very wise man but he doesn’t control fiscal policy and every now and then he he sends out a kind of a disguise plea for please please pay attention to this because that’s where the trouble will be if if we have it. Yeah as one of the comics used to say there’s a stand up comic used to say who have I forgotten to offend after has his talk And I always feel like that after these meetings but we’ve got we’ve got time for at least one question and maybe 2. But let’s go to station 7. Hello, my name is Dennis from Giffon, Germany on my first time here. I’m here with my friend who would by the way love to invite you to dinner. You talked about the importance of heroes and we are very happy to and thankful that we have you as our hero with great values and thank you for that. First of all my question is it is clear that you achieved great success in life. Earlier you talked about every investment having opportunity cost. From what I’ve learned in life, that does not only apply to investing your money, but also to investing your time. And every hour you spend in your office is an hour you cannot spend with your spouse or children. With the life experience you have now, if you had the possibility to start all over again, would you set your priorities any any different? If yes, how and why? And what’s the best way to invite you to dinner? Well that definitely won’t be one of my priorities if I figure out. But that isn’t don’t take it personally because that when when you know you can figure out the at the maximum how long a period I’ve got. And you know I don’t think I mean I can figure out all kinds of things that should have been done differently. But So what? You know, I mean, I’m not perfect. I I don’t believe in lots of self criticism or being unrealistic about either what you are or what you’ve accomplished or what you’d like to do. You do the you know you do a lot of things and and who knows whether somewhat different trade-offs. You know you just can’t you can’t you don’t know what the past would have. Well I feel I I don’t think there’s any any any room in beating up yourself over what’s happened in the past. It you know it’s happened and you and you get to live the rest of the life and you don’t know how long it’s going to be and and you keep trying trying to do the things that are important to you and and if I was a a doctor or if I was a you know all kinds of different professions I might do different things but I really enjoy managing money for people who trust me. I don’t have any reason to do it for financial reasons. You know, I’m not running a hedge fund or getting it override on or anything, but I just like the feeling of being trusted. Charlie feels felt the same way, you know, that’s that’s a good way to feel in life and and it continues to be a good, good feelings. So I’m not really looking to change much and you know if I’m very lucky I get to play it out for six or seven years, I could end tomorrow. But that’s that’s true of everybody, although the equation isn’t exactly the same. But I I don’t believe in beating yourself up over anything you’ve done in the past and I don’t believe in well I believe in I believe in trying to find you know what what you’re good at what you enjoy And and then I think the one thing that you can aspire to be in because this can be done by anybody and it’s amazing doesn’t have any to do with money. But you can be kind you know that’s you can be kind if you’re. And then the world’s better off. You know. Yeah. I’m not I’m not sure that the world will be better off if I’m richer. But there’s no question that I mean that you know, kind people and in the end aspire to be more, or I’m sure many of you are yourself, but just aspire to be more so. And I guess we can take one more question from Becky and then we’d wind up. This question comes from Devin Spurgeon. On March 4th, Charlie’s will was filed with the County of Los Angeles. The first codicil. Codicil contained an unusual provision, it reads, Averaged out, my long life has been a favored one, made better by duty, imposed by family tradition, requiring righteousness and service. Therefore I follow an old practice that I wish was more common now, inserting an ethical bequest that gives priority not to property but to transmission of duty. If you were to make an ethical bequest to Berkshire shareholders, what duties would you impose and why? I’d probably say read Charlie and he’s expressed it well, and I would. Well, I would say that that if they’re not financially well off, if you’re being kind, you’re doing something that most of the rich people don’t, don’t do when they even when they give away money. But that’s not the question of when you’re whether you’re rich or poor. And and I would, I would say if you’re lucky in life, make sure a bunch of other people are lucky too, OK. Just in case, you know what my advice to myself would be has been during this period. So we only got 30, what, three questions or whatever it is. But thank you very, very much for coming. And I not only hope that you come next year, but I hope I come next year. Thank you. Thank you. Thank you.