บันทึกการประชุม Berkshire Hathaway AGM 2007

[PP]

โดยคุณ Pohick2 แห่ง Berkshire Hathaway Shareholders

AM 2007
[the following are my notes of the meeting, comments in brackets, and when I think I got it exact, in quotes]
[pre-meeting film]
Good Morning, with the cooperation of many who work for nothing, but we copyright to protect them, please dont record the film.
Berkstock play on Woodstock, 2006 pre-meeting with the KU students, Buffett & Buffett sing aint she sweet, DQ flameburger ad.
ISCAR Israel visit - Buffett and Munger tour ¼ billion factory, fully automated, with Eitan Wertheimer, camera monitoring, nobody is here on the night shift, we monitor from home, ISCAR is the most excellent for Berkshire.
Cave man GEICO ad, WB playing ping pong with Ariel Hsing Sunday 1:00 rematch at Borsheims, [she defeated all comers]  Fruit of Loom ad, Clayton home from 2006 meeting, being constructed on customers site, GEICO growing Nicely ad.
Interview with Lorimer Davidson GEICO Saturday meeting for 4 hours, that was the 1st day of a 41 year friendship.
GEICO ads, Mean Joe Green coke ad, Borsheims last year, FOL ad, Vince Gill singing, apple of my eyes,
WBs Saloman opening before Congress, Anika Sorenstam for Netjets, Berkshire Managers these are a few of my favorite things.
Jimmy Buffett surprise visit, performed Berkshire Hathaway-ville.
[comments]
WB: Thanks to Jimmy Buffett, Andy Heyward for the Berkstock movie, were working on a cartoon series for kids on financial education.  Daughter Suze puts the movie together, thanks to her.  Kelly Grotz [sp] whose 50th birthday is tomorrow take a bow.  Theres 600 people here from outside North America invited to the 4:00 reception.  Lorimer Davidson met me one Saturday morning, after I banged on the door and the janitor let me in, (they didnt work a half day Saturdays in Washington D.C. like Omaha then.)  I learned a lot from those 4 hours.
Introducing the Directors:  Howard Buffett, Bill Gates, Sandy Gottesman, S. Diamond, Don Keogh, Tom Murphy, Ronald Olsen, Walter Scott, and Ken Chase, who will be leaving this year, to be replaced by the new director Sue Decker.
[slide, this is a summary of the 10Q p.15]
First quarter earnings: Earnings 2007 2006
Insurance Underwriting 601 330
Insurance Investing 748 703
Noninsurance Investing 894 768
Other (30) (14)
Operating Earnings 2213 1787
Derivative Gains/Losses 382 526

Net Earnings 2595 2313
Hope to break even in underwriting; we do very, very well earning money on float.  Underwriting profit is not to be expected all the time, about ½ the time.  One unusual item, receivables went up 7 billion from the Equitas deal, 7 billion was transferred from receivable to cash.  Residential construction is getting hit very hard.  My guess is this will continue for a while.  Compared to our competitors, our companies do a sensational job.  You saw us as we gave our advice at ISCAR.
CM: Great experience, and a great, great company.  We bought without looking, but we liked what we saw.
WB: preliminary vote on the China resolution,
[slide] yes no
votes 15,245 811,479
percentage 1.8% 98.2%

1[1] With all the private equity money sloshing around, does it have the look feel and small of a bubble?

WB: Listening to your litany, I started to cry, as a competitor.  As a practical matter it takes many years to burst a bubble in private equity.  Unlike in marketable securities, it takes time to get your money out.  What will slow down activity is a widening of the spreads between junk bonds and Government bond yields.  Theres a great compulsion to invest money, in order to start a new round, and get more fees.  It might be some time until disillusionment sets in.
CM: It will be a long time until total revulsion.

2[2] [Bonn] Thank you for no 2% and 20% fees, and no options at Berkshire. I applaud your donation to charity in an intelligent and self-less way.  John Templeton says you are narrow-sighted.  What will it take for Berkshire to go global in a big way?

WB: I made my first international investment 50 years ago. Its not that we havnt looked.  We havnt been on the radar screen to acquire wholly owned companies.  Thanks to Eitan Wertheimer, in 6 to 8 months we will be starting a program to increasing visibility of Berkshire abroad.  We own 2 marketable seurities in Germany.  We own 4% of POSCO, but dont report on 14f.  In the UK and Germany the 3% reporting threshold is a real minus for accumulating shares.
CM: Templeton made a fortune going into Japan early, which was admirable, but we did all right in the same period.  [CM not being envious]

3[3] What is the best fee arrangement for managers?

WB: The doctor said test Charlies hearing by speaking at closer distances, so I tried, I first said Charlie buy GM at 30, then got a little closer,  buy GM at 30, then right behind, GM at 30?  He said for the 3rd time yes.
CM: He said given the unfairness of executive compensation, now solve the problem.
WB: There are more problems with the wrong manager than wrong compensation.  That being sid, Compensation has a natural tendency of ratcheting, and the intensity in the bargaining process is unbalanced.  CEOs care enormously, while the compensation sees it as play money.  They have Cocker Spaniels on the compensation committees not Dobermans.  I tried to act like a Cocker Spaniel, but they still wouldnt let me on.  Envy drives the racketing, and envy is the worst of the deadly sins, its no fun.
27000 attendees.

4[4] [Switzerland] A study says that companies with private jets under perform those without by 4%.?

CM Were in favor of private jets.
WB Berkshire is significantly better off because of corporate jets.  I see what it produces.  It can be misused like other systems.  (Going back to compensation, its not rocket science.)
CM If the trapping of power a abused, you would expect to find a correlation.  The most popular Roman Emperor is Marcus Aurelius, because of his disdain of the trappings of power.  The solution is to provide examples of contrary behavior.

5[5] What would be the impact or benefit from a credit contraction?

WB We benefit when others suffer; we dont enjoy it.  Times of chaos, 1887,  LTCM, junk bonds, exogenous events feed on markets, widening credit spreads, cheaper equity prices.  There will be periods like that.  I tried to buy a bank in Chicago, 40 years ago, but couldnt get a loan, except from Kuwait in dinars.  I passed, didnt want to take the currency risk.  The Fed will not allow a credit crunch.
CM: The last time we made a quick 3 to 4 billion dollars.
WB: The book by Jonathon Alter [Defining Moment: FDRs 100 Days and the triumph of Hope] describes the conditions of a credit breakdown, nobody wants that, but a credit seize up like LTCM, that we can take advantage of.

6[6] Mr. Munger as a student of Franklin, what are your views of Adams?

CM If you wanted a jolly evening, I would prefer Franklin every time.  I suspect I remind people more of Adams.

7[7] With corporate profits abnormally high, it is harder to find investment opportunities?

WB: Corporate profits are normally 4-6% of GDP, now its 8+% of GDP.  Its sustainable over time, so far no reaction, such as higher corporate taxes.  Sustained returns of 20-25% on tangible equity while bonds yield 4-5%, thats extraordinary.  The labor component of GDP has declined, but where or when it becomes a political issue , we dont know.  Corporate America has the best of all possible worlds, which is not sustainable.
CM Its not in manufacturing, retail, but in the financial sector.  No precedent, consumer credit has been pushed too far.  Korea had a collapse.  Its not a time to swing for the fences.
WB: With the IMF intervention, things were ridiculous; it was cheap in Korea like 1932 here.  Its our job to manage investment risk just like insurance risk.  But Noahs problem is that the ark looks silly the 1st 40 days.

8[8] Comments on Reg SHO, undelivered certificates?

WEB: Failure to deliver, with naked shorts we dont see.  We have no problem with shorting.  We wish more would short Berkshire.  We lent USG shares to a brokerage firm at $4 a share, and made some money.  We would do it again.  Legal ramifications Charlie?
CM: Delays in delivery, reflecting tremendous slop in the clearance system, is bad for civilization, like slop in control of a nuclear plant.  Hard to get a judgement.

9[9] Comments on Gambling companies?

WB: Gambling stocks have great future, legal ones.  Which ones, I dont know.  The super bowl, boring games, it adds some spice, (for me its the weather channel.)  40 years ago, I put a slot machine on the 3rd floor at home, and gave the kids dimes, and got all the allowance money back.  Gambling is a tax on ignorance; I find it socially revolting when government preys on weakness.
CM: Casinos use clever psychological tricks to boost business.  Its a dirty business and I dont think youll find it at Berkshire anytime soon.

10[10] Whats the best way to learn to invest, get MBA, read more Munger?

WB: Read everything you can.  I read everything on investing in the Omaha public library, some things twice.  Then invest with real money.  Its like reading a romance novel versus doing it.  I read a book at age 19. [Intelligent Investor]
CM: Sandy Gottesman asks new hires what do you own and why do you own it.
WB: Invest like buying a farm.  You would decide based on crop yield per acre.  Write an essay why buy any business.

11[11] What is the right Margin of Safety?  Do you adjust based on quality of business?

WB: We favor business we think we know the answer.  If we cant come up with a figure, we move on, we dont adjust the margin of safety.
CM: Investing is getting more in value than youre paying.

12[12] [Dr. from California] Comments on Health Care Mess?

CM: Its too tough.
WB: We cant solve that one.  We dont go around looking for too tough questions.  We would look for a solution with low frictional costs.  [i.e. lower the costs of insurance and overhead] Were looking for 1 foot hurdles not 9 foot hurdles.

13[13] Help with the intrinsic value of Berkshire?

WB: Its based on the future amount of cash delivered discounted to the present, or value of businesses.
It equals the value of marketable securities, plus operating business plus the value of reinvesting earnings.
CM The hard part is how much the future will be like the past.  Weve had an enormous advantage in the field from a long run of a ferocious learner.  Warren has gotten even better after age 65.
WB: A strong culture of owner orientation plus operating talent plus reasonable price plus reject irrationality.

14[14] Tilson How long will the derivative bubble run? What can we do to mitigate the crash?

WB: We tried to mitigate by talking about it.  Theres nothing evil about derivatives, but their usage on an expanding basis with more leverage on the system.  In the 1920s leverage contributed to the crash, and led to the regulation of margin.  In 1987, forced sales of portfolio insurance; it was a joke, stop loss orders automatically, mechanically.  It was a 22% shrinkage of the price of American businesses by a doomsday machine.  I didnt know shooting an Archduke would start World War I, and I dont know when.
CM: People are paid enormous bonuses based on phony accounting profits, the worst of the profession.  They dont know how stupid it is.  An accounting professor said to me you dont know accounting.
WB The Gen Re derivatives book cost 400 million to close.  All the contracts and their counterparties in the market dont add to zero.  People are gaming the system.
CM: As sure a God made little green apples, it will come to a bad end.

1[15] Comments on the short term investing mindset?

WB: We think its unhealthy.  If you take the degree bonds or stocks are held by an electronic herd.  The NYSE turnover has increased from 15-20% to 100%.  Its different from a buy and hold environment.  5, 6 sigma events dont apply to human behavior.  I think its a fools game.
CM: When people talk about sigma theyre crazy.  Gaussian distribution makes the math easier, but reality is different from what Gauss would predict.
WB: Its priesthood thinking, a secret code.


2[16] How do you make investment decisions, intrinsic value, quantitative methods?

CM: Multiple models, it takes some experience though, like a trained physician.
WB: Consider buying a farm.  Yield is 120 bushels of corn per acre; you know fertilizer costs, taxes, wages.  Therefore, you can calculate earnings in dollars per acre, say $70 per acre.  Now how much to pay for it?  At 7%, it would be $1000 per acre.  Thats what we do with businesses.  Aesop had it with a bird in the hand worth 2 in the bush.  How soon, how probable to get the 2 in the bush, finalizes the rate of return.  If you were considering a McDonalds franchise, you would consider the earnings versus the investment price.  You have to know your circle of competence.
CM: We have no system for investment decisions, but a comparative process.  We are looking for ones we can do.

3[17] Your CIO process, how do I apply?

WB: You just did [?]  Were not looking for people to teach.  We may find 1 or a couple 3 or 4.  Weve heard from 6-700, even a 4 year old. [?] The biggest problem would be to scale their results up to larger sums, 100 billion rather than 100 million.  Were looking for performance mildly better than the S&P 500 (not greater than 10%).  People, who will not blow it, are aware of the risks.  Then well give them a chuck of 2,3, or 5 billion on trial.
CM: The fellow who asked Mozart for advice on how to write symphonies.  Mozart said he was too young, the man protested, and then he said himself didnt ask for advice.  If youre a young Mozart, youre the man for us.
WB: There were 3 candidates when I closed the partnership: Munger, Gottesman, Ruane.  Later it was Lou Simpson at GEICO.  Now the problem is looking at a younger age cohort, Im less familiar with.  It can be done.

4[18] Comments on global warming impact on Gen RE?

WB: Odds are good its real.  You have to build the ark before the rains come.  Margin of safety suggests err on side of action.  National Indemnity is more impacted by catastrophic rates.  We think risk goes up, damage in non-linear, explosive 2,3,4,5 times losses.  Citizens should be cognizant of the risks.
CM: CO2 is what plants eat.  Its not an utter calamity on mankind.  To believe that you would have to be a pot smoking journalism student.  [un-PC Charley]
WB: 2004 and 2005 were both greater than 100 year storm.  Katrina is not a worst case scenario.  Its a factor with us.

5[19] Comment on the Chinese economy and Chinese banks?

WB: We dont know the answer.
CM: All economic progress is accompanied by banking processes that you would shudder at.  Theyve been doing it a long time.
WB: We had our problem with banking with the S&L problem.  Gains will continue.

6[20] Frank Elkhart [sp?] How do you manage risk? Is your equity aversion as much as 1969?

WB: Youve written a good book. [cant find title?] In 1969 municipal bonds were better than equities for 10 years.  Its different now.  If I had to choose between a 20 year index fund or 20 year bond, I would take the index.  I would rather buy cheaper though.  
CM: Thats the answer expected, but thats the answer.
WB: When we find something intelligent to do we do it.

7[21] Comment on Silver?


WB: Whoever we sold it to was a lot smarter than me.  I bought too early, sold too early, otherwise it was perfect.  In the end silver responds to supply and demand like oil, which the Hunt brothers learned to their regret.

8[22] How do you maintain your composure in tough situations, like Lebron James?

WB: The game was fixed.
I salute your value created into the world with the Gates Foundation.  Comments on a 20-30 year personal charitable plan?
WB: I have no problem with your time horizon, if you can compound at higher rates you are in effect an endowment fund.  The gift to the foundation was common sense.  When you have a tooth ache, you go to the dentist.  So when giving, give to the experts.  Smaller charitable requests, I send to my sister Doris.  In a larger sense, I havent giving away anything, I cant sleep any better, I cant eat any better, I cant have more fun.  Its just a load of stock certificates.  The claim checks are being used effectively; someone else can do the work.

9[23] How would you achieve the 50% per year, arbitrage, or cigar butts?

WB: Small sums are entirely different from our present position.  There are 100 investment options for investing $10,000 versus 100 million.
CM: Theres no use us thinking about that now.
WB: Charlie, he was asking for himself.

10[24] Could you compare the sub-prime problem versus international investing?

WB: Institutions will suffer in various degrees.  If unemployment and interest rates remain stable, it will not trigger something more general.  I looked at the 10Qs and 10ks; there is a high percentage with subnormal payments.  There was dumb lending and dumb borrowing.  It was just like manufactured housing a few years back.  
CM: A lot the went on was sin or folly, because accountants allowed profits to be shown when the allowance for losses should have been higher.  The starter loans to the disserving poor has been good, but the undeserving poor, or the stretched rich is bad. How could they look themselves in the mirror each morning, being both evil and stupid?

[Break for Lunch]

11[24] Comments on managed futures funds?

WB: I think the most logical fund is Berkshire. Any fund that has proscribed limits, such as a bonds, or futures, is less good.  The form doesnt produce the results, but the investors who know their limitations.
CM: The return of managed futures funds will be lousy to negative.
WB: Theyre normally a sales tool.  Form doesnt make opportunities; brains make opportunities.

12[25] How do we get ready for opportunities for the next 50-100 years?

WB: Im big on reading everything in sight.  I learned a lot in 4-5 hours with Lorimer Davidson.  If you have quality, you will see the opportunities.  We had to recognize some, didnt recognize others.  With LTCM there were ways to make money.  But you cant have a roadmap, have a reservoir of ideas, be programmed against loss, avoid catastrophes.  
CM: The place to look is in inefficient markets. Not in the drug pipeline.
WB: The RTC was a good chance to make lots of money.  There was an uninterested, motivated Government seller, lots of value, people staying away.

13[26] Comments on Katrina wind versus controversy, companies pulling out of Florida market.?

WB: The average homeowner will not read the fine print.  The lack of cover will make them unhappy.  When 10,000 get together the government will get inflation of terms, and the insurance company will be unhappy.  There will really be a tussle if there is a 150 billion loss.  It becomes a political question.
CM: Nothing to add.

14[27] With 5.3 billion of share purchased in the 1st quarter, does this change the investment hurdle for the elephant?

WB: Good question.  In the first quarter it didnt rise, (that was after quarter end), but flat.  Invested 5 billion, didnt change standards.  If you havent had a date in 3 months, would you have dated her on the 1st day?  It hasnt affected our ability to buy an elephant.  We bought TTI in the 1st quarter; we wish it was 5 times the size.    
CM: In the next 10-15 years you need more modest expectations.


1[28] As the father of 5 daughters, how do you defend charitable gifts for planned parenthood? [This was a first, airing this issue during Q&A]

WB: I think its a terrific organization.  I really think its too bad women have had involuntary bearing of babies enforced by a government usually run by men.  If you had a Supreme Court with 9 women on it, your question would not be raised.  I hope youll respect my opinion as I do yours. [pretty definitive]

2[29] Comment on risk versus volatility?

WB: Volatility does not measure risk.  Its nice, mathematical, and wrong.  Farms in 1980 went from $600 per acre to $2000 per acre; I bought one; the beta of farms went way up.  I was buying a riskier asset at 600 than 2000, nonsense.  It lets the people who teach finance use their mathematics.  Risks come from the economics of the business and not knowing what youre doing.  If you know the economics of the business, its not risky.  We havent had a loss in marketable securities of 1%.  An exception is Dexter shoe, but that was a wholly own company.  
CM: Its amazing what is taught is 50% twaddle, one of our reasons of success is to find out why and who.  
WB: Our catastrophic business over the long term is not risky.  We wish we could own more roulette wheels.

3[30] How do you spot integrity in annual reports?

WB: We spent many years, bought many things without meeting managements.  (Wholly owned businesses are different.) [Determining if they love the business or the money more]  We read a lot.  We read a large oil company annual report where we cant find what the cost of found oil is?  When we read dishonest messages like that, we stay away.  Also, if the annual report is the product of public relations or a consultant.  I like that feeling of talking with someone who treats us as partners.
CM: Quality business and quality management is easy, but lousy of business and quality management is hard.  
WB: If you come to me with a draft pick of all CEOs to fix Ford motors, its just too tough.

4[31] Comments now that were ½ way through the 17 year period after 1999.

WB: That was an allusion to 17 year locusts, theres nothing magic about a span of time.  If I had to own long term bonds or equity, I would own equities.  Equities will do better than 4 ¾%.  In 1999 people were bound to be disappointed.  Every now and then it gets extreme enough to say something.  You dont have to have an opinion every day.

5[32] Could you help the Salmon fishermen on the Klamath river?

WB: Our position is simple, FERC [Federal Energy Regulatory Commission] have 27 proposals before them.  You have a public policy question that FERC will decide not PacifiCorp.  We are a public utility subject to public policy; we will do what they tell us to do.  Its a question for FERC.

6[33] Comments on NYSE and Euronext merger?

WB: I really dont know the answer to that.  Both are large institutions; there may be an impact on the speed of executions.  The NYSE is far more efficient from the 1970s with fixed commissions.  Were pretty satisfied with the NYSE.
CM: I dont know anything about it.

7[34] How do you learn who to trust?

WB: Great question. I get letters all the time from people who get taken advantage of.  Weve had very good luck investing.  People give themselves away fairly often.  When they come, the things they talk about; there are clues of subsequent behavior.  
CM: Were deeply suspicious when its too good to be true.  
WB: In 1969, there were dozens of hedge funds to choose from.  I chose Munger, Gottesman, Ruane.  We rule our unfair fee structures.

8[35] What discount rate do you use?

WB: We dont formally have a discount rate.  We want enough to feel comfortable.
CM: Hurdle rates make sense; just because you can measure something doesnt mean its the critical variable.  It doesnt work as well as a system for comparing things.  If I have an 8% investment, I dont need your 7% whorehouse investment.  Its all opportunity costs.
WB: On 19 corporate boards, we would have been better off burning all the presentations with their discussions of IRR. [Internal Rate of Return, the rate produced by an investment] Nonsense figures.

9[36] Are there some questions you just cant put in the too hard pile?

CM: sure, if you have a child dying of disease. You must consider, you have to work at some problems, like WMD, so that you can slowly grind progress.

10[37] How often do you review the portfolio?

WB: When I had more ideas than money, all the time.  Now the situation is such with more money than ideas, not as much.
CM: Even in his salad days, he didnt spend time on the first choice.

11[38] Could you invest more cash in the large marketable securities?

WB: We are thinking about that. We buy the ones that look attractive.  10% short swing recapture rule limits some buying.
CM: It isnt as easy as it looks.  Coca-Cola was bought 30-40% of the daily trading volume for a long time.  No easy way to gather in elephants.
WB: We can buy 20% daily volume without moving the needle.

12[39] Would you meet the tribal representatives about the Klamath river dams?

WB: We will not make the determination in the end; it will be the FERC.  We put in a lot of wind power at the urging of the Iowa utility commission.  We will do exactly what FERC decides, along with the Secretary of the Interior.  When we bought PacifiCorp, Walter Scott and I signed avadavats restricting our action at PacifiCorp.  I appreciate your point.

13[40] Could you discuss the Florida Legislature coverage tussle?

WB: Cant tell, Joe?
Joe [?] Back in mid-January in a special session, the legislature raised the reinsurance fund, with a transfer of risk form private to public.  Lower prices for underwriting risks, freed up capacity, depressing effect on process.  Florida is taking on risk; there will be policy issues when the wind blows, taking 30 billion previously 12 billion.
WB: The problem is if there us a 100 billion loss, then theyll probably go to Washington.  Either the US will have insured it retroactively, or Florida will issue bonds.

14[41] Discuss your heroes Graham, Father, Davidson?

WB: I never had a let down. Choosing heroes is important, if they let you down, there can be long lasting effects.
CM: I wouldnt restrict it to the living.  Some of the best people are dead.

1[42] [I didnt understand, apparently they didnt either not responding, another first]
2[43] Comments on the costs and benefits of ethanol?

CM: Even McCain has had a revelation, even hes for it to gain support in Iowa.  It is about as crazy as can be: raising the cost of food to run cars around.  This is not my home states finest hour.
WB: Well be providing security for Charlie out of town.  My friend Jerry Goodmans reissued book Supermoney is for sale at the bookworm.

3[44] How do you guard against inflation, currencies, metals?

WB: The best protection is your own earning power.  Second best is owning a wonderful business.  Coke, Snickers, Hershey, with  low capital investment might outperform inflation.  We will do better than most.

4[45] Comments on the Railroad industry?

WB: I dont think itll be a lot more exciting.  Their competitive position has improved as energy costs rise.  They have ¼ the energy impact as truckers.  Better business now, very capital intensive.
CM: Nothing to add either.

5[46] [10 year old] Whats the best way to make money?

WB: Thats a subject I thought about a lot at 10.  When 12 Delivering papers.  ½ of my initial capital was earned from delivering papers.  I tried 20 businesses, the best was pinball machines.  [the Wilson Coin-Operated Machine Company]  An old study says that business success is correlated with the age of first business.  
CM: The best hour of the day is a way to improve your own mind.  If you make yourself a very reliable person, it will be very hard to fail at anything you want.

6[47] What is the investment future given the trade deficit, foreign competition, etc.?

WB: We think we are in a pretty good group of businesses.  We dont buy based on world trends.
CM: We learned about foreign labor competition in our shoe business.  As Will Rogers said, we learned not to pee on an electric fence without trying it. [?!]

7[48] Comments on a dollar decline?

WB: We think the dollar will decline somewhat more.  We backed that up with 20 billion futures, until the carrying cost became too high.  Then we bought businesses with foreign earnings.  Its not determinative.  We own 1 currency trade that we will detail next year.  We are following policies in this country that cause a decline.
CM: During this dollar decline, inflation at Costco is zero.
WB: Oil went form $30 to $60, while .83 euro to 1.35 euro.  100% increase for US, but only 35% for Europe.  Currency moves will matter move for Americans in the future.

8[49] Comment on Buffett and the board of directors function?

WB: Directors used to be potted plants.  There are 3 functions for boards: choosing a good CEO (Tom Murphy cased closed); curbing overreaching by CEO; independent judgment of acquisitions.  
CM: Big deals are contrary to shareholders interests.  Thats the bet.  Acquirers are giving too much.
WB: I never heard a discussion of what was being given away for what in return.  When I give away 2% to get Dexter, that was one of the dumbest things in the history of the world.  Doesnt show up in conventional accounting.  Gillette had 10 deals made that didnt meet projections.
CM: Self-serving delusion of good minds is incredible.
WB: A local board Data Documents was the best board I was ever on.  We have a real owners board, glad to get them to work cheap.

9[50] What is your criteria or investment partners?

WB: We dont normally want partners.  We want it all, dont need financial partners; dont want a deal with a knowledge partner, because we want things we understand.  Leucadia brought us the deal; we would deal with them again.  We remain partners with managements.

10[51] Investment Experience Commodities?

WB: No opinion on commodities.  If were in an oil stock, its because we think its a good value.  POSCO is the best steel company in the world, bought it at 4,5 times earnings with a play on the Won.  We like businesses that require small amounts of capital, Sees candy is a far better business than a steel company, its just not big enough.
CM: We invest in businesses not commodities.

11[52] Could you give some advise to NY Times shareholders?

WB: Shareholders in the NY Times have probably made a mistake.  We said it was overpriced based on the rear view mirror.  The newspaper business has gotten a lot tougher, but newspaper has inertia.  Suppose Mr. Guttenberg started today to compete with the internet, I dont think we could back him.  Hearst, Scripps, Pulitzer probably couldnt change it around.  Buffalo News earnings are down 40% from the peak.  
CM: Dual voting was in the basic contract when you bought the stock.  The idea that you can stamp your foot and break a contract, is an immature concept.
WB: Im not sure that in 10 years time you wont say that the way they played their hand was that bad.

12[53] A problem, my 2 daughters want to come next year?

WB: Were maxed out at the Qwest center, and hotels.  4 hotels will be added by next year.  If you have a solution were listening.

[End]

[oatty]

รบกวนคุณหมอ ช่วยเรียบเรียงเป็นภาษาไทยด้วยขอรับ จะเป็นประโยชน์กับคนแก่ (ขี้เกียจ) ที่ไม่ค่อยถนัดปะกิต

ขอบพระคุณครับ