May 2009

Question: Berkshire seems to have done quite well in past few years - but the stock price hasn't quite kept pace... will Berkshire pay a dividend in the coming year or not? Buffett: If you take all the money we earned in the last 5 years and the stocks, bonds, businesses purchased and you sold them for cash on Dec. 31, 2008- we would have had a loss based on the conditions at that time. There ... read more

Question: What is your view of the market's valuation of Berkshire's shares? You say Berkshire has 2 components of values - the stocks and bonds.... and the earnings. When you compare 2007 to 2008 - the investments were down about 13% and the earnings were down about 4% - but the value the market was placing on your shares was down 31% Buffett: We think investments are worth what they're ... read more

Question: Running Berkshire is very complex and complicated - give us some insight for your reluctance to bring in your successor to benefit from your training? Buffett: The candidates we have for CEO are running businesses, doing things every day of an operating nature. And to sit around headquarters while I'm reading and on the phone and who knows what else- there wouldn't be anything to do. ... read more

Question: About 4 investment managers as successors - Can you please tell us without naming names how each of the 4 investment managers in 2008 did with money they're managing for their clients? Are they still on the list? Buffett: Let me just clear some things up - we have 3 candidates for the CEO position. All are internal candidates.  There are 4 possibilities for the investment job. We ... read more

Question: Where do you see the residential real estate market heading? Particularly in California? Buffett: It's hard to tell - from what I'm seeing.  I think you've seen something in medium to lower priced houses - maybe $750k and under houses - you've seen more bidders, a pickup in activity. You haven't seen much improvement in price. What it looks like - looking at our real estate brokerage ... read more

Question: Given the role of ratings agencies in the economic crisis - why do you retain such a large holding in Moody's? And why didn't you use your stake to do something to prevent conflicts of interest and these flawed models? Buffett: Five years ago - virtually everybody in the coutnry had this model in their mind - formal or otherwise that house prices couldn't fall. They were wrong. ... read more

Question: Wells Fargo Chairman said he didn't want to take TARP and said some of gov't programs were asinine - Munger - do you agree? Buffett - do you agree with Munger? Munger: Gov't reacting to biggest financial crisis in 70 yrs. decisions are being made in a hurry and under pressure. Unreasonable to expect perfect agreement with all of one's own ideas. I think the gov't is entitled to be ... read more

Question: What do you think future generations should know? What should be in curriculum to teach children about financial literacy? Buffett: There's a problem with financial literacy in the current generation. A number of outlets putting together programs to help with that. In the end - I think we make progress over time. I recommend you work with your students to make them literate. They will ... read more

Question: You have referred to derivatives as financial weapons of mass destruction. In the 1964 movie Dr. Strangelove - King Kong rides a weapon of mass destruction out of th bombay of his B-52 - as a longterm BRK shareholder - I feel like him today.....do you think large derivative positions are appropriate for a highly-rated insurance company? Will you add to these positions? Buffett: our ... read more

Buffett: Want to show you a ticket - $5 million Treasury bills on Dec. 19th to come due April 29th of this year. (puts ticket on big screens for us all to see) We sold them for 5 million and 90 dollars and 7 cents. If the person instead put their money under the mattress - they would have been 90 dollars better off. Negative yields on U.S. Treasury bills are an extraordinary thing - not sure ... read more