May 2009

Munger: a lot of new regulation coming wouldn't have been needed if accounting wasn't done better in banking. Yet - I haven't met an accountant who has said I'm ashamed of my own profession. If they don't have shame - it's not right. ... read more

Question: You've talked a lot about opportunity-costs. Can youdiscuss more important decisions over the past year? Buffett: When both prices are moving and in certain cases intrinsic business value moving at a pace that's far greater than we've seen - it's tougher, more interesting and more challenging and can be more profitable. But, it's a different task than when things were moving at more ... read more

Buffett: I think 90% of the repurchase actitivity I've seen in last 5 yrs didn't benefit shareholders - I think it's because management thought it was right thing to do and investor relations said to do it.  We will never buy our stock at a silly price. A significant % of corporate America has done that over the years. ... read more

Buffett: High-end retail has been hit hard. Big change in consumer behavior and I think it will last longer. I don't think the experience of the last couple years will go away fast. I wouldn't think our retail businesses will do great for a considerable period of time. In retail real estate - I would think that would be a tough field to be in. I think shopping centers will see vacancies that are ... read more

Question: At what price does it become compelling to invest in newspaper business or is there no price in today's environment? Buffett: The current environment is accentuating problem in newspapers -but it's not the basic cause. Charlie and I read 5 a day. We'll never give them up. We would not buy them at any price. They have the possibility of going to unending losses. They were essential to ... read more

Question: I'm 11 years old. How will inflation affect my generation? How is Berkshire investing to prepare for this time? Buffett: It's certain we'll have inflation over time. We are following policies in this country now to stimulate business - which are bound to have some inflationary consequences. We're building up a lot of external debt. Politicians talk about taxpayers paying for this and ... read more

Buffett: I frequently ask CEOs of companies what they would do differently if they owned the whole thing themselves. They give me a list of things. There is no list at Berkshire. We basically run this place the same way we'd run it if we owned 100%. Munger: Berkshire Hathaway's system has legs. ... read more

Question: Berkshire doesn't have simple, easy to grasp business model. If the 2 of you were outside investors - would you still invest in Berkshire today? Buffett: We have a business that's owned by people. We have a different shareholder base. We have people that understand their business differently. I don't see anybody else in the U.S. that could adopt that model. It is a deeply embedded ... read more

Question: What do you think Ben Graham would have said about derivatives? Buffett: Probably what I said in 2002. Place added strains on fragile economic system. But if they were mispriced - he would act accordingly. In 1929 - Congress decided it was dangerous to let people borrow money against securities - said Fed should regulate how much people could borrow. And the Federal Reserve enacted ... read more

Question: On the stimulus bill and government funding - Isn't it better if money from government went to hard assets and putting people to work? Munger: Let me answer that one - yes. Buffett: In the 1930's a lot of wonderful things were done with money used to stimulate the economy. That should be the goal and the model. I did get a notice from Social Security telling me I was getting $250 ... read more