** Hope everyone enjoys this, I put together a bunch of messages from various message boards (even a couple of articles) that discussed the 1998 BRK annual meeting. I tried to put the name of the person who posted the article before their actual messages. If anyone has any suggestions or comments email me at RROCKW@AOL.COM… Thanks to everyone who took the time to post their notes on the meeting.**
Written by JGartmann
The biggest contributor to the cash inflow is Insurance followed by Flight Safety.
Both Warren and Charlie still love their jobs. Cash is piling up, and piling up, and piling up. They will buy when time is right. Charlie says WEB bought a little silver just for fun to make a little peanut money. Sort of a non-event. A one billion earthquake will also be a non-event in the overall scheme of things.
Since there is nothing to buy right now Warren plays bridge 10 hours a week and Charlie 3 hours, but Charlie plays golf 7 hours so they both goof off about 10 hours a week each. Warren promises to cut back when the market gets interesting.
Both Warren and Charlie consumed a box of See's candy while speaking plus a Dairy Queen Popsicle. Warren kept asking Charlie where was the peanut brittle?
Everything is great. No problems to report. All news is good news.
I know this is a lot less than you want to hear, but you have to take what you get. We were all eating during the meeting following our leaders example
Tode sat next to me. I told him to post after he drives home to Kansas City. He took a lot of notes, as he was not eating the entire time.
HEDAWEI and Cathy, his wife treated me like a prince. Cathy is a living doll. She operates his American Express card with perfection. We drove by Warren's house and Central High school where Doshoes went.
Questions were terminated at 3:32 pm.
Written by Cbratt
Hi all....I am new to the board....met Marlin at the meeting today and he told me about this site. I want to share a very touching experience I had at the meeting. I had written Warren's office that I would be attending but would like to have a special microphone set up since I am deaf. I do lip read pretty good. Kelly responded and ask me to meet her on Sunday.....she also had seats saved in the 4th row for me and my parents. The time and effort she went to so I could get more out of the meeting was so special. I never expected a company as big as Berkshire Hathaway to pay such attention to a little thing like my hearing. I was impressed with the sensitive. And Kelly is so special, incredible and amazing! I only wish they would captions the videos....so I could understand them. My name is Cathy....45/f,divorced,3 kids and live in Minneapolis. I hope to meet you all next
Written by JSMcM
WEB mentioned strongly and positively the ability of Geico's potential over the next ten years and he seemed, to me, to try to get the shareholders to concentrate not on how BRK will look in a year but, in ten years. The super cat business will become less important over time as Geico builds. He was very bullish on Coke, Gillette, an American Express long term, and I emphasize long term.
The management team for BRK is in place no matter what happens and he made clear that the team is one of great depth and ability, and that the structure of BRK is very strong for the long term. Again, I inferred that he clearly tried to direct everyone's thinking in the direction of a decade away. My conclusion, check the closing price tonight, go to bed, sleep well every night for a decade, then check the price again, it should be a pleasant experience. Don't sell or as he said, "Buy low, don't sell." He and Charley both were adamant that there will be no stock splits. What a pleasure it was to shake his hand and thank him personally for the contributions he has made in his communications and attitude of partnership. Time to get some rest. Enjoy!
Written by Tode
Omaha Report--I am back in KC and will try to post a quick report before AOL logs me off again.
It was a mob scene, with traffic jams all weekend and gridlock in the halls at Ak-sar-ben. But the Yellow BRKers had a blast. I escorted Gartmann to Borsheim's Sunday and every time I turned around another person was asking him about his goofy hat. He patiently told the story over and over, and gave lots of people instructions on how to find us at AOL. I met lots of Yellow BRKers and as you would expect, they are all wonderful, fun people.
Lots of questions at the meeting about the price of the stock vs. IV. The official script from both Charlie and WEB was we ain't saying nothing, figure it out yourselves. GEICO continues to be the BIG STORY. Two things to watch--unit policy growth and underwriting profit. The GEICO news is great. Unit growth is accelerating--up to 16.9% for the last 12 trailing months. Tony Nicely told me Sunday he thinks we may see 20% unit growth for 1998 vs. 1997. He hopes underwriting profits will drop to their 4% target so they can maximize unit growth. They are around 3% market share now. WEB has said (according to Nicely, although WEB didn't say it at the meeting today) that within 10 years he hopes to have 10% market share.
SUPERCAT new business is drying up but old business will continue for a while. The key factor for the insurance business is how much float there will be 10 or 15 years from now and the underwriting gain it produces. The supercat "bonds" are hurting the supercat business, but WEB says the supercat business is "far less important than GEICO" in its impact on the total insurance business.
KO--WEB says only two things are important, unit growth and how many shares are outstanding. Don't get too sidetracked by quality of earnings concerns, asset sales, etc. Focus on what is important. KO is "the best large business in the world." Lots of questions about why not buy Japanese stocks that are cheap or other foreign stocks. WEB and Charlie are looking but not buying. Called Japanese P/C insurers cigar butt stocks due to low ROE. Would rather
own high ROE stocks like KO, G and AXP to get international growth.
Every year somebody asks why not buy back BRK shares. In the past, WEB said whenever BRK has been undervalued, some other equities were more undervalued, so he bought them instead of BRK. This year his answer was different. He said perhaps he should have been buying back BRK shares in the past, and suggested it may be a "valid criticism" to ask why he didn't do so. He also said it may be a valid criticism to question why he issued BRK shares in the past (echoing what he said in the annual). He even said that in the past he was not as optimistic as he probably should have been about BRK's future.
But I did not interpret this to mean he is ready to buy back shares at 69000. My impression is he can't find anything to buy and the cash is piling up, and the fundamentals of GEICO are stronger than ever, so maybe he is not ruling out buybacks like he seemed to in the past.
I posted a couple weeks ago that I wanted to watch the veins in Charlie's neck when he got the IV question. As noted above, both he and WEB were taking the no comment position, but I thought Charlie let one comment slip out that was revealing. Somebody complimented him and WEB for their honesty and asked Charlie if he thought BRK was a "great bargain" today. He said "you have to make your own conclusion," but added--"if you people keep bidding up the price of the stock, there is only so much that our honesty can do for you in the future." I will be interested to see what impressions others had, and I concede that what I "saw" and "heard" may be colored by my own pre-existing view that BRK's price is a bit ahead of itself. My impression, right or wrong, is that WEB and Charlie were afraid to say anything that might be distorted or misinterpreted about IV, so they decided to keep mum....but that they wouldn't mind seeing the price cool down a bit.
WEB said he expects BRK to pay about $1 billion in income tax in 1998, which made me think he must have some significant capital gains.
On the market in general WEB repeated what he said in the annual--the market is not overvalued if rates stay down and ROE stays up. He said the bigger "if" is the latter. In order to BUY at today's level you must conclude that today's ROE is sustainable WEB says he is "not sure this is true" . However, to try to sell out at the top would be a "greater fool" strategy, says Charlie.
On succession, some interesting comments. Charlie said if the top 25 key people at BRK all dropped dead at the same moment, BRK would still do fine. (Their preference is that that 3 through 25 go first, however.) Asked about the negative impact of the Buffett Foundation having to sell shares after it becomes operational (after Mr. and Mrs. Buffett both are gone), WEB said if it were operational today, it would have to sell 5% of its holdings each year, which would be about 500 A shares a week. He said this "shouldn't" hurt the stock price, because what really matters is the company's prospects. Given the market cap of BRK, if selling 500 shares a week "would make a difference, then maybe it SHOULD make a difference." He doesn't think the price would be "way different". Charlie added he had just had dinner with Mrs. Buffett and she seemed to have many years left in her. His conclusion: "you people have more important things to worry about." (AMEN.)
The triumph of capitalism worldwide will not help all U.S. industry, but it should help KO and G.
WEB repeated their test for retaining capital is whether over 3 or 4 years, every dollar retained produces at least a dollar of BRK stock market value. This test has been met by BRK (and almost all other businesses in recent years with the bull market).
Today he doesn't have any use for cash flow that he feels meets the test, but he thinks there is a better than 50% chance he will have the opportunity to use it within the "next few years." He will wait, he won't lower the standard.
To sum up, the market is high, BRK is high, but we have a wonderful group of businesses and the most important BY FAR is GEICO. As Charlie remarked, these businesses "have been lovingly assembled." He and WEB have the world's most demanding set of screens and too often we forget what an EXTRAORDINARY portfolio of businesses we own. They have huge potential. For example, WEB said Borsheim's and GEICO both have big potential to grow on the internet.
They both can underprice their competitors and the only problem is getting the word out. Most people are reluctant to buy jewelry over the net ("know your jeweler") but Berkshire's reputation is a secret weapon that may overcome this barrier. He said Borsheim's sales in the new internet world conceivably could increase 10x or 20x because its gross margins are lower than everybody else's. Tony Nicely was pumped up Sunday talking about how internet could lower GEICO's costs even further. Widen that moat!
Written by Arroz33
3. WEB was asked a lot of "what if" questions. One was : If you had to sell either the "owned" businesses, or the "invested" businesses, which would it be? WEB didn't skip a beat and said he would retain the owned businesses. He holds them in the highest regard and this was evidenced throughout the meeting.
4. WEB mentioned that BRK was "drowning in cash". Did anyone there get the impression that WEB and Charlie are about to deploy some capital into something slightly different (yet understandable)?
Lastly, for anyone who is fluent in German, DER SPEIGEL was present at most events, including Mr. Toad's. Evidently article will be out around the third week in May. The photographer took many pictures so even if one can't read the article, the photos might be interesting.
Written by philvalue
Spent the weekend in Omaha. Enjoyed it. At the meeting WB went on for about 5-7 minutes with a history of the supply and demand for silver in the last 60 years. In the last few years the inelastic demand and inelastic supply has come to a large disequilibrium at the current low (in WB opinion) price. In his watching this commodity for the last 30 years he acted on his accumulated knowledge and "swung for the fences". He thanked all the photographers for their use of silver all weekend when he had his picture taken thousands of times. CM commented that the real lesson in the silver purchase to BH shareholders is not the benefit to the bottom line but rather in revealing the psyche of that very strange man sitting to his right. He was referring to WB who could follow something for 30 years, having a desire to own it all along, but only act when the "value" was best in making a purchase. He was asked about repurchasing share of BH and admitted that perhaps he should have done so in the past and may in the future. He believed he always had something better to do with the cash at the time and therefore did not buy back BH shares. Regarding MCD share sales both WB and CM stated that was done because something better could be purchased. They did not say what that was but it may have been the silver, the zero's, or maybe Dairy Queen. WB stated he still likes MCD stock. When I sat down in the seat at the meeting I noticed some TV light stands just down from my seat. This was well back from the stage and about 1-hour before the meeting was to begin. A few minutes later WB walks in with Tom Brokaw. This, of course, is the tape that will play tonight (Tuesday) on the NBC Nightly News. When the interview ended WB announced that Tom Brokaw was a fellow Omahoan (sp?) and a BH shareholder. I think Brokaw then said that he originally purchased NFM and got BH stock when NFM was first acquired by BH. He then said something about $350.00, which I took to mean his own cost basis in BRKA. Brokaw and his wife just lingered during the meeting as fellow shareholders. I hope this gives all a little flavor of the meeting.
Written by: LBK7
On Sunday at Borsheim's I happened to be present when Tode and NueroBRK and another shareholder (the only one of 11,000 I didn't meet I think) were asking Tony Nicely questions in front of the GEICO stand. The questions were GOOD (I kept thinking maybe BRK shareholders should do the financial interviews on TV rather than many of the commentors they do have now). I have seen many businessmen, and government officials interviewed. I don't think
many (if any) could have compared with Tony Nicely's openness, honesty and command of his subject. His attitude was especially attractive - he answered every question and conveyed the impression as Warren and Charlie always do, that the shareholders have the right to know everything except that which might effect the company's ability to trade.
The only things that Tode seemed to miss in reporting some of the items in that conversation were:
1. In response to a question (from unknown shareholder) regarding GEICO going for 40 percent of the market (or some such high or higher number), Nicely said that would bring on anti trust investigations
2. Nicely mentioned that their costs have gone DOWN on medical claim outlays as a result of Hillary's attempt to look at the nation's medical delivery system, and that had an unexpected but very positive effect on GEICO's bottom figures. Interesting comment.
At the shareholders meeting, Warren and Charlie were asked about Social Security investing in the market or allowing the people to do their own investing rather than paying in to Soc. Sec. Warren said he felt no more than 1/6th if any amount should be dealt with like this - you had to be sure when people retired that would have that safety net of at least 5/6's of a social security payment. Charlie said he was even more negative than Warren.
On Japan: as Tode reported, when Charlie and Warren were asked wasn’t this the time to consider Japanese companies as value plays since their price had come down so much, both were negative since they didn't see any ROE that would fit through their filter system.
Warren Buffet's Usual & Unusual Holdings
SUSIE GHARIB: Well, New York might normally be the world's financial center. But, not this past weekend. Omaha, Nebraska took center stage. That is where billionaire investor, Warren Buffett, hosted Berkshire Hathaway's (NYSE:BRK.A) annual company meeting. More than 10,000 shareholders showed up to hear from the man they call, "The Oracle of Omaha." And, as Linda O'Bryon reports, they listened closely to his pitch.
LINDA O'BRYON, NIGHTLY BUSINESS REPORT, CORRESPONDENT: It begins at a Saturday night ball game with Warren Buffett and the Omaha Royals, a minor league team in which Berkshire Hathaway owns a 25 percent stake. This year, for the first time, Buffett honed his pitching technique to deliver a curve ball.
WARREN BUFFETT, CHAIRMAN, BERKSHIRE HATHAWAY: It is tough to have the whole season riding on one pitch. I mean, that, that is no fun.
O'BRYON: Well, why did you decide to break with tradition?
BUFFETT: Well, I just felt that it was, it was, you know, time to show them the new me.
O'BRYON: The new you.
BUFFETT: Yes, I have not gotten caught up with my fast balls.
O'BRYON: But there was another curve ball that warmed up investor interests. In February, Buffett announced that he had been acquiring silver, a lot of silver, 130 million ounces.
WAYNE ELMER, SHAREHOLDER: I was surprised. I do not question somebody whose worked to where he is. He, evidently, knows what he is doing.
O'BRYON: And, silver and gold of another sort also captured investor interests at Borshimes, the Berkshire Hathaway owned jewelry store. And the second big stop on the weekend of events.
Berkshire's stock rang up gains of 34 percent in per share book value of both Class A and B shares in 1997. The kind of rock solid performance that again, dazzled shareholders.
JAD KHOURY, SHAREHOLDER: He is a genius. I mean, he, he is the best there is, I guess.
KRISTEN SCHRAMM, 11-YEAR-OLD SHAREHOLDER: You get to own fun companies like Coca-Cola (NYSE:KO) and Zee's Candy. And, you also get to make money.
O'BRYON: And Buffett has added to his food group investments. He says he likes to put his money where his mouth is. So this year, one of his acquisitions was International Dairy Queen (NASDAQ:INDQA). Yes, another stop on the weekend capitalist adventure. Even the Press Corp. demand for a moment with Warren accelerated this year.
UNKNOWN FEMALE: Media demand has tripled compared to last year. What do you think?
BUFFETT: Well, you people are hard up for something to do. (LAUGHTER) But it is clear. The media and public's interest focuses on this story because his company has delivered consistent shareholder gains. Over the last 33 years, per share book value of Berkshire has grown at a rate of 24 percent, compounded annually. And in 1997, the company gained $8 billion in net worth.
O'BRYON: You threw out a curve ball, at Rosenblat and suddenly, ...
BUFFETT: Then you noticed.
O'BRYON: I noticed it. Some people would say, you threw a bit of a curve with your new unconventional commitments, such as silver. Why did you decide to go into that?
BUFFETT: Well, we have done things in the past that were unconventional. Anytime we think that the probabilities favor a profit, and we do not have something better to do, we will go in that direction. But we try to stick with things we understand.
O'BRYON: But, why silver, now? It has been in an 18-year bear market.
BUFFETT: Yes it took-six years ago there was probably 1.2 billion ounces in bullion form above ground. That's probably maybe 600 million ounces. Nobody knows the exact answer. So the world has been using up its bullion inventory of silver to some degree and I've been watching that for years. In fact, I've been watching silver for well over 30 years. But I've been watching the bullion inventories get depleted and we don't try and time these things precisely. There's still a lot of, there's a lot of silver around but there's not as much around as there was a few years ago.
O'BRYON: So even without inflation, you think it's a good...
BUFFETT: Yes. It has nothing to do with inflation. It only has to do with supply and demand.
O'BRYON: And what about the bond market? That's another unconventional commitment.
BUFFETT: Yes, well we don't do that very often. But we've done it before and we just felt that bonds were out of line with their, what we would expect them to be midsummer last year. And so far we've been right, but that's no guarantee.
O'BRYON: But equities are still your basics and you're staying with your main...
BUFFETT: I love great businesses and we own a few of them. We own a few outright. We own a few through the stock market and that's our preferred commitment. That's where we made big money.
O'BRYON: We interviewed one 11-year old shareholder. She said she likes Berkshire Hathaway because you have fun stocks like Coca- Cola and Steve's Candy. What would you say to a young investor today?
BUFFETT: Well, I would, she's got the right idea in terms of staying with things she understands. She knows what Coca-Cola and Disney (NYSE:DIS) are about and she probably doesn't know what Internet stock is about is about. So I'd say she's off to a very good start and I hope she has a lot of fun with Berkshire.
O'BRYON: And obviously, she's not the only investor having fun with Berkshire this week. Linda
O'Bryon, NIGHTLY BUSINESS REPORT, Omaha.
Nightly Business Report transcripts are available on-line post-broadcast. The program is transcribed by FDCH. Updates may be posted at a later date.
The views of our guests and commentators are their own and do not necessarily represent the views of Community Television Foundation of South Florida, Inc. Nightly Business Report, or WPBT.
Information presented on Nightly Business Report is not and should not be considered as investment advice.
(c)1998 Community Television Foundation of South Florida, Inc.
STICKING WITH PICKS
By BETH PISKORA
OMAHA, Neb. - Warren Buffett, the legendary stock picker, hasn't been picking any stocks lately.
At yesterday's Berkshire Hathaway annual meeting, Chairman Buffett said he hadn't made any new equity purchases in 12 months time.
"We haven't found any good values in a long time," said Buffett.
"In terms of how long we will wait for the right opportunity, we'll wait indefinetly," he told the crowd of more than 11,000 shareholders gathered here. "The businesses aren't going to perform better just because we got antsy and bought something."
Buffett isn't drawn to opportunities in Asia, either. Japan's depressed stock market didn't measure up to the uber-investor's high standards.
"Returns on equity in Japan have been very low," he said in response to a shareholder question. "It's extremely hard to get rich by owning a business that produces a low return on capital."
And even though he hasn't opened his wallet lately, Buffett has no qualms about praising several of his existing equity holdings, including Coca-Cola, Gillette, and American Express.
"We think Coca-Cola is a fantastic brand and a fantastic company," Buffett said.
Buffett made the comment in answer to a shareholder question about Coke's plan to buy back 30 million share of its stock. He said he thought the buyback was a good use of the company's cash.
"There will be eight billion servings of Coke sold around the world today. Coke makes a penny on each one of those servings, and since we hold a little more than 8 percent of Coca-Cola's outstanding stock, that makes me kind of excited."
The Oracle of Omaha said the last time Berkshire Hathaway added to its Coca-Cola holdings was about five years ago.
"Stocks are pricey," he said. "If things were even five or 10 percent cheaper, that won't change our opinion. It's just not mouth watering for us at these valuations. So if the money piles up, the money piles up."
Buffett admitted that the cash portion of Berkshire Hathaway's investment portfolio has been rising, which may have contributed to 1997 earnings for the company coming in lower than in 1996.
Still, shareholders are not complaining about the performance. In the past 12 months, Berkshire Hathaway shares have grown in value by 82.8 percent. Over the past 33 years, since Buffett has been running the show, the average annual growth rate for Berkshire Hathaway stock has been 24.1 percent. Buffett had some criticisms to share yesterday, and not just about the overvalued market. Buffett expressed concern that the increasing use of stock options could depress earnings in the future for many U.S. companies. "I feel in one important respect that quality of earnings have gone down, and that's because of stock options," he said. "There are some companies that we have evaluated for purchase that we believe are overstating earnings by 10 percent per year."
Buffett called for a change in the accounting rules to better account for executive stock options.
Another rule that should be changed, he said, is the one that allows reporting of earnings before depreciation, taxes or amortization. "The one figure that we utterly discount as ridiculous is the EBIDTA," he said. "To look at some figure that is stated before cash flow requirements is a direct insult to shareholder intelligence." Buffett also said he disagrees with the commonly held perception that investing by the baby boom generation is fueling this bull market. Instead, he attributed the strong market to high return on equity, low interest rates and the "good work done by Alan Greenspan and Robert Rubin - there couldn't be a better team." He sited his contempt for Internet stocks and said he would never recommend Yahoo! to investors. "If I were teaching a business class to learn how to evaluate a company, I would ask on the final exam to value an Internet company," he said. "Anyone who gave me an answer, I would flunk. It would make grading the papers easier." Buffett spent the bulk of the seven and one-half hour meeting instructing shareholders on his investing methodology.
"My method is very simple, but it isn't always easy," he said. The most important tenet, he said, is not to invest in a company unless you can explain how it makes money in three sentences or less.
International Dairy Queen, one of Berkshire Hathaway's most recent acquisitions, is a perfect example. Buffett, an admitted fast food junkie, was a frequent visitor to the 12 Dairy Queens located in his hometown before he became an owner. Charlie Munger, Berkshire Hathaway's vice-chairman and Buffett's investment partner for 30 years, is another fan. "We put our money where our mouth is," joked Buffett, as he munched on a Dairy Queen fudge bar.
Written by: JSMcM
WEB did say that the multiple of a company does increase as individuals' confidence in the sustainability of the earnings and increasing quality of the company becomes more apparent. WEB's comments that he would rather retain the ongoing businesses vs. the investment portfolio if he had to make a choice and clearly presenting the facts that he has deep management talent and solid business framework for the future, this should change the focus of outside valuations of the company. WEB also went to lengths explaining how the Buffett Foundation would have no adverse impact on the price of BRK when the time comes to sell some holdings annually. He related how recently one long time shareholder's heirs had to reduce their substantial holdings into the market in order to pay inheritance taxes and this execution had no material impact on the market price of BRK. He effectively said the Buffett Foundation's future sale of stock is nothing to be concerned about.
He was the individual who asked WEB for his sentiments on banking and the sustainability of 20% ROE which Buffett said he did not expect to continue.
Written by LBK7
Talking about most of the investors being long time holders of the stock, WEB mentioned that one of the early investors just passed away. This person had invested 100,000 with WEB early on, and his will just left an estate of 500 million.
Written by: DWagner 907
The book Charlie recommended is Guns, Germs and Steel by Jared Diamond. If memory serves, he recommended another book of Diamond's a few years ago, called The Third Chimpanzee.
Written by: Bean11163
WEB's explantion of KO was a classic illustration of why selling your Coke stock is a dumb thing to do.
Also, interesting were his comments on the "trimmed" positions where he stated he would love to buy them if only they were considerably cheaper and that he still thought highly of the businesses. He also spent a long time explaining that one should be happy that the stocks you have sold have gone up after having been sold. In effect, avoiding the greater fool theory, and instead concentrating on good businesses.
Interesting that the buy-back comment he made was something like "At the time we were buying KO maybe we could have been buying shares simultaneously". I took that to mean that some time dowm the road if he finds another "HOME RUN" like KO which He and charlie are cold stone certain will not only be huge in its own right but to BRK as well, they might as well buy in some stock at the same time to hitch on before the IV gets another BLAST upward from
such an investment. Talk about leverage!
Written by: Neuroberk
Tode's report on the annual meeting was right on the mark. I will just add a few personal observations.
1) BRK stock price. Official position of WEB and Charlie on BRK stock price was "neutral" or "no comment". However, I had a feeling that they did not want the stock price to go up any higher for the time being, as Tode has noted. At the same time, I had the impression that WEB did not want to "talk down" the BRK stock price either. Does this mean that the price is not at a "nose bleeding" level yet? Time will tell.
2) GEICO GEICO seems to be the main determinant in estimating the IV of BRK at the present time. Its growth potential reminds me of Wal-Mart in early 80's. GEICO has fundamental cost advantage like Wal-Mart and poised to take market shares from State Farm (Sears) and Allstate (Kmart) who are wedded to costly agent system. I was very impressed by Tony Nicely, CEO of GEICO, with his focus and enthusiasm.
If GEICO can achieve 10% market share in 10 years, its yearly premium volume would be $15 B and underwriting income around $600 M (Nicely aims for 4% underwriting margin).
$15 B premium income with good underwriting result seems to me hugely valuable. For example, AIG had $13 B property/casualty premium in 1997, with 3% underwriting margin. Incidentally, AIG's market capitalization is $90 B.
WEB said, " The key in valuing BRK insurance business is knowing what the float would be in 10 to 15 years in terms of its size and cost." If some of us can figure out the amount of future float, in view of the expected growth of GEICO, then we might be able to get some IV numbers based on it.
Written by: Mommalion
I like the way they both phrase the pearls of wisdom they impart...Some examples
"Diversification is a protection against ignorance."
"We have decentralized our participation in many businesses to the point of total abdication."
"Intrinsic value is the stream of cash that comes in the future. It's easy to say, but hard to figure."
"We're not predicting the currents that will come...just how some things will swim in those currents."
"If our predictions are better than most, it's because we make less of them."
Besides the other comments made by previous posters, I'd like to add that I was glad to hear that both CM and WEB felt they missed out by not investing in pharmaceuticals...made me feel that maybe my own investment choices (other than BRK) weren't too out of line from theirs.
Also found it interesting to hear WEB rave on about Value Line and what a great tool it is. Made me wonder if he had considered buying the company.
Written by: JGOSH711
Three minor things I do remember.
First, Buffet spent a good amount of time at the meeting complementing Larry Cunningham on his new book, The Essays of Warren Buffett: It appeared to me to be a clear signal that Buffet thought the book was well worth reading. I had the opportunity to talk to Larry on Sunday and he has been encouraged to have another symposium on corporate governance in another year or two with the same players. Something to watch for.
Second, I was told that Borsheim's sales last year just missed setting the record for sales over past meetings. Towards the end of the day Buffett mentioned that Borsheim's sales Sunday were twice that of the previous year. At 11 am there was more room in a New York subway during rush hour than in that store, so I believe the numbers.
Written by: LBK7
Hey we all forgot to mention the great plug WEB gave to Value Line. That was one of the early morning questions from a man who identified himself as being from Value Line and asked how they best used their time to evaluate a company (or something like that) and I remember WEB saying - Oh Oh, FAT PITCH. He then stated they use value line first not the ratings but all the other valuable info the report contains. CM concurred.
Written by: PortOracle
1 Books- Guns, Germs and Steel was read twice by Charlie. WEB liked a book called something like the Quotable Einstein but couldn't remember the exact title.
WEB said that the best book about Berkshire and himself was the book by Cunningham.
2 The Silver investment is a very small part of BRK's holdings
3 Sandy Weill of Travelers is a great manager. Philip Knight of Nike is very creative.
4 EBITDA---Earnings before income, taxes, depreciation and amortization is nonsense according to both of them. But when everyone talks nonsense eventually it becomes standard.
5 BRK expects to pay about 1 billion in taxes this year. However WEB would much prefer to be on the paying side than on the receiving side of the equation. He comes across as someone with a real social conscience
6 When one sells a stock one should expect it to continue to go up thus confirming its initial good value. BRK sold some of its stock last year to rearrange its portfolio.
7 Trust. When WEB dies the trust may sell 5% of BRK each year but it will have little effect on the price
8 Borsheim's new venture may be to sell on the internet . WEB thinks there is great potential in this arena. The same for GEICO. Over 100 million dollars will be spent on GEICO this year in advertising. CM and WEB can't contain their overwhelming enthusiasm for GEICO.
At WEB's last birthday party someone asked him his age to which he replied "Count the candles on the cake"
The response was "I tried but was driven back by the heat!"
Written by: BRKFan
The most relevant to the shareholders of BRK concerns a dividend. I felt on several occasions that WEB cracked the door open to the possibility of a dividend. While a payout would have shocked me in the past, I would not be surprised to see a dividend in a couple of years if the market stays robust. While it is a long time in the future it would also reduce the amount of shares the Buffett Foundation would need to liquidate each year.
My sixth sense tells me not to be surprised if they have been adding to the Nike position acquired with Geico. I can't back this up with facts, however, the tone of WEB's answer to the question regarding NKE seemed different to me this year.
I also found the comments about Wesco (WSC) interesting. While often described as a poor mans BRK or a BRK clone, they clearly stated that this is nowhere near the truth. While this is obvious to anyone that has looked at both companies closely it was the most forward comment I have heard WEB and CM make concerning WSC. They stated when they find businesses that they can buy 100% of the company the owners want stock in BRK not WSC (who could blame them).
Another answer that I found thought provoking was concerning the low institutional ownership of BRK. I may have found this answer more interesting than most because I am in the investment business. WEB stated that they love having a low base of institutional ownership. They much prefer having individual shareholders. With individuals it is more gratifying because you can make a difference in their lives, with institutions you can only improve their performance. Unless you are in the business you might not appreciate how true that is.
Written by: SanjivM549
The book WEB liked is actually called "The Quotable Einstein" and it is available at Amazon.Com. He also mentioned a book about Fermats last theorem. The author’s name is Simon Singh and it is also available at Amazon.Com.
Written by: Tode
I thought about WEB's remark that Berkshire's culture has a Norman Rockwell flavor.
Written by: JSMcM
WEB also talked very positively about Flight Safety and its ability to 'throw off' cash. I have to admit I really was 'pumped up' about the prospects of BRK over a ten-year period.
Part of a Morningstar Article:
Buffett and Munger slipped into the office of Susan Jacques, the CEO of Borsheim's, for some one-on-one interviews. Morningstar quizzed the two men on their investment philosophy.
What is it that really piques your interest in a stock? What tells you that it could be interesting?
Buffett: We're so limited now because we can only go into very big companies. Charlie and I are probably familiar with every company in the United States--in a general way--that we can have the kind of position we would need to have [to make a difference in Berkshire Hathaway's performance]. We look for the ones where we think we know what they're going to look like in 10 years. If the price gets attractive and we know a little about the management, and we're quite sure--within a range--what they're going to look like in 10 years, we're in our area. We buy them when the prices are right, like Coca-Cola was some years back.
Do you have advice for the individual investor to help them narrow the stock universe?
Buffett: They ought to think about what he or she understands. Let's just say they were going to put their whole family's net worth in a single business. Would that be a business they would consider? Or would they say, "Gee, I don't know enough about that business to go into it?" If so, they should go on to something else. It's buying a piece of a business. If they were going to buy into a local service station or convenience store, what would they think about? They would think about the competition, the competitive position both of the industry and the specific location, the person they have running it and all that. There are all kinds of businesses that Charlie and I don't understand, but that doesn't cause us to stay up at night. It just means we go on to the next one, and that's what the individual investor should do.
So if they're walking through the mall and they see a store they like, or if they happen to like Nike shoes for example, these would be great places to start? Instead of doing a computer screen and narrowing it down?
Buffett: A computer screen doesn't tell you anything. It might tell you about P/Es or something like that, but in the end you have to understand the business. If there are certain businesses in that mall they think they understand and they're public companies, and they can learn more and more about them.... We used to talk to competitors. To understand Coca-Cola, I have to understand Pepsi, RC, Dr. Pepper.
Munger: And Cott. Cott is the one you have to understand more than anything else. [Note: Cott is a Canadian company specializing on low-priced, private-label soft drinks.]
The next question has to do with reinvesting capital. You take pretty much 100% of the cash flow out of the businesses you own...
Buffett: We have a lot of money coming in.
...and you reallocate the capital. Especially since it is so difficult to find new companies to add to the portfolio, why not reinvest more in some of the existing companies you have in order to grow?
Buffett: That's the best thing to do. If you're talking about the operating businesses, we're pouring it into a company like FlightSafety, for example, in terms of [buying flight] simulators. We're pouring it into promotion at GEICO. [Note: FlightSafety, a subsidiary of Berkshire Hathaway, provides training to operators of planes and ships. GEICO is the seventh largest auto insurer in the United States.] But for a lot of them there's not much we can do .
See's Candies for example? [Note: See's, which specializes in boxed chocolates, is another Berkshire subsidiary.]
Buffett: We've tried 50 different ways to put money into See's. We actually bought a $13 million or $14 million building in Los Angeles--350,000 square feet--last year. If we knew a way to put additional money into See's and produce returns a quarter of what we're getting out of the existing business, we would do it in a second. We love it. We play around with different ideas, but we don't know how to do it. We do know how to do it at GEICO, and we know how to do it at FlightSafety. But with some businesses we haven't figured it out yet.
Munger: By the way, we really shouldn't complain about this because we've carefully selected a bunch of businesses that just drown in money every year.
That's why we wondered what you do with all that money!
Buffett: That's our job, and right now we're not doing much with that job.
Do you ask your operating managers to think about these questions?
Buffett: Oh sure. I just sent out a report to one of them at another company who's done a great job making small add-on acquisitions. We want them to do it. But we don't want them to do it at any cost and just to feel that it's a blanket mission. We do want them to be alert to that sort of thing. Any time they can make a small deal that enhances their position at a reasonable price, we write them a check that day.
Can we ask you a question on corporate governance? You've been very vocal about shareholder rights and shareholders thinking like owners. Morningstar's very well known for mutual funds, so I wonder if you have any observations about mutual-fund shareholders, their rights, and the way they're been treated?
Buffett: I think the independent directors have been anything but independent. They wrote the Investment Company Act in 1940 and made these provisions for independent directors on the theory that they would be the watchdog for all these people pooling their money. The behavior of independent directors in aggregate since 1940 has been to rubber stamp every deal that's come along from management--whether management was good, bad, or indifferent. Not negotiate for fee reductions and so on. I'm a huge admirer of John Bogle and what he's written. A long time ago an attorney said that in selecting directors for mutual funds, the management companies were looking for Cocker Spaniels and not Dobermans. I'd say they found a lot of Cocker Spaniels out there.
Posted on Yahoo BRK board by:
Selected Q & A from 1998 Annual Meeting WB = Warren Buffett, CM = Charlie Munger Efficient Market Theory WB: Didn't believe in it. Dr. Aukins teaches anything but this theory at Univ. of Florida. CM: "Massive contamination in teaching of this theory."
Existing Values in Japan? WB: Didn't see as obvious bargains. Low ROE, 5-6%. Difficult to get rich by being owners. "Cheap cigar at a good puff." Time is friend of good business, enemy of poor business.
CM: "Don't hope for liquidation proceeds before going broke."
Naming Successors WB & CM didn't reveal name(s) during this meeting.
Selling Criteria WB: Didn't buy stocks and businesses for resale. Trimmed business didn't mean negative. Sold only if needed money for other things or valuations were out of whack. Would have bought more current holdings if cheaper market. Practice "Bigger Fool" if sell at top. If price goes up after selling, don't worry.
Useful to be reminded of errors.
Peter Kiewit's New Spin-off No comment.
Insurance Business & Mission Statement Insurance business most significant to Berkshire. Flight Safety came 2nd.
No mission statement, no strategic plan for opportunities. Keep things simple at headquarter.
Year 2000 Compliance Good shape for Berkshire. No material effect.
Weak governmental units compared to commercial sector.
Campaign Spending Battle of wallets for influence. Political influence was cheap in the past.
Berkshire's Income Tax WB: Berkshire will pay a lot of taxes this year. Happy to pay taxes.
Bank Consolidation Unprecedented ROE for banking sector. Unsustainable 20% returns on tangible assets. Against classic economic theory.
Reading Recommendation "Guns, Germ, and Steel" by J. Diamonds. Rare for CM to read twice.
Nightmares (What kept them awake at night?) WB: Not worried, world changes. If worry about something, will correct it and get back to sleep. Not worry doesn't mean lack of good ideas.
Forecast for Next Decade & World's Financial Market Only look for decent businesses, important and knowable, and translate into actions for Berkshire.
Research on Market
Value Line gives quickest way to see key factors, quick snap shot, very efficient and up-to-date. Don't care about ratings, only look for facts. Value Line's charts, 10-15 lines, couldn't have been done better. Immense amount of detailed financial information. Meaningless chicken tracks, price and volume.
No threats to Geico and reinsurance business. Reinsurance very opportunistic and profitable.
KO's Buyback Program
KO is the best large company in the world. WB likes to see KO repurchase its shares, good use of capital despite high P/E. This isn't true with other companies. Consistent repurchase is good for Berkshire, increased ownership % without additional buying.
Float From Insurance Business
Now 7 billion, has negative cost or profit attached. Geico is major part. Its marketable earnings power, safer on the down side, better on the upside.
Dumping of Treasuries by Japan
WB: Not a threat to the US. Always 2 sides to a transaction or equation. If Japan sells the treasuries, it receives dollars. What's done with the proceeds. For trade deficits, foreigners get US dollars and become net investors while the US becomes a net consumer.
CM: Will be surprised to see dumping by Japan.
Equity and Government
Government should not get involved in equity market.
Brokers' Not Recommending Berkshire
WB: Berkshire isn't the stock to get rich on. Hard to buy in quantity. Looks for shareholders to stick around as long as WB and CM stay around.
Significant but not as significant as Geico. Super Cat has less volume but not less price.
Every business has problem and management should tell readers about it.
KO VS Pepsi
Long-term, KO will continue to gain against Pepsi. Pay no attention to KO's assets gains. Bottling transaction is incidental. Look at Unit Case Sales and shares outstanding.
Quality of Earnings
Have gone down due to stock options.
Valuation of Business
WB: Identify key variables of business and how predictable they are. Want dominant variables. Use long rate in discounting. Look at cash generated, discounted back at treasury rate. Investing is an art. Best company has constant incoming cash streams, no outflow. Worst company, grows a lot but forced to grow and invest capital at lower rate.
Understand business and competition. Economics, how is it going to be like 5-10 years? Evaluate future streams. Comfortable with people running, price to pay for business? Know what you don't know. Good to study 1904 annual report of National Cash Register.
CM: Frozen Company, taught by Ben Graham. What's the enterprise worth?
Recommendations for Teens
Learn all accounting one can learn, read about investment, get business experience, talk to business people about what makes them tick, and under-spend income.
Babyboomers & Stock Market
Stock advance brought along more money. More money, more participation.
Unrealistic expectation of earnings. Last 18 years, awesome returns. Next 18 years, won't be the same.
WB: Disagreed with author on a few points. With Disney, you get what you see.
CM: No quarrel with Disney's accounting. Disney's economic earnings are higher than reported earnings.
Investing in high-tech Companies
WB: No. Don't know what they will look like in 10 years. Don't like to play games that others have advantages on him. "Swing with easy pitches."
Repurchase of Berkshire Shares
WB: Missed the boat at various times. Will see what's best to do with money in the future. Don't like to leverage up.
WB: Need management with purchased businesses. Determine management's primary motivation, money or love for business. Identify the ones who love businesses or make conditions to love their businesses. "If you've been around awhile, can identify."
Definite wait for attractive investment. Get paid for being right, not activity.
CM: "Integrity, intelligence, experience, and dedication."
High Compensation VS Performance
Both bothered by irrational sums, costly to companies via options. Pay:performance =10-20:1. Will not go away, akin to campaign finance.
Felt good how it worked out.
Nonreporting of Businesses Under 750M
Immaterial cutoff size. Will move up as go along.
WB: Good Travelers CEO with proven records.
Missed it. Didn't recognize or didn't identify within circle of competence.
WB: No formal systems or no operating plans to submit to headquarters. Management continues according to past success. "Talent is a scarce commodity-let management do their ways." Personal enjoyment in daily discussion or involvement in reinsurance business.
CM: Berkshire's systems isn't right for everybody.
Yes, at attractive price. Not reluctant to invest abroad. Currently, not finding bargains around the world.
Selling Berkshire Shares by Buffett Foundation
WB: Immaterial price fluctuation from selling of shares. Demand about 500 shares a day. Prospects of businesses matter despite turnovers due to events.
CM: People have more important things to worry about.
Buffettoloy Book, written Mary Buffett
WB: Two authors. No quarrel with theory. Not the book would have written. Get more philosophy from reading Berkshire annual reports.
End of Cold War
Not factored in investment decision. KO, AXP and Gillette will be helped by prosperity internationally. Inexpensive products help.
Dairy Queen (DQ) VS McDonald's (MCD)
No connection in DQ acquisition and McDonald's disposal. DQ has 6,000+ operations. DQ's investments in fixed assets are different from MCD. DQ's capital employed is smaller than MCD's
WB: Trouble for tobacco companies, bound by agreement when the other side isn't.
CM: No expertise in this decision.
US Market Overvalued?
Not overvalued if rate remains at current level or lower and corporate profitability at present likely to maintain. If either condition breached overvalued.
Split, Valuation and Berkshire Financial Stability
No plans to split. If owners want, convert A to B shares.
Not give advice on stock. Answer will be magnified. Up to people to buy and sell. Berkshire's market price tracked intrinsic value well. Not perfectly, but tracked better than most companies.
Prepared and ready, but did not anticipate 1929-like era.
KKR & Dura Cell
No effect on Berkshire.
Health Concern (from poor diet---See's and DQ's sweets)
WB: Heavily relied on genes. Will get standard rate for life insurance.
Real Estate Investment
Discernable records of failure. Both understand other things better. Prices don't intrigue both.
Nike & CEO, Phil Knight
Terrific operator CEO. Both keep opinions about Nike to themselves.
US Economic Expansion
WB: Significant credit to Vockler, Reagan, Rubin, and Greenspan.
CM: No quarrel about the economy, better than people anticipated.
WB & CM on See's Commercials
Opted for a 110-year-old actor instead.
Risk and Capital Asset Pricing Model
Nonsense model. Evaluate without knowing what the future is going to be like. High discount rate won't help.
Want favorable odds. Prefer high volatility to low volatility if know business for certain. Example, investment in Washington Post.
High caliber stockholders, who understand the business, compatible, and look at the business the same as them. Prefer consistent relationship.
Tax-free Spin-off to Shareholders
Meaningless, more frictional cost and overhead. Operating cost about .5% of capital base.
Sales at Furniture Mart & Borsheim's during the Annual Meeting Weekend
Furniture Mart about $800,000 a day. Borsheim's, twice of last year's level.
Interesting for both to follow. Anyone can follow. Didn't feel that they understood more than most people.
Geico, Borsheim's and the Internet Commerce
Huge potential. Internet facilitates growth nationwide. Berkshire's name will help. Geico's brand potential is big. Borsheim's has lower operating cost, 15-20%, than most public companies.
Spotting Honest People (a question from a young boy)
After a few months of working with, you can tell if you are nervous or feel good about. Take credits for things? "People leave track in life. Best way to get what you want is to deserve what you want."
McDonald's & Spin-off
Can't separate real estate from franchising business. No more value for spin-off, huge problem.
Double Taxation: Corporate Ownership of Securities
WB: Drag on performance. Pay a lot of taxes, at 35% compared to 20% for individuals.
CM: Real mathematical disadvantage shrinks from long-term holding of these securities.
Due Diligence Problem
Over 30 years, mistakes (due diligence problem) never occurred on deals. Ninety-nine percent of deal making involves business economics.
Written by: Texirish
RK MEETING NOTES - 1998 (Not necessarily in order of questions)
Stock Market - Since 1982, interest rates are down and earnings are up, leading to higher P/E ratios.
When to Sell - (CM) Sell when you find something you like immensely better.
Existing Equities - IF market were selling ???? cheaper (I missed a key word, can anyone supply?), then would buy more of existing equities.
Returns on Equity - ROE's, particularly on tangible assets, have hit numbers that are unprecedented; maybe unsustainable. Would not plan to buy on basis these returns are sustained. If GDP is 3%/year real growth, 4-5% nominal growth, industry can't sustain today's high returns in total. Must keep levels of capital employed approximately equal to sustain returns; can't retain earnings and sustain high ROE's. The particularly big IF in the
market is ROE's.
CM comment - Lot's of increase in ROE based on Jack Welsh's (GE) strategy. Be a leader, adds to ROE. Share buyback also adds to ROE.
Investing in Japan - Asked about opportunities in Japan based on comments by other investors in OID. Answered that they look at all major markets. Less enthused about Japan than other investors. ROE very low in most of Japan businesses. Hard to get rich on low ROE businesses. Time is the friend of the high ROE business and the enemy of the low ROE business. Gave up on the "cigar butt" approach to investing years ago. Doesn't work with
Year 2000 Problem - BRK in good shape. Government units may be weakest links in chain - national, state, local and foreign.
Freddie Mac - Question on how interest rate changes would affect Fannie Mae and Freddie Mac. Said FRE not as interest rate sensitive as previously thought. They (FRE) also spend a great deal of time thinking about interest rate moves and what to do about them. A squeeze would be possible if interest rates got to very low levels, and then had a huge move up. This would be very painful. FRE works hard to avoid.
Question - What Keeps WEB Awake at Night? - Warren rephrased the question as being: "If you had one silver bullet to shoot at a problem, which problem would you shoot at?" (Charlie Munger commented that the only thing he had seen keep WEB worried and awake at night was sickness in his family.) WEB commented that they really don't worry; will do the best they can under the circumstances that exist at the time. The tough times are now when
the markets are high, not when the markets are bad.
In answer to a later question on general macro-economic conditions, but related to the above, WEB said that some things are "knowable" and some things are not. The proper approach is to decide (1) What is Important? (2) What is Important that is Knowable? (3) What is Important and Knowable that we can do something about? Then concentrate your efforts on the last items.
Value Line - CM commented that Value Line charts are a human triumph. He was referring to the 10-15 lines of data, not the graph at the top although they also look at that. Can determine trends quickly (e.g. 30 seconds!!). WEB commented that business schools should teach from Value Line.
Mergers - Mergers will not affect Geico's competitive position.
Reinsurance Business - is much more opportunistic. More underpricing taking place. Bigger threat.
KO Stock - Question about reasonableness of KO management buying back stock at 40 P/E. Said, based on history, that it was hard to find a time in the past when it wasn't reasonable to buy back KO stock. KO is the best large business in the world. Re question about KO "one-off" earnings from selling bottlers, WEB commented that rearranging and expanding bottling activities is a key strategy of KO. He ignores "one-off" profits. Keys are (1)
unit case volume and (2) shares outstanding. Look at earnings per case. Also comment about looking at price paid (e.g. buyer of KO bottlers?) relative to unit case volume, but I missed some of the details.
Geico Related Comments - Growth in policies in force mentioned by others in their posts. WEB said that the keys to valuing Geico (analogous to KO) are (1) policies in force and (2) underwriting profits per policy. In an earlier comment about valuing float relative to equity, said key was that float comes at a profit. Would not replace equity with float if float cost (e.g. 2-3% per year). Key is what float and cost of float will be 10-15
years from now.
Re risk, insurance businesses are safer on the downside and better on the upside.
Acquisitions - I noted two comments that caused me to think than a major acquisition is in the works. The first concerned the earnings of BRK. WEB said that Insurance businesses are first now, and Flight Safety was second. Accident to some extend as to what will be 2, 3, 4 in the future; depends upon acquisitions. He also stated later when talking about float that " May have other insurance businesses in the future." There was at least
one other hint, but I didn't capture it in my notes.
Japan Selling US Treasuries - In answer to a question about how would this effect US markets, WEB stated that as long as US runs a trade deficit, foreigners have to be net investors in the US. e.g. If Japan should sell US bonds and buy something in Europe, then Europe would have to invest in US. A key rule of economics is to always ask " ... and then what?" Also, if he were running Japan, an island nation with few natural resources, he
would want to hold a chunk of US treasury bonds.
How to Value a Business - Ask (1) What are the key variables in the business? and (2) Are they predictable? If you know both, you will know the right answers. The foregoing was both WEB's and CM's general answer to a number of questions about other business areas, e.g. technology. Their consistent position was that if they couldn't understand the business and predict its future, they weren't interested. Note Buffett's comment, widely
reported, that if he were teaching in business school, his final quiz would be how to value a technology business. If anyone submitted an answer, he would fail them. Point is ability to predict the future. It doesn't bother WEB and CM if others make money in these businesses.
Early in the meeting, WEB commented that successful investing (i.e. picking the right businesses to buy, or buy into) is different than the Olympics. In the Olympics, you win by being able to (e.g.) jump higher than others. In investing, you get the same reward by stepping over a one-foot bar as jumping over an 8-foot bar. So why try to pick the hard competitions? Why not stay with the ones you understand?
My memory - but not my notes - contains several references to building up cash rather than buying at today's market prices.
Also, like Tode, I was struck by WEB and CM's hints about today's BRK price. On general topic of selling BRK, WEB said they had both been fortunate in always having all that they needed, but it circumstances were different and they had bills to pay, then ........... ties in with CM comment about honesty.
At this point, I left my seat to try to ask a question, but time ran out, and I had to leave at the lunch break to finalize some furniture purchases and catch our early plane. If anyone has specific comments to share from the afternoon, I would appreciate receiving them via e-mail or the board.
Written by: Rextrut
Miscellaneous notes from the meeting:
1. Most telling comment: "It's fun. It really is" from CM, referring to investing in general and for BRK in particular.
2. At the beginning of the meeting I felt like a groupie, but when the meeting started it felt more like 2 professors with a rather large investment class.
3. Succession as an issue is the same for the WEB Foundation as it is for the rest of us. It seems this has been carefully thought out and has been taken care of. It seems this is not going to be a problem.
4. It seemed that CM went along with the silver investment more to humor WEB than anything else.
5. Strong emphasis on Insurance as being the driving force behind BRK.
6. Felt that they should have bought more of the publicly held companies at the time of initial purchase.
7. Very straight and blunt with their opinions.
8. WEB and CM would like to defer their deaths indefinitely.
9. Even if both studied technology to the exclusion of all else for a year, they still would not be adequately knowledgeable to invest in the technology area.
10. Giving back to the community. In driving around I noticed the Rose Blumkin old age home adjacent to the Jewish Community Center and the Rose Blumkin Theatre for the Performing Arts.
11. Both felt that that BRK was somewhat overvalued at the current stock price.
12. Shouldn’t have been surprised to see bodyguards around WEB and Susie, but I was.
13. Instructive and entertaining talks by Andy Kilpatrick and Janet Lowe at the Omaha Press Club. International press from England and Germany were present.
14. Unfailing good humor by WEB and Susie all weekend long under trying and tiring circumstances.