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Generado automáticamente a partir de los subtítulos de YouTube y depurado ligeramente: la puntuación y los nombres propios
pueden contener errores. No nos pertenece; todos los derechos corresponden a Daily Journal / Yahoo Finance.
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>>> HELLO, EVERYONE. WELCOME BACK TO YAHOO FINANCE . BERKSHIRE HATHAWAY'S NUMBER TWO, CHARLIE MUNGER IS ABOUT TO SPEAK AT THE DAILY JOURNAL'S ANNUAL MEETING. MUNGER IS A CHAIRMAN OF THE BOARD AND WILL BE TAKING SHAREHOLDER QUESTIONS. NORMALLY HUNDREDS OF INVESTORS FROM ALL OVER THE COUNTRY ATTEND THE MEETING TO HEAR CHARLIE. >> ABSOLUTELY. THIS YEAR, DUE TO COVID, THE MEETING IS BEING HELD AT THE DAILY JOURNAL'S DOWNTOWN OFFICES IN L.A. IT IS ONE OF THE RARE OCCASIONS WE GET TO HEAR HIM SPEAK CANDIDLY ABOUT THE ECONOMY. LET'S GO STRAIGHT TO L.A. TO HEAR FROM CHARLIE MUNGER AND JERRY SALZMAN. THANK YOU SO MUCH. CHARLIE, THE FLOOR IS YOURS. >> THIS BUSINESS OF THE MEETING IS TO ELECT FOUR DIRECTORS. WE HA THEPRIES AND WE HAVE THE INSPECT YOUR OF ELECTIONS. WE HAVE EVERYTHING HERE. THAT IS NOW DONE. THE DAILY JOURNAL'S FORMAL BUSINESS IS OVER AND I WERE GOING TO ANSWER QUESTIONS IN THE TRADITION THAT HAS COME TO BOTH THE DAILY JOURNAL AN BERKSHIRE HATHAWAY. YOUR ON WITH THE FIRST QUESTION. >> Reporter: CNBC. I'VE BEEN COLLECTING SHAREHOLDER QUESTIONS. WE WILL GO OVER AS MANY AS WE CAN. BUT, WE WANTEDTOSTART WITH QUESTIONS THAT WERE VERY SPECIFIC TO THE DAILY JOURNAL FIRST. FIRST QUESTION FROM SOMEONE WHO ASKED TO REMAIN ANONYMOUS BUT THE FIRST PART OF THE QUESTION IS, HOW DOES THE DAILY JOURNAL PLAN TO HANDLE INVESTMENT PORTFOLIO AFTER CHARLIE STEPS BACK? >> CHARLIE, I THINK YOU SHOULD ANSWER THAT. >> WILL HANDLE IT AS LONG AS WE CAN AND WHEN I AM GONE, OR IMPAIRED, WE WILL GET SOMEONE ELSE TO DO IT. >> IN THE SECOND QUESTION, THE SECOND PART OF THE QUESTION IS, WHAT ARE THE REASS FOR JERRY AND PETER COFFIN LEAVING THE BOARD? >> WE ARE GOING TO HAVE TO MAKE CHANGES IN THE FUTURE BECAUSE JRRY AND I ARE SO SUPER ATTENUATED. PETER DID NOT WANT TO DO IT ANYMORE. AND THAT IS ALL WE HAVE TO SAY. >> THE NEXT QUESTION COMES IN FROM SARAH ANDERSON AND THE SUCCESSION QUESTIONS, I DID RECEIVE SEVERAL OF THEM SO I WANTED TO FOLLOW UP WITH THIS ONE. WHAT IS THE CURRENT DAILY JOURNAL 'S MANAGEMENT SUCCESSION PLAN AND WHO WILL BE IN CHARGE AFTER MR. SALZMAN'S RETIREMENT? >> THE LONG-TERM PLAN TO REPLACE BOTH JERRY AND I BECAUSE HE IS 83 AND I AM 98, SO OBVIOUSLY, WE HAVE A SUCCESSION PLANNING TO DO IN THE NEAR FUTURE. WE WILL DO IT AS FAST AS WE CAN. >> Reporter: THE NEXT QUESTION THE COMES IN IS FROM SOMEONE WHO SAYS HE IS A CONCERNED SHAREHOLDER. HIS NAME IS FRANKIE LAMB AND HE SAYS A NOTICE OF THE COMPANIES USING MARGIN DEBT PURCHASE OVERSEAS SECURITIES AND THE OVERSEAS SECURITY IS NOT REPORTED IN THE S.E.C. FILING. AS A SHAREHOLDER, AM I ENTITLED TO KNOW WHAT OVERSEAS SECURITY WE OWN ON MARGIN? THANK YOU FOR TAKING MY QUESTION. >> THE PRACTICE AT DAILY JOURNAL AND BERKSHIRE IS THE SAME. WE DISCLOSE THAT WE HAVE UNDER THE RULES BECAUSE WE DO NOT KNOW IT THAT WE WANT PEOPLE TO KNOW WHAT WE ARE BUYING AND SELLING. WE TELL EVERYBODY WHAT WE HAVE TO UNDER THE RULES AND WE KEEP IT CONFIDENTIAL UNTIL THEN. THAT IS OUR SYSTEM. >> THIS QUESTION COMES IN FROM DANIEL KOENIG. SAYS I AM A SMALL RETAIL SHAREHOLDER AND I BASICALLY ONLY ONE QUESTION. IN THE LATEST, THE COMPANY STATED THAT JOURNAL TECHNOLOGIES SERVES 30 STATES IN THE UNITED STATES. ON THE WEBSITE AND ALL THE OTHER OLDER, SAYS THAT IT SERVES 42 STATES. WONDER WHAT IS THE REASON FOR THE DECLINE? I WOULD APPRECIATE ANY EXPLANATION. >> JERRY, YOU TAKE THAT ONE. >> THE REASON FOR THE DECLINE , TO A CERTAIN DEGREE, IS SEVERAL YEARS AGO, WE DECIDED NOT TO SUPPORT A VERY OLD LEGACY SYSTEM WHICH HAD A NUMBER OF SMALLER AGENCIES, IN ADDITION TO A NUMBER OF LARGER AGENCIES AND, WE EXPECTED, MANY OF THE SMALLER AGENCIES DECIDED NOT TO GO TO OUR MAIN SYSTEM, WHICH WE CALL ECOURT. THAT IS THE REASON FOR THE DECLINE IN THOSE NUMBERS. >> A BYTHE WAY, OTHER SOFTWARE COMPANIES AVOID OBSOLETE THING A SYSTEM BECAUSE THEY LOSE SOME BUSINESS, BUT WE WANT THE CUSTOMERS TO HAVE THE MORE MODERN SYSTEM. >> Reporter: A RELATED FOLLOW- UP QUESTION ON THAT COMES FROM JIM MITCHELL IN COSTA MESA. HE SAYS, WHO ARE THE PRINCIPAL COMPETITORS IN SUPPLYING SOFTWARE TO COURT SYSTEMS AND DO HAVE A GUESS AS TO WHO HAS WHAT CO-CHAIR? >> JOURNAL TECHNOLOGIES HAS THE BIG SHARE. AND THE REST IS SCATTERED. PARDON ME. I MEAN THAT TYLER TECHNOLOGIES HAS THE BIG MARKET SHARE. >> JIM HALL WRITES IN AND SAYS, MR. MUNGER, I'VE BEEN A SHAREHOLDER AND I APPRECIATE THE QUALITY. IN THE ANNUAL REPORT YOU NOTED THAT THE PROSPECTS AND SOFTWARE NOW SEEMED ESPECIALLY INDUSTRY. WOULD YOU CARE TO EXPOUND ON THAT THOUGHT? >> WHAT IS INTERESTING IS THE COURTS OF THE WORLD VE BEEN IN THE STONE AGE AND THERE IS NO REASON THAT LAWYER SHOULD GO DOWN THROUGH HEAVY TRAFFIC AWAY R SOME LITTLE MOTION. IT SHOULD ALL BE DONE ON ZOOM AND SO FORTH. THE FILING SHOULD BE DONE ELECTRONICALLY. SO, WHAT THERE IS A HUGE MARKET FOR THE AUTOMATION OF THE COURTS AND IT IS EARLY. THAT IS A GOOD NEWS. IT IS A BIG MARKET. THE BAD NEWS IS IT IS A SLOW WAY TO GRIND AHEAD IN SOFTWARE BECAUSE IT IS VERY BUREAUCRATIC. RFP GOVERNMENT BODIES AND IT IS A HUGE MARKET AND IT IS INTRINSICALLY GOING TO BE VERY SLOW TO GET DONE. THAT IS THE GOOD NEWS AND BAD NEWS. WE HAVE A HUGE MARKET AND IT IS GOING TO BE SLOW AND BUREAUCRATIC. >> THE NEXT QUESTION COMES IN -- >> THERE'S NOT ANY DOUBT ABOUT WHAT WILL HAPPEN. THE COURTS WILL GET MORE EFFICIENT AND GET WITH THE MODERN WORLD. AND SO ALSO, THE DISTRICT ATTORNEY'S OFFICES AND THE PROBATION OFFICES. >> Reporter: THE NEXT QUESTION COMES FROM TOM SEYMOUR. HE SAYS IN JANUARY, IT WAS QUOTED, CHINA IS UN-INVESTABLE AT THIS MOMENT. NEVER INVESTED IN CHINA LONG OR SHORT. WHY IS THAT DO NOT TRUST THE DATA. I DO NOT TRUST THE RELATIONSHIP BETWEEN THE UNITED STATES A CHILD ANYMORE. I THINK INVESTMENTS IN CHINA COULD BE CONFISCATED AND THERE'S RISK AND THAT. WITH A SIGNIFICANT PERCENTAGE IS INVESTED DIFFERENTLY, YOU FEEL DIFFERENTLY. >> ONLY THE FUTURE KNOWS WHO IS GOING TO BE RIGHT, BUT CHINA IS A BIG MODERN NATION. IT HAS A HUGE POPULATION AND HUGE MODERNITY THAT HAS, THE PAST 30 YEARS. AND WE INVESTED SOME MONEY IN CHINA BECAUSE WE COULD GET MORE VALUE IN TERMS OF THE STRENGTH OF THE ENTERPRISE AND THE PRICE OF THE SECURITY THEN WE COULD GET THE UNITED STATES. OTHER PEOPLE, INCLUDING SEQUOIA, THE LEADING VENTURE CAPITAL FIRM IN THE UNITED STATES, HAS MADE THE SAME DECISIONS WE HAVE. I AM SYMPATHETIC. HE IS NERVOUS. HE DOES NOT VE JOIN US. DIFFERENT FOLKS HAVE DIFFERENT OPINIONS. I FEEL ABOUT RUSSIA THE WAY THAT HE FEELS ABOUT CHINA. I DON'T INVEST IN RUSSIA, SO I CANNOT CRITICIZE HIS POINT OF VIEW. I JUST REACHED A DIFFERENT CONCLUSION. >> Reporter: OKAY. THIS QUESTION COMES IN FROM BILL ROBERTS. HE SAYS, CHARLIE, YOU AND WARREN HAVE BEEN MAKING CONCENTRATED INVESTMENTS SINCE THE 1950s. MANY OF THESE INVESTMENTS HAVE LED TO GAINS, BUT MORE IMPRESSIVELY, NONE OF THEM HAVE LED TO SIGNIFICANT LOSSES. AS FAR AS I CAN TELL, NEITHER OF YOU HAVE EVER LOST MORE THAN A FEW PERCENTAGE POINTS OF EQUITY IN ANY SINGLE INVESTMENT. IT HAS TAKEN ON AN ADDITIONAL $49 AND MARGIN DEBT TO MAKE INVESTMENTS. WHAT MAKES YOU SURE THAT THESE INVESTMENTS WILL NOT LEAD TO A SUBSTANTIAL IMPAIRMENT OF DAILY JOURNAL'S EQUITY CAPITAL WHICH COULD IMPACT THE ABILITY TO INVEST THE RESOURCES NEEDED TO OPERATE THE SOFTWARE BUSINESS. >> OF URSE, IF YOU INVEST IN SECURITIES COMING OF THE RISK THAT IF THEY GO DOWN, YOU LOSE MONEY INSTEAD OF MAKE IT. BUT IF YOU HOLD A DEPRECIATING CURRENCY THAT IS LOSING PURCHASING POWER, ONBALANCE, WE PREFER THE RISK WE HAVE TO THOSE THAT WE ARE AVOIDING AND WE DO NOT MIND A TINY BIT OF MARGIN DEBT. >> Reporter: I HAVE LOTS AND LOTS OF QUESTIONS ON ALI BABA. THAT WAS ONE QUESTION I RECEIVED MORE THAN ANYTHING. I WILL DIG DEEPER THROUGH SOME OF THESE. SOMEONE FROM TORONTO WROTE IN AND SAID, AS A DAILY JOURNAL OWNER, DO WE OWN LOCAL SHARES OF ALIBABA. DISLIKE OF US LEGAL OWNERSHIP OF THAT BUSINESS OR DO WE HAVE A VARIABLE INTEREST AND IS THAT THE SAME. NET, WHAT DO WE OWN? AND I GOT A SERIES OF QUESTIONS RELATED TO THAT THOUGHT. >> WHEN YOU BUY ALIBABA COMING TO GET SORT OF A DERIVATIVE, BUT ASSUMING THERE IS A REASONABLE HONOR AMONG CIVILIZED NATIONS, THAT WRIST DOES N EM ALTHAT BIG TO ME. >> WE HAVE A LOT OF QUESTIONS JUST ABOUT THE INVESTING IN CHINA RISK AND I WILL ASK THIS ONE. HE IS INTERESTED IN YOUR TAKE ON CHINA AND CHINESE STOCK EXPOSURE FOR THE LONG-TERM. HE SAYS IT IS BECOMING QUITE EVIDENT THAT CHINESE COMPANIES COULD BE BANNED FROM DOING BUSINESS IN THE WESTERN WORLD OR MAYBE SOME OF THE EASTERN COUNTRIES, TOO, BECAUSE A NUMBER OF THE FOLLOWING REASONS, THE SECURITY THREAT ISSUES, POTENTIAL CONFLICT OVER TAIWAN AND INABILITY TO MEET WESTERN ACCOUNTING STANDARDS AND NUMBER FOUR, HUMAN RIGHTS ISSUES. CONSIDERING THOSE RISKS MENTIONED ABOVE, WHY WOULD ANYONE AS SMART AS MUNGER OR BUFFET CONSIDER INVESTING IN THE CHINA COMPANIES? >> WE HAVE MORE STRENGTH PER DOLLAR INVESTED. IN CHINA. THE COMPANIES WE INVEST IN OUR STRONGER, RELATIVE TO THE COMPETITION AND PRICED LOWER. THAT IS WHY WE ARE IN CHINA. >> Reporter: THIS CAME IN FROM WESLEY. ALTHOUGH THE FINANCIALS SEEM STRONG, TO THE POLITICAL PRESSURES FROM THE CHINESE GOVEMENTHEREYOU AT ALL? >> THE CHINESE GOVERNMENT IS WORRYING ALL OF THE CAPITALISTS IN THE WORLD MORE THAN IT USED TO. AND, OF COURSE WE DO NOT LIKE THAT. WE WISH THAT CHINA AND THE UNITED STATES GOT ALONG BETTER AND IF YOU STOP TO THINK ABOUT IT, BOTH CHINA AND THE UNITED STATES HAVE LOWETHE EXISTING TENSIONS TO ARISE. WHAT BAD IS EVER GOING TO HAPPEN TO CHINA OR THE UNITED STATES IF WE TWO ARE CLOSE. MAKE GOOD FRIENDS OUT OF THE CHINESE AND VICE VERSA, WHO IS EVER GOING TO BOTHER US? OF COURSE WE SHOULD MAKE FRIENDS WITH CHINA. AND OF COURSE WE SHOULD LEARN TO GET ALONG WITH PEOPLE WHO HAVE A DIFFERENT SYSTEM OF GOVERNMENT. WE LIKE OUR GOVERNMENTS BECAUSE WE ARE USED TO IT AND IT HAS ADVANTAGES OF PERSONAL FREEDOM. CHINA COULD NEVER HAVE HANDLED IT'S LIFE WITH A GOVERNMENT LIKE OURS. IT WOULD NOT BE IN THE POSITION THAT THEY ARE IN. THEY HAD TO PREVENTIVE 500 LLIOPEOP OR 600 MILLION PEOPLE FROM BEING BORN IN CHINA. THE MEASURED THE WOMEN'S MENSTRUAL PERIODS WITH THEY CAN'T WORK AND ABORTED THOSE WHO WERE NOT ALLOWED TO HAVE CHILDREN. YOU CANNOT DO THAT IN THE UNITED STATES AND IT REALLY NEEDED DOING IN CHINA. SO THEY DID WHAT THEY HAD TO DO, USING THEIR METHODS AND I DON'T THINK WE SHOULD BE CRICIZING CHINA, WHICH HAS TERRIBLE PROBLEMS BECAUSE THEY'RE NOT JUST LIKE THE UNITED STATES. THEY DO SOME THINGS BETTER THAN WE DO. THEY SHOULD LIKE US AND WE SHOULD LIKE THEM. I AM TOTALLY, I THINK NOTHING IS CRAZIER THAN PEOPLE O FOMENT RESENTMENTS ON EITHER SIDE OF THAT ONE. >> Reporter: ANOTHER SHAREHOLDER WROTE IN AND SAID, HOW DO YOU THINK THE UKRAINE SITUATION WILL BE RESOLVED, IN YOUR OPINION? >> I HAVE NO INSIGHT THAT IS ANY BETTER THAN ANYBODY ELSE ON THAT ONE. MOST OF THESE THINGS IN THE DAYS WHEN BOTH PARTIES HAVE HUGE NUMBERS OF HYDROGEN BOMBS, GET RESOLVED BECAUSE THE ALTERNATIVE IS SO AWFUL THAT EVEN AN IDIOT CAN SEE THAT THE QUESTION OUGHT TO BE RESOLVED. THAT IS A WAY IT HAS WORKED SO FAR AND I HOPE IT KEEPS WORKING THAT WAY. WE LIVE IN THE PAX NUCLEANA. IT IS QUITE IRRESPONSIBLE WHEN THE LEADERS IN THE MODERN AGE GET TENSIONS OVER BORDER INCIDENTS AND SO FORTH. >> Reporter: YOU SAID THAT WE SHOULD PARTNER UP WITH CHINA. DOES IT CONCERN YOU TO SEE RUSSIA PARTNERING UP WITH CHINA AND THAT RELATIONSHIP GETTING COZIER? >> IT IS HARD TO THINK OF ANYTHING THAT IS MORE STUPID. BOTH SIDES ARE DOING IT. THE POLITICAL LEADERS ON BOTH SIDES ARE TRYING TO MAKE POINTS WITH THEIR OWN CONSTITUENCIES BY SHOWING HOW TOUGH THEY ARE. THAT IS MASSIVELY STUPID ON BOTH SIDES. >> Reporter: ANOTHER QUTION CAME IN ON ALIBABA AND I KNOW THAT WE HAVE COVERED A LOT OF GROUND OF THIS. THIS IS SLIGHTLY DIFFERENT. HE SAYS, ALIBABA IS A TOP THREE HOLDER FOR YOUR. THE BEST COMPARABLE IS AMAZON, WHICH IS TRIPLE OF ' SPEED. WHAT DISCOUNT SHOULD AMERICAN INVESTORS SEEK WHEN IT COMES TO PURCHASING CHINESE STOCK? AND CONSIDERING THE FORTUNATE BERKSHIRE HATHAWAY MADE , WHY DOES IT NOT PURCHASE ALIBABA? >> WARREN, LIKE MANY OTHER INTELLIGENT PEOPLE, LIKES TO INVEST WHERE HE IS PERSONALLY COMFORTABLE. FOR SOME REASON, I AM ARE COMFORTABLE WITH THE CHINESE THEN HE IS. THAT IS A MINOR DIFFERENCE. AND, I HAVE ALL KINDS OF PLACES WHERE I'M JUST LIKE WARREN. I HAVE ALL KINDS OF THINGS WHERE I'NOCOMFORTABLE. I JUST DO NOT GO NEAR THEM. I THINK AN OLD GUY IS ENTITLED TO INVEST WHERE HE WANTS TO INVEST IN. >> Reporter: WHAT MAKES YOU UNCOMFORTABLE? >> IT'S OKAY TO HAVE SOMETHING THAT YOU JUST DO NOT WANT TO BOTHER WITH. >> Reporter: LIKE CRYPTO? >> I N'T THINK ALIBABA IS AS ENTRENCHED AS SOMETHING LIKE APPLE AND ALPHABET. I THINK THE INTERNET IS GOING TO BE A VERY COMPETITIVE PLACE, EVEN IF YOU ARA BIG INTERNET RETAILER. >> Reporter: CHARLIE, CRYPTO WAS ANOTHER QUESTION I GOT A LOT OF. I WILL AS THIS ONE FROM CARL WHO SAYS CRYPTO IS A $2 TRILLION ASSET CLASS. ARE YOU WIING TO ADMIT THAT YOU MISSED SOMETHING? >> I CERTAINLY DID NOT INVEST IN CRYPTO. I AM PROUD OF THE FACT THAT I HAVE AVOIDED IT. IT IS LIKE SOME VENEREAL DISEASE OR SOMETHING. I REGARD IT AS BENEATH CONTEMPT. SOME PEOPLE THINK IT IS MODERNITY AND THEY WELCOME A CURRENCY THAT IS SO USEFUL IN EXTORTIONS AND KIDNAPPINGS AND SO ON AND SO ON. TAX EVASION. AND, OF COURSE, THE ENVY, EVERYBODY HAS TO CREATE HIS OWN NEW CURRENCY. AND I THINK THAT IS CRAZY, TOO. I AM NOT --I WISH IT HAD BEEN BANNED IMMEDIATELY. I ADMIRE THE CHINESE FOR BANNING IT. I THINK THEY WERE RIGHT AND WE HAVE BEEN WRONG TO ALLOW IT. >> Reporter: PERHAPS THIS IS THE APPROPRIATE FOLLOW-UP. THIS COMES FROM MICAH WHO ASKS, MR. MUNGER COMING TALKED WITH THE EVILS OF CRYPTOCURRENCY. HOW DO YOU FEEL ABOUT THE FEDERAL RESERVE REPAIRING TO WATCH A CENTRAL BANK DIGITAL CURRENCY. DO THINK THIS WILL BEEN BENEFICIAL OR HARMFUL TO THE STRENGTH AND RESILIENCY OF OUR MARKETS. >> THE FEDERAL RESERVE DID HAVE A CURRENCY IF THEY WANT ONE. THAT WOULD BE -- WE HAVE A DIGITAL CURRENCY ALREADY, IT IS CALLED A BANK ACCOUNT. THE BANKS ARE ALL INTEGRATED WITH THE FEDERAL RESERVE SYSTEM. WE ALREADY HAVE A DIGITAL CURRCY. I LIKE DIGITAL CURRENCY FOR THE UNITED STATES. >> Reporter: THIS IS ANOTHER QUESTION FROM TOM WHO SENT IN SEVERAL THAT WERE PRETTY GOOD THIS ONE, HE SAYS, TWO YEARS AGO AT THIS MEETING, YOU SAID, I THINK THERE ARE LOTS OF TROUBLES COMING. THERE IS TOO MUCH WRETCHED EXCESS. SINCE THE MEETING WE'VE SEEN 860 SPECS AND THE GAMESTOP PHENOMENON. I CAN IMAGINE CHANGE YOUR MIND. I WONDER WHAT YOUR FAVORITE STORY OF WRETCHED CESS FROM THE LAST YEAR. >> CERTAINLY THE GREAT SQUEEZE AND GAMESTOP WAS WRETCHED EXCESS. CERTAINLY THE BITCOIN THING IS I WOULD ARGUE THAT VENTURE CAPITALISTS THROWING TOO MUCH MONEY TOO FAST AND THERE IS A CONSIDERABLE WRETCHED EXCESS AND VENTURE CAPITAL AND OTHER FORMS OF PRIVATE EQUITY. WE HAVE A STOCK MARKET WHICH SOME PEOPLE USE LIKE A GAMBLING PARLOR. THE TRANSACTIONS OF THE PEOPLE WHO LOVE THE GAMBLING PARLOR PART OF THE BUSINESS AND THOSE WHO WANT TO MAKE LONG-TERM INVESTMENTS AND TAKE CARE OF THEIR OLD AGE AND SO FORTH. YOU MODEL INTO ONE MARKET AND IT GOES OUT OF CONTROL BECAUSE THE STOCK MARKET BECOMES AN IDEAL GAMBLING PARLOR ACTIVITY. I DON'T THINK THAT OUGHT TO HAVEBEEN ALLOWED, EITHER. IF I WERE THE DICTATOR OF THE WORLD, I WOULD HAVE SOME SORT OF A TAX ON SHORT-TERM GAMES THAT MADE THE STOCK MARKET VERY MUCH LESS LIQUID. AND DROVE OUT THIS MARRIAGE OF GAMBLING PARLOR AND LEGITIMATE CAPITAL DEVELOPMENT OF THE COUNTRY. IT IS NOT A GOOD MARRIAGE. I THINK WE NEED A DIVORCE. >> Reporter: HOW WOULD A DIVORCE WORK? >> WELL, YOU'D HAVE TO HAVE SOME KIND OF A WORLD THAT MADE STOCKS WAY LESS LIQUID. WE HAVE ALL THE REAL ESTATE WE WANT. ALL OF THE SHOPPING CENTERS AND AUTO AGENCIES AND SO FORTH WITHOUT HAVING A PERFECT LIQUID MARKET. WE COULD HAVE A STOCK MARKET THAT IS WAY LESS LIQUID. WHEN I WAS YOUNG, WE HAD A STOCK MARKET THAT WAS WAY LESS LIQUID. WHEN I WAS AT THE HARVARD LAW SCHOOL, RARELY TRADED A BILLION IN THE DAY. WE DO NOT NEED ONE THAT LIQUID. WHAT WE ARE GETTING IS WRETCHED EXCESS AND DANGER FOR THE COUNTRY. EVERYBODY LOVES IT BECAUSE IT IS LIKE A BUNCH OF PEOPLE GETTING DRUNK AT A PARTY THAT THEY ALL HAVE SO MU FUABOUT GETTING DRUNK THAT THEY DO NOT THINK ABOUT THE CONSEQUENCES. WE DO NOT NEED THIS WRETCHED EXCESS. IT HAS BAD CONSEQUENCES. YOU CAN ARGUE THAT THE WRETCHED EXCESS OF THE 20s GAVE US THE PART GREAT DEPRESSION AND THE GREAT DEPRESSION GAVE US HITLER. THIS IS SERIOUS STUFF. IT IS AWFULLY HARD, AND A LOT OF PEOPLE LIKE IT TO A DRUNKEN BRAWL. THOSE OF THE PEOPLE WHO ARE WINNING. A LOT OF PEOPLE ARE MAKING MONEY OUT OF OUR BRAWL. >> Reporter: MARK LAZZARO WRITES IN AND SAYS, YOU MENTIONED THAT WE ARE IN A BIG BUBBLE. CAN YOU ELABORATE ON THAT AND HOW IS IT LIKELY TO PLAY OUT? >> I THINK EVENTUALLY, THERE WILL BE CONSIDERABLE TROUBLE BECAUSE OF THE WRETCHED EXCESS, THAT IS WAY IT HAS USUALLY WORKED IN THE PAST. BUT WHEN WILL, AND HOW BAD IT WILL BECOME I CANNOT TELL YOU. >> Reporter: MIKE BRANCH FROM MICHIGAN WRITES IN AND SAYS, CHARTS, TENICA, MOMENTUM AND A I SEEM TO DOMINATE THE MARKET THESE DAYS. ARE OLD SCHOOL VALUATION METHODS DEAD? >> THEY WILL NEVER DIE. THE IDEA OF GETTING MORE VALUE THAN YOU PAY FOR, THAT IS WHAT INVESTMENT IS IF YOU WANT TO BE SUCCESSFUL, YOU HAVE TO GET MORE VALUE THAN YOU PAID FOR. AND SO, IT'S NEVER GOING TO BE OBSOLETE. NOW, YOU CAN GET A WHOLE BODY OF PEOPLE,AND THEYDON'T EVEN KNOW WHAT THEY ARE BUYING, THEY ARE JUST QUOTING SOME TICKER. I DO NOT THINK IT IS HELPFUL TO HAVE. THINK OF THE PAST CRAZY BOOMS AND HOW THEY WORKEDT. THE SOUTH SEAS BUBBLE. THE BUBBLE OF THE LATE 20s AND SO ON. WE HAVE HAD THIS SINCE THE DAWN OF CAPITALISM. WE HAD CRAZY BUBBLES. >>> LEONARD WRITES IN AND SAYS HE IS A MECHANICAL ENGINEER FROM GERMANY AND HE SAID THE LAST YEAR HAS BEEN CHALLENGING FOR HIM BECAUSE HE STARTED WORKING FULL-TIME AND RAISING A 4-YEAR-OLD AND FINISHING HIS PHD AND SUPPORTING HIS WIFE FOR HER STATE EXAMINATION BUT IT HELPED HIM STAY RATIONAL BY LISTENING TO YOUR INTERVIEWS AND SPEECHES AND QUESTIONS AND ANSWERS ON A DAILY BASIS. WANTS TO THANK YOU FOR BEING SUCH AN INSIGHTFUL GENEROUS AND STRAIGHTFORWARD AND HONEST SPEAKER. IS QUESTION IS, DO THINK IT IS LIKELY THAT WE WILL EXPRESS A MAJOR INCREASE IN INTEREST RATEIN THE UPCOMING DECADES, FOR EXAMPLE IN THE PERIOD BETWEEN 1950 AND 1980? >> THAT, OF COURSE, IS A VERY INTELLIGENT QUESTION AND A VERY DIFFICULT QUESTION. WHEN YOU THROW MONEY, WHEN YOU PRINT MONEY ON THE SCALE OF AT MODERN NATIONS ARE PRINTING IT, JAPAN, THE UNITED STATES, EUROPE, ET CETERA. WE ARE GETTING INTO NEW TERRITORY IN TERMS OF SIZE. THE PANESE BOUGHT BACK NOT ONLY A LOT OF THEIR OWN DEBT, BUT A LOT OF THE COMMON STOCKS TO THE FEDERAL RESERVE SYSTEM. YOU CAN IMAGINE HOW MUCH MONEY PRINTING JAPAN HAS DONE AND THEY HAVE NOT HAD ALL THAT MUCH INFLATION AND IT IS A VERY ADMIRABLE CIVILIZATION. IN FACT, YOU CAN ARGUE THAT JAPAN IS ONE OF THE MORE ADMIRABLE CIVILIZATIONS OF THE WHOLE WORLD. AND IN SPITE OF ALL THIS VERY EXTREME GOVERNMENT MONEY PRINTING THAT THEY HAVE DONE, THEY HAVE NOT HAD TERRIBLE CONSEQUENCES. THEY HAD 25 YEARS OF STASIS WITH LIVING STANDARDS NOT IMPROVING VERY MUCH. I DO NOT THINK THAT CAME FROM THE MACROECONOMIC POLICIES. I THINK THAT CAME FROM THE RISE OF TOUGH COMPETITION FOR THE EXPO POWHOUSE FROM CHINA AND KOREA. BUT, AT ANY RATE, IT IS WEIRD WHAT IS HAPPENING AND NOBODY KNOWS FOR SURE HOW IT IS GOING TO WORK OUT. I THINK IT IS ENCOURAGING THAT JAPAN CAN PRINT AS MUCH MONEY AS IT HAS AND REMAIN AS CIVILIZED AND CALM AND AS ADMIRABLE AS IT HAS. SO, I HOPE TO GOD THE UNITED STATES HAS A SIMILAR HAPPY OUTCOME, BUT I THINK THE JAPANESE ARE BETTER ADAPTED FOR I THINK IT IS A DUTY FILLED CIVILIZED BUNCH OF PEOPLE, A LOT OF THEM ARE OLDER AND NOT MANY YOUNG PEOPLE AND THEY JUST SUCK IT IN AND COPE. IN OUR COUNTRY, WE HAVE TERRIBLE TENSIONS. IT IS HARDER TO RUN A COUNTRY WHICH IS NOT MONO ETHNIC LIKE JAPAN. THERE'S SOME PROFESSOR AT HARVARD THAT IS WRITTEN EXTENSIVELY ON THIS SUBJECT. IT IS WAY HARDER TO RUN A NATION LIKE THE UNITED STATES WITH DIFFERENT ETHNICITIES AND GROUPS AND SO FORTH. THAN IT IS TO RUN JAPAN. JAPAN IS BASICALLY A MONO ETHNIC CIVILIZATION, WHICH IS PROUD OF ITS ETHNICITY AND OF COURSE, THEY CAN COPE WITH IT, WITH THE TROUBLES BETTER THAN SOME OTHER PEOPLE CAN. >> Reporter: CHARLIE -- >> WE DON'T KNOW WHERE WE ARE GOING. THERE'S NEVER BEEN ANYTHING QUITE LIKE WHAT WE ARE DOING NOW. WE DO KNOW FROM WHAT HAS HAPPENED IN OTHER NATIONS, THAT IF YOU TRY AND PRINT TOO MUCH MONEY, YOU WILL EVENTUALLY CAUSE THIS TERRIBLE TROUBLE. AND WE ARE CLOSER TO TERRIBLE TROUBLE THAN WE HAVE BEEN IN THE PAST, BUT IT MAY STILL BE A LONG WAY OFF. I RTAIY HOPE SO. >> Reporter: ME, TOO. >> AND RIGHT AGAIN ON THE SAME SUBJECT, WHAT ARE THEY CURRENT THOUGHTS ON THE INFLATIONARY ENVIRONMENT. PLEASE COMPARE AND CONTRAST IT TO THE 1970s. >> WHEN, AFTER THE 70s, WHEN THE PRIMATE WAS TAKEN TO 20% AND THE GOVERNMENT WAS PAYING 15% ON GOVERNMENT BONDS, THAT WAS A HORRIBLE RECESSION. AND LAST A LONG TIME AND IT CAUSED A LOT OF AGONY AND I CERTAINLY HOPE WE ARE NOT GOING THERE AGAIN. I THINK -- THE CONDITIONS THAT ALLOWED HIM TO DO THAT WITHOUT INTERFERENCE FROM POLITICIANS WERE VERY UNUSUAL. AND I THINK THAT THE 2020 HINDSIGHT, WAS A GOOD THING THAT HE DID THAT, BUT I WOULD NOT PREDICT THATR WE WOULD BE ABLE TO HAVE A NEW VOLCKER . I INK THE NEW TROUBLES WILL BE DIFFERENT FROM THE OLD TROUBLES. >> YOU MAY WISH YOU HAVE A VOLCKER STYLE RECESSION A SET OF WHAT YOU'RE GOING TO GET. THE TROUBLES THAT COME TO US COULD BE WORSE THAN WHAT VOLCKER WAS DEALING WITH AND HARDER TO FIX. >> Reporter: LIKE WHAT? >> THINK OF ALL THE LATIN AMERAN COUNTRIES THAT PRINT TOO MUCH MONEY. THEY GET STRONGMEN AND SO FORTH. THAT IS WHAT PLATO SAID HAPPENED IN THE EARLY GREEK CITY STATE DEMOCRACIES. ONE PERSON, ONE VOTE, AND THEN YOU HAVE DEMAGOGUES AND THE DEMAGOGUES LATHER UP THE POPULATION AND PRETTY SOON YOU DON'T HAVE A DEMOCRACY ANYMORE. I DON'T THINK THAT WAS A CRAZY IDEA. I THINK HE ACCURATELY DESCRIBE WHAT HAPPENED IN GREECE WAY BACK THEN AND IT IS HAPPENING AGAIN AND AGAIN AND AGAIN IN LATIN AMERICA. WE DON'T WANT TO GO THERE. AT LEAST I DON'T. >> ME, NEITHER. CHARLIE, I'M GOING TO ASK A COUPLE MORE OF THESE INFLATION QUESTIONS BECAUSE IT IS IN A SIMILAR VEIN, BUT THEY ARE NUANCED AND THERE IS SLIGHTLY DIFFERENT ASPECTS. THIS IS SOMETHING FROM SIMON JACOBS THAT SAYS CONVENTIONAL ECONOMIC THEORY ARGUES THAT EXCESSIVE MONETARY STIMULUS OF THE PAST TWO YEARS HAS TRIGGERED THE HIGHEST INFLATION OF 40 YEARS. DO YOU BROADLY AGREE WITH THIS THESIS AND DO THINK THERE WILL BE A HIGH ECONOMIC IS TO PAY AS A FED ATTEMPTS TO BRING INFLATION BACK UNDER CONTROL? I GUESS THE REASONS FOR IT. >> THE FIRST PART, I AGREE WITH IT. WE HAVE DONE SOMETHING PRETTY EXTREME. WE DO NOT KNOW HOW BAD THE TROUBLES WILL BE AND WHETHER WE WILL BE LIKE JAPAN OR SOMETHING A LOT WORSE. WHAT MAKES LIFE INTERESTING IS THAT WE DO NOT KNOW HOW IT IS GOING TO WORK OUT. I THINK WE DO KNOW THAT WE ARE FLIRTING WITH SERIOUS TROUBLE. I THINK WE ALSO KNOW THAT SOME OF OUR EARLIER FEARS WERE OVERBLOWN. JAPAN IS STILL EXISTING AS A CIVILIZED NATION. IN SPITE OF UNBELIEVABLE EXCESS BY ALL FORMER STANDARDS IN TERMS OF MONEY PRINTING. THINK HOW SEDUCTIVE IT IS, YOU HAVE A BUNCH OF INTEREST- BEARING DEBTS AND YOU PAY THEM OFF WITH CHECKING ACCOUNTS, WHICH YOU ARE NO LONGER PAYING INTEREST. THE THING ABOUT SEDUCTIVE THAT IS FOR A BUNCH OF LEGISLATORS. YOU GET RID OF THE INTEREST PAYMENTS AND THE MONEY SUPP GOES UP. IT SEEMS LIKE HEAVEN. AND, OF COURSE, WHEN THINGS GET THAT SEDUCTIVE, THEY'RE LIKELY TO BECOME OVERUSED. >> Reporter: STEPHEN FROM ATLANTA WRITES IN AND HAD SIMILAR CONCERNS ABOUT INFLATION BUT HE TAKES IT A STEP FURTHER. HE SAYS, HOW WILL THIS PLAY OUT AND WHAT IS THE BEST ADVICE YOU HAVE FOR INDIVIDUAL INVESTORS TO OPTIMALLY DEAL WITH THE NEGATIVE IMPACT OF INFLATION OTHER THAN OWNING QUITY EQUITIES? >> IT MAY BE THAT YOU HAVE TO CHOOSE THE LEAST BAD OF A BUNCH OF OPTION THAT FREQUENTLY HAPPENS IN HUMAN DECISION-MAKING. AND THE FAMILY HAS BERKSHIRE STOCK, A LITTLE BIT OF DAILY JOURNAL STOCK AND A BUNCH OF APARTMENT HOUSES. DO I THINK THAT IS PERFECT? NO. I THINK IT IS OKAY? YES. I THINK THE GREAT LESSON FROM THAT IS THAT YOU DO NOT NEED ALL OF THIS DIVERSIFICATION. YOU ARE LUCKY IF YOU HAVE FOUR GOOD ASSETS. I THINK THE FINANCE PROFESSORS AND THEY SELL AWAY THE IDEA THAT PERFECT DIVERSIFICATION IS, IF YOU'RE TRYING TO DO BETTER THAN AVERAGE, YOU ARE LUCKY IF YOU HAVE FOUR THINGS TO BUY. AND, TO ASK FOR 20 IS REALLY ASKING FOR EGG IN YOUR BEER. VERY FEW PEOPLE HAVE ENOUGH BRAINS TO GET 20 GOOD INSTMENTS. >> Reporter: THIS QUESTION COMES IN FROM SINGAPORE. HE SAYS, CAN YOU ASK CHARLIE MUNGER WHICH PART OF BERKSHIRE HATHAWAY BUT THE ACTIVISION STEAK AND IF BERKSHIRE HAD ANY INKLING OF THE MICROSOFT BID? >> I HAVE NO COMMENT ABOUT THAT OTHER THAN I REALLY LIKE BOBBY. HE'S ONE OF THE SMARTEST BUSINESS EXECUTIVES I KNOW. I DO THINK GAMING IS HERE TO STAY. BUT AGAIN, I AM AN OLD MAN. I DON'T LIKE A BUNCH OF ADDICT AND YOUNG MALES SPENDING 40 HOURS A WEEK PLAYING GAMES ON THE TV. IT DOES NOT STRIKE ME AS A GOOD RESULT FOR CIVILIZATION. I DON'T LIKE ANYTHING THAT IS SO ADDICTIVE THAT YOU GIVE UP ALMOST EVERYTHING ELSE TO DO IT. >> Reporter: YOU ASK HIS VIEWS OF THE METAVERSE? WAS THIS SOMETHING THAT CHARLIE MUNGER HAD ANY IMPACT ON? OR IS IT SOMETHING SIMILAR TO BITCOIN AND CRYPTOCURRENCY HYPE? >> I DON'T. A LOT OF THE GAMES ARE HARMLESS PLEASURE, IT IS JUST A DIFFERENT WAY OF DOING APPARENT I LIKE A BARTER THAT IS CONSTRUCTIVE BUT I DON'T LIKE IT WHEN PEOPLE SPEND 40 HOURS A WEEK BEING ARTIFICIAL MACHINE GUNNER. >> THAT IS UNDERSTANDABLE. HERE IS A QUESTION ABOUT ANTITRUST. RECENT APPOINTEES LENA CON AND JONATHAN CANTOR AS ASSISTANT ATTORNEY GENERAL OF THE ANTITRUST DIVISION HEAVY SPLASH TO FOLLOW AN AGGRESSIVE APPROACH. DO YOU BELIEVE THERE IS A NEED FOR ANTITRUST LEGISLATION AND/OR MORE STRINGENT SCRUTINY WITH RESPECT TO THE LARGEST TECHNOLOGY COMPANIES? >> WELL, I THINK WHAT IS HAPPENED IS SO IMPORTANT AND SO TIED UP WITH NATIONAL STRENGTHS. I AM NOT TRYING TO WEAKEN THE COMPANIES OF THE UNITED STATES. I LIKE THE FACT THAT WE HAVE STRONG NATIONAL CHAMPIONS THAT ARE BIG STRONG COMPANIES AND I THINK OTHER NATIONS ARE PROUD OF THEIR TEXTRON COMPANIES AS WELL. SO I DON'T THINK IT IS BAD. I DON'T WANT THE WHOLE INTERNET TO BE DOMINATED BY FOREIGN COMPANIES. I WANT BIG, STRONG AMERICAN COMPANIES THAT STAND WELLIN THE WORLD. I AM NOT AS WORRIED ABOUT ANTITRUST ASPECT OF THE INTERNET . >> ARE YOU WORRIED ABOUT THE ASPECT OF ANTITRUST BREAKING IT DOWN THOUGH? >> WELL, THERE IS NO QUESTION THEY'RE GOING TO GET MORE ATTACKS FROM THE PRESIDENT AND THE PRESENT ADMINISTRATORS THAN THEY DID THE PREVIOUS ONES. I DON'T THINK IT WILL HAVE THAT MUCH PARTICLE CONSEQUENCE. >> THERE IS ANOTHEQUESTION THAT CAME IN, I WILL ASK YOU BECAUSE I LIKE IT. HE SAID, CURRENTLY CONGRESS IS CONSIDERING LEGISLATION TO ADDRESS THE TRADING AND OWNERSHIP OF INDIVIDUAL STOCKS BY MEMBERS OF CONGRESS. WHAT ARE YOUR VIEWS ON THE SUBJECT? >> I DON'T THINK WE HAVE BIG, MORAL LAPSES IN CONGRESS. MAY BE A FAIRLY SCATTERED AMOUNT OF MINOR MISCREANTS SEE. I'M NOT WORRIED ABOUT THEM. >> JOHN WROTE INC. SEVERAL QUESTIONS ALL IN ONE EMAIL THAT HE IS ASKING ABOUT U.S. ENERGY INPENDCE I WILL GIVE YOU SOME OF THE QUESTIONS I WANT ASK ALL OF THEM. IN THE PAST HAVE STATED THAT THE USA SHOULD KEEP ALL OIL AND GAS PRODUCTION DOMESTIC AND LET THE REST OF THE WORLD DEPLETE THE SUPPLIES OF OTHER EXPORTERS. DO YOU STILL BELIEVE THAT POSITION HAS MERIT? WHAT IS YOUR OPINION OF OIL AND GAS IN THE USA GIVEN THAT THE PIPELINE IS CANCELED? IS THIS JUST A CONCESSION TO THE GREENHOUSE OR THE GRIEVING PROCESS SINCE. DO YOU BELIEVE THERE WILL BE ENOUGH RENEWABLE ELECTRICAL GENERATION CAPACITY TO OFFSET THE USE OF CALL TO GENERATE ELECTRICITY? >> THAT IS T TO TALK ABOUT. THERE'S NO QUESTION ABOUT THE FACT WE HAVE A LOT OF RENEWABLE ENERGY THAT WE CAN GET FROM SOLAR AND WIND. IT HAS GOTTEN PRETTY EFFICIENT AND COMPETITIVE. I AM IN FAVOR OF CONSERVING THE HYDROCARBONS AND USING THEM UP AS FAST AS POSSIBLE. I AM IN FAVOR OF ALL OF THIS NEW GENERATING CAPACITY NOW THAT IT HAS GOTTEN SO EFFICIENT FROM SOLAR AND WIND. AND, IF THERE WERE NO GLOBAL WARMING PROBLEM, WOULD BE IN FAVOR OF EXACTLY WHAT THE GOVERNMENT IS NOW DOING WHICH IS ENCOURAGING A OF A LOT MORE SOLAR AND WIND. I THINK IT WOULD BE SMART TO CONSERVE THE PETROLEUM. THE PETROLEUM HAS ENORMOUS CHEMICAL USES AND FERTILIZERS AND CHEMISTRY AND SO ON AND SO ON AND IT IS PRECIOUS STUFF. I DON'T MIND HAVING A GOOD PART OF IT AND THIS REMAINS IN THE GROUND, IT IS A GOOD PLACE TO STORE IT. I REGARD THE PETROLEUM OF THE UNITED STATES ABOUT THE WAY I REGARD THE BLACK TOPSOIL OF IOWA. THE NATIONAL TREASURE. JUST AS I HAVE NOT IN FAVOR OF SENDING ALL OF THE TOPSAIL AFRICA DOWN AND DUMPING IT IN THE OCEAN, I'M NOT IN FAVOR OF USING UP ALL OF THE PETROLEUM AS FAST AS POSSIBLE. I LOVE THE IDEA OF CONSERVING THE NATURAL RESOURCES. THEY ARE ALL GOING TO BE USED EVENTUALLY. I AM IN NO HURRY TO USE THEM UP . THAT IS A VERY UNUSUAL ATTITUDE THAT IT IS MINE. I AM VERY ENCOURAGED ABOUT HOW MUCH ENERGY WE CAN GET THAT IS RENEWABLE FROM SOLAR AND WIND WITH MODERN TECHLOGY WE HAVE A HUGE POTENTIAL OF GETTING RENEWABLE ENERGY THAT WAY. I THINK NOW THAT IT IS SO EFFICIENT WE OUGHT TO GO AHEAD AND DO IT. GLOBAL WARMING, I WILL BE VERY SURPRISED IF IT WILL BE AS BAD AS PEOPLE SAY IT IS GOING TO BE. >> WHY? >> THE TEMPERATURE OF THE EARTH WENT UP 1 DEGREE CENTIGRADE AND ABOUT 200 YEARS. IT JUST, IT IS A HELL LOT OF -- COAL AND OIL THAT WAS BURNED. I AM SKEPTICAL ABOUT WHETHER IT IS AS BAD AS THESE CALAMITY HOURS ARE SAYING. >> I HAVE ANOTHER QUESTION THAT CAME IN FROM TOM SEYMOUR. THIS ONE IS BIRCHER ANNOUNCED PLANS FOR IN PERSON ANNUAL MEETING. WHAT ARE YOURS AND WARRANTS THOUGHTS ON COVID AND TREND ZERO HERE IN THE UNITED STATES AND AROUND THE WORLD AND IN TERMS OF THE BIRCHER MEETING WILL ATTENDEES BE REQUIRED TO SHOW PROOF OF VACCINATION TO ENTER THE ARENA? >> I AM NOT FAMILIAR, THAT IS, I'M NOT SURE THAT IS ALL BEEN DECIDED. WE ARE GOING TO MAKE IT A REAL MEETING IF WE CAN. THAT IS THE CURRENT PLAN. >> WHAT ABOUT YOUR THOUGHTS ON -- >> MY PERSONAL GUESS IS IT IS GOING TO HAPPEN. >> THE OTHER PART OF THE QUESTION WAS YOUR THOUGHTS ON COVID AND OMICRON HERE IN THE UNITED STATES AND WHERE YOU THINK THINGS STAND AND WHAT WE HAVE BEEN THROUGH. >> IF WE GET LUCKY IT WILL FADE AWAY TO A MINOR PROBLEM. HOW MUCH, WE KILL 30,000 PEOPLE A YEAR WITH FLU IN THE UNITED STATES. SUPPOSEDLY WE ARE 60,000 WITH OMICRON . I THINK WE GET USED TO IT. >> IN RELATION TO COVID, THIS QUESTION COMES IN FROM WESTWOOD , MASSACHUSETTS. THE PANDEMIC HAS MADE THE DIFFERENCE BETWEEN BIG BUSINESS A SMALL BUSINESS MORE CLEAR THAN EVER. IT MADE IT HARDER THAN EVER FOR SMALL BUSINESSES TO THRIVE. ALL BUSINESSES WERE ORDERED CLOSED AND SOME STATES BUT YET HOME DEPOT AND STOP & SHOP WERE ALLOWED TO OPERATE. IS THIS A NEVER ENDING SPIRAL UNTIL THERE IS NOTHING BUT BIG BUSINESS LEFT? >> I THINK WE WILL HAVE SMALL BUSINESS AS FAR AHEAD AS YOU CAN SEE. EVERY SHOPPING CENTER IS FULL OF SMALL BUSINESS. NOW THEY ARE NOT AS FLOURISHING AS THEY WERE A WHILE AGO BUT WE ARE NOT GOING TO GET RID OF SMALL BUSINESS IN THE UNITED STATES. IN A SENSE, WE NEED THE BIG BUSINESS. IT MAKES SENSE TO HAVE SOMETHING LIKE APPLE AND GOOGLE, AS BIG AS THEY ARE AND SERVING AS WELLAS THEY ARE DOING. JUST AS I DID IN MY DAY, AT&T RAN THE WHOLE NETWORK TELEVISION, I DON'T MIND APPLE AND GOOGLE BE BIG COMPANIES. I AM NOT WORRIED ABOUT HAVING SOME BIG COMPANIES AND A LOT OF SMALL ONES, I THINK THAT IS OUR SYSTEM. >> YOU THINK IT IS IN AN EVEN PLAYING FIELD RIGHT NOW? IT IS MORE THAN 15% OFF, IT HAS HAD A PLEA ROUGH GO IN THE LAST FEW MONTHS. >> IF YOU START TO THINK ABOUT IT, MY WAY IN LIFE IS NOT PREDICTING LITTLE SHORT-TERM DIFFERENCES BETWEEN THE RUSSELL INDEXIN THE STANDARD INDEX. I DON'T HAVE AN OPINION ABOUT WHICH INDEX IS GOOD. I AM ALWAYS LOOKING FOR SOMETHING THAT IS GOOD ENOUGH TO PUT MUNGER MONEY IN OR DAILY JOURNAL MONEY IN. I FIGURE THAT I WANT TO SWIM AS WELL AS I CAN AGAINST THE TIDES, I'M NOT TRYING TO PREDICT THE TIDES. >> GO AHEAD. >> WELL, IF YOU'RE GOING TO INVEST IN STOCKS FOR THE LONG TERM, REAL ESTATE, COURSE THERE ARE GOING TO BE PERIODS WHEN THERE IS A LOT OF AGONY AND OTHERS WHEN THERE IS A BOOM. I HAD TO LEARN TO LIVE THROUGH THEM. TREAT THOSE TWO IMPOSTERS JUST THE SAME. YOU HAVE TO DEAL WITH DAYLIGHT AND NIGHT, DOES THAT BOTHER YOU VERY MUCH? NO. SOMETIMES IT IS NIGHT AND SOMETIMES IT IS DAYLIGHT. SOMETIMES IT IS A BOOM AN SOMETIMES IT IS A BUST. I BELIEVE IN DOING AS WELL AS YOU CAN AND KEEP GOING AS LONG AS THEY LET YOU. >> TORONTO, CANADA WRITES, DID A GREAT FRANCHISES OF OUR DAY, MICROSOFT, APPLE AND ALPHABET, HAVE THE SAME LONG-TERM DUBILI TH COCA-COLA HAD 30/40 YEARS AGO. >> IT IS A LOT EASIER TO PREDICT WHO FLOURISHED IN THE PAST BECAUSE WE KNOW WHAT HAPPENED IN THE PAST. NOW WHAT WILL HAPPEN IN THE FUTURE, COURSE THAT IS HARDER. IT IS VERY HARD FOR ME TO IMAGINE, I WOULD EXPECT MICROSOFT AND APPLE AND ALPHABET TO BE STRONG 50 YEARS FROM NOW, REALLY STRONG, STILL STRONG. BUT, IF YOU HAD ASKED ME WHEN I WAS YOUNG WHAT WOULD HAPPEN TO THE DEPARTMENT STORES THAT WENT BROKE IN THE NEWSPAPERS, I WOULD NOT HAVE PREDICTED THAT EITHER. SO, I THINK IT IS HARD TO PREDICT HOW YOUR WORLD IS GOING TO CHANGE WHEN YOU TALK ABOUT 70, 80, 90 YEARS. JUST THINK, IMAGINE, THE SHAREHOLDERS FROM KODAK WERE WIPED OUT, THE SHAREHOLDERS FROM GENERAL MOTORS WERE WIPED OUT, WHO WOULD'VE THOUGHT OF THAT. IT IS HARD TO PREDICT FOR SURE. IN ADVANCE. THE TELEPHONE COMPANY IS STILL DIFFERENT WAY. SO, THE OTHERS REMAIN IN SOME VANISH. >> JEFFREY MALLOY WRITES, MUCH MEDIA ATTENTION HAS BEEN FOCUSED ON THE LARGE NUMBERS OF AMERICANS WHO HAVE RESIGNED FROM THEIR JOBS OVER THE LAST YEAR. WHAT DO YOU MAKE OF THIS TREND AND WHAT ADVICE WOULD YOU GIVE TO CEOs SEEKING TO RETAIN THEIR PLOYS? >> THIS IS A VERY INTERESTING THING THAT THE PANDEMIC HAS GIVEN US. AN AWFUL LOT OF PEOPLE HAVE GOTTEN USED TO NOT GOING TO THE OFFICE FIVE DAYS A WEEK. I THINK A LOT OF THOSE PEOPLE ARE NEVER GOING BACK TO FIVE DAYS A WEEK. IT IS AMAZING THE PERCENTAGE OF PEOPLE IN COMPUTER SCIENCE THAT DON'T WANT TO BE IN THE OFFICE FOR A NORMAL LIFE. THEY WANT TO DO A LOT OF IT FROM LOCATIONS THAT ARE MORE CONVENIENT TO THEM. I THINA LOT OF THAT WILL REMAIN FOREVER. I DON'T THINK WE'RE GOING BACK. I DON'T THINK THE AVERAGE CORPORATION WILL FLY ITS DIRECTORS AROUND SO THEY CAN SIT AT THE SAME TABLE FOR EVERY MEETING OF THE YEAR. MAYBE THEY WILL HAVE TWO MEETGS WRE THE DIRECTORS ARE TOGETHER. BERKSHIRES DIRECTORS HAVE DONE THAT FOREVER. THE BERKSHIRES DIRECTORS HAVE MET FACE TO FACE TWICE A YEAR FOREVER AND DON'T HAVE ANYTHING ELSE ON THE TELEPHONE OR WITH CONSENT MINUTES. IT HAS WORKED FINE FOR Xe. I DON'T THINK WE NEED ALL OF THESE MEETINGS AND AIRPLANE FLIGHTS. I THINK WHAT IS HAPPENING IS CONSTRUCTIVE, YOU WILL MAKE LIFE SIMPLER AND MORE EFFICIENT. I DON'T THINK WE'RE GOING BACK FOR SOME KIND OF WORK. ON THE OTHER HAND, THEY MADE THE WELFARE SO LIBERAL HELICOPTER DURING THIS MONEY OUT, IT WAS JUST MAN YOUR RESTAURANT SO YOU CAN SERVE YOUR PATRONS. I INK WE PROBABLY EVER DID THAT. I THINK SUMMERS IS PROBABLY RIGHT THAT WE OVERSHOT SOME OF THE STIMULUS AND WOULD HAVE BEEN SMARTER TO DO A LITTLE LESS. IF YOU STOP TO THINK ABOUT IT, WHAT MAKES CAPITALISM WORK IS THE FACT, IF YOU ARE AN ABLE- BODIED YOUNG PERSON, YOU SUFFER A FAIR AMOUNT OF AGONY IF YOU REFUSE TO WORK. IT IS BECAUSE OF THE AGONY THAT THIS WHOLE ECONOMIC SYSTEM WORKS. THE ONLY EFFECT OF ECONOMIES WE HAVE HAD THAT BROUGHT US MODERNITY AND THE PROSPERITY WE NOW HAVE IMPOSED A LOT OF HARDSHIP ON YOUNG PEOPLE WHO DID NOT WANT TO WORK. YOU TAKE AWAY ALL THE HARDSHIP AND SO YOU CAN STAY HOME AND GET MORE THAN YOU GET IF YOU COME TO WORK, IT IS QUITE DISRUPTIVE TO ECONOMIC SYSTEM LIKE OURS. THE NEXT TIME WE DO THIS, DON'T THINK WE SHOULD BE QUITE SO LIBERAL. >> WHAT ABOUT THE LAST PART OF THE QUESTIONWHERHE ASKED WHAT ADVICE WOULD YOU GIVE TO CEOs WHO ARE SEEKING TO RETAIN THEIR EMPLOYEES? >> WELL, EVERY CEO I KNOW IS ADAPTING SOMEWHAT TO SOME PEOPLE WHO WORK DIFFERENTLY THEN THEY DID THE PAST. I THINK SOME OF THESE CHANGES ARE HERE FOREVER. IF YOUR JOB IN LIFE IS TO GET ON THE TELEPHONE AND TALK TO OTHER ENGINEERS ALL OVER THE WORLD WHERE YOU SOLVE PROBLEMS, WHY DO YOU HAVE TO DO IT FROM AN OFFICE? AND THE COMMUTES GET HARDER AND HARDER WITH MORE TRAFFIC AND IT IS HARDER TO HANDLE MORE TRAFFIC AND MORE PEOPLE. IT MAY BE A GOOD THING THAT MORE PEOPLE WILL COMMUTE LESS. >> DENNY POLAND WRITES WITH A QUESTION ON COMPOSITION PLANS. THERE ARE MANY EXAMPLES OF PUBLIC COMPANY EXECUTIVE COMPENSATION PROGRAMS THAT PRODUCE MISALIGNED OUTCOMES FOR EXECUTIVES AND FOR SHAREHOLDERS. WHAT ARE SOME OF THE MOST IMPORTANT COMPENSATION RELATED CHANGES INVESTORS AND BOARDS OF DIRECTORS COULD MAKE IT TO CREATE A BETTER ALIGNMENT OF INTEREST BETWEEN THE SHAREHOLDERS AND THE MANAGEMENT? >> TALKING ABOUT WHAT THE ECONOMISTS CALL AGENCY PROBLEMS. IF YOU'RE MANAGING YOUR OWN AFFAIRS, YOU WILL BE PRETTY EFFICIENT OF TAKING CARE OF YOUR OWN PROPERTY. IF YOU'RE WORKING FOR SOMEONE ELSE, THE TRUTH OF THE MATTER IS THAT YOU CARE MORE ABOUT YOURSELF AND YOUR FUTURE, YOUR FAMILY, THEN YOU CARE ABOUT THE TELEPHONE COMPANY YOU ARE WORKING FOR. SO, CAPITALISM IS EFFICIENT WHEN THE PEOPLE ARE MAKING THE DECISIONS ARE DOING IT ABOUT THEIR OWN PROPERTY INSTEAD OF JUST TIRED EMPLOYEES OF SOME STATE OWNED ENTERPRISE. THAT IS JUST THE WAY IT IS. IT IS JUST IMPORTANT IT IS TO HAVE A MAJORITY OF THE PROPERTY OF A CIVILIZATION OWNED BY SOMEBODY WHO IS IN CHARGE OF CARING FOR IT. THAT WAY IT IS PROPERLY TAKEN CARE OF. WHEN THE CHINESE WENT AWAY FROM COLLECTIVIST AGRICULTURE AND LET EACH PRESENT HAVE HIS OWN PLOT OF LAND AND HE GOT TO KEEP THE CROP AFTER IS COST. THE GRAIN PRODUCTION WENT UP 60% THE FIT YEAR. NOW, WHO IN THE HELL WOULD WANT COLLECTIVE AGRICULTURE WHEN IT WAS THAT INEFFICIENT COMPARED TO CAPITALIST AGRICULTURE? THEY DECIDED, THE HELL WITH THIS COMMUNISM WHEN IT COMES TO THEY WOULD RATHER HAVE IT 60% OF GRAIN PRODUCTION. THEY CHANGED THE WHOLE SYSTEM. I GREATLY ADMIRE WHAT THEY DID. I THINK HE WILL GO DOWN AS ONE OF THE GREATEST LEADERS THAT ANY NATION EVER HAD. HE HAD TO GIVE UP HIS OWN IDEOLOGY TO DO SOMETHING BETTER. YOU DON'T SEE THE CATHOLIC CARDINALS SUDDENLY DECIDE THERE'S NO AFTERLIFE. THAT IS WHAT HE DID, HE GAVE UP HIS COMMUNISTS IDEOLOGY IN ORDER TO MAKE THE ECONOMY WORK BETTER. BEING A RULER, HE COULD ARRANGE IT. HE BROUGHT THAT WHOLE NATION OUT OF POVERTY AND INTO PROSPERITY OVER THE COSE OF 30 YEARS AFTER HE MADE THE DECISION. THAT IS A VERY ADMIRABLE THING TO HAVE DONE. IT IS KIND OF A MIRACLE. IT IS JUST AMAZING HOW WELL CAPITALISM HAS SERVED THE COMMUNIST CHINESE. HE SAID, ONE PARTY GOVERNMENT. WITH MOST OF THE PROPERTY IN PRIVE HAS AND A FAIR AMOUNT OF FREE ENTERPRISE. THAT IS WHAT HE MEANT WHEN HE SAID COMMUNISM WITH CHINESE CHARACTERISTIC. I DON'T CARE WHAT HE CALLS IT, HE WAS RIGHT. IT WAS A MARVELOUS THING TO HAVE DONE FOR CHINA. IT WORKED WONDERFULLY WE. OF COURSE WE SHOULD NOT BE TRYING TO TRANSFER MORE AND MORE FUNDS INTO THE GOVERNMENT. WHAT THEY GAVE UP ON, WE DON'T WANT TO GO THAT WAY, I DON'T THINK. >> A SHAREHOLDER RIGHTS IN, HOW DO YOVALUE MR. GENSLER AND THE ROLE IN PROTECTING THE INTEGRITY OF THE AMERICAN FINANCIAL SYSTEM? >> WELL, IT IS HARD TO FIX. WHAT HAPPENS IS, PEOPLE RATIONALIZE THEIR OWN WAY OF MAKING A LIVING. THERE SOME COMPROMISE IN MAKING A LIVING. PARTICULARLY SO IN MANAGEMENT AND SO FORTH. OF COURSE THE PEOPLE MAKING THE DECISIONS CARE MORE ABOUT THEIR OWN FAMILIES THAN THEY DO ABOUT THE PEOPLE'S MONEY THEY'RE MANAGING. THAT IS JUST THE WAY HUMAN BEINGS ARE CONSTRUCTED. THAT MEANS THAT WHEN YOU HIRE SOMEBODY ELSE TO MANAGE YOUR MONEY YOU TAKE CARE OF YOUR OLD AGE, IT IS VERYHA TO GET THE JOB DONE RIGHT. IT IS VERY DIFFICULT. NOWADAYS, EVERY DIRECTOR IN A BIG COMPANY GETS $300,000 A YEAR. WE HAVE ARRANGED ALL OF THIS WONDERFUL INDEPENDENCE. A MAN WHO NEEDS $3000 EXTRA A YEAR AS A DIRECTOR IS NOT AN INDEPENDENT. THE ONE THING YOU CAN GUARANTEE IS HE WILL TRY TO STAY A DIRECTOR. I DON'T THINK THAT IS AN IDEAL SYSTEM. I DON'T THINK THERE'S ANYTHING EASY TO DO ABOUT IT. I JUST THINK IT IS HARD TO GET THINGS MANAGED AS WELL AS THEY SHOULD BE. I WAS IN THE EARLY DAYS OF MY LIFE, I WAS A LITTLE BIT ON THE FRINGES OF MOTION PICTURE INDUSTRY. I WOULD SAY PRACTICALLY EVERYONE TOOK ADVANTAGE OF THE SHAREHOLDERS. THAT WAS JUST A CULTURE. THAT IS DEEPLY IN HUMAN NATURE THAT PEOPLE WILL BEHAVE THAT WA OF COURSE IT MAKES IT HARD TO RUN A PROPER CIVILIZATION. IF YOU LIKE AT BERKSHIRE IN THE DAILY JOURNAL, LOOK AT THE DAILY JOURNAL CORPORATION. CHARLIE MUNGER, AGE 98. IN NORMA'S DELEGATION. AS I SAY , MANAGING A SUBSIDIARY IS JUST SHORT OF ABDICATION. LOOK AT HOW WELL IT HAS WORKED. OUOF AL THE UNITED STATES, MOST OF THEM ARE GOING OUT OF BUSINESS. THE WALL STREET JOURNAL WILL SURVIVE, THE NEW YORK TIMES WILL SURVIVE THE DIGITAL NEWSPAPER OF THOMSON REUTERS WILL SURVIVE. ST OF THE OTHER NEWSPAPER ERRORS ARE GOING TO GO OUT OF BUSINESS. AND YET, IN THAT CLIMATE, THIS LITTLE DAILY JOURNAL CORPORATION IS ONE BUSINESS IS DYING AND WE HAVE ALL OF THIS LIQUID WEALTH AND SECURITIES AND WE HAVE ANOTHER BUSINESS THAT WE ARE TRYING TO MAKE INTO A RESPECTABLE BIG BUSINESS. IT IS QUITE AN ACHIEVEMENT. IF THERE WERE 500 NEWSPAPER COMPANIES AND MAYBE TW THREE THAT HAD A RESULT LIKE THAT. AND LOOK AT ALL THE PEOPLE THAT HAVE DONE IT. NEITHER GARRETT OR I TOOK ONE PENNY OUT OF THE DAILY JOURNAL SINCE WE WERECARE. NO EXPENSES, NO NOTHING. JERRY HAS BEEN A MIRACLE WORKER, WEARING FIVE OR SIX DIFFERENT HATS AT ONCE AND DOING EVERYTHING. VERY LITTLE COST. BERKSHIRE HAS LIKE 30 PEOPLE IN HEADQUARTERS LOOK AT HOW WELL BERKSHIRE HAS DONE . IT IS HARD TO RUN A BUREAUCRACY THAT DOESN'T GET TERRIBLE SLOWNESS AND TERRIBLE WASTE AND TERRIBLE -- I DON'T KNOW HOW TO -- IT IS A VERY SERIOUS PROBLEM. JUST IMAGINE, THINK OF THE BIG BUREAUCRACIES THAT HAVE DIED. U.S. STILL, EASTMAN KODAK, SEARS ROEBUCK AND YET SOME THINGS HAVE COME THROUGH AND SURVIVED AND IN SOME CASES THE WHOLE BUSINESS HAD TO DIE AND THEY TAKE THE CAPITAL OUT TO SURVIVE. THAT WHAT BERKSHIRE DID. LOOK AT THE THREE COMPANIES THAT BERKSHIRE HAD. THEY ALL WENT OUT OF BUSINESS. AND YET WE RUNG ENOUGH MONEY OUT BEFORE THEY DIED THAT BERKSHIRE NOW HAS MORE AUDITED NET WORTH ON ITS BALANCE SHEE THAN ANY OTHER CORPORATION IN THE UNITED STATES. NOW, THAT IS WEIRD. AND WE DON'T HAVE THIS BUREAUCRACY THAT OTHER PLACES HAVE. THERE ISN'T ANYBODY AT HEADQUARTERS TO BE BUREAUCRATIC. JUST A LITTLE HANDFUL OF PEOPLE THAT ARE RUNNING AN EMPIRE. I DON'T THINK THERE'S ANY CHANCE FOR THE REST OF THE WORLD WILL BE LIKE BERKSHIRE. I THINK WE WERE KIND OF A FLUKE THAT LASTED FOR A WHILE. AND THE DAILY JOURNAL,WHAT ARE THE CHANCES THAT A LITTLE NEWSPAPER IN LOST ANGELES WOULD BE US PROSPEROUS AS IT IS AFTER ALL OF HIS TROUBLE WHICH MAKES ALL THE OTHER NEWSPAPERS GO BROKE? BY THE WAY WE'RE GOING TO MISS THESE NEWSPAPERS TERRIBLY. EACH NEWSPAPER, ALL OF THOSE LOCAL MONOPOLIES WAS AN INDEPENDENT BASTION OF POWER. ECONOMIC POSITION WAS SO IMPREGNABLE. THE ETHOS OF THE JOURNAL WAS TRYING TO TELL IT LIKE IT IS. THEY WERE REALLY A BRANCH OF THE GOVERNMENT. THEY CALLED THEM THE FOURTH ESTATE MADE THE FOURTH BRANCH OF THE GOVERNMENT. IT WAS BY ACCIDENT. NOW ABOUT 95% WILL GO AWAY FOREVER. WHAT DO WE GET FOR SUBSTITUTE? A BUNCH OF PEOPLE WHO ATTRACT AN AUDIENCE BECAUSE THEY ARE CRAZY. I HAVE FARITE CRAZIES AND YOU HAVE YOUR FAVORITE CRAZIES AND WE GET TOGETHER AND I'LL BECOME CRAZIER AS WE HIRE PEOPLE TO TELL US WHAT WE WANT TO HEAR. THIS IS NO SUBSTITUTE FOR WALTER CRONKITE AND ALL THOSE GREAT NEWSPAPERS OF YESTERYEAR. WE HAVE SUFFERED A HUGE LOSS HERE. IT IS NOBODY'S FAULT. IT IS THE CREATIVE DISRUPTIVE OF CAPITALISM. IT IS A TERRIBLE THING THAT HAS HAPPENED TO OUR COUNTRY. HAVING THESE NEW JOURNALISTS COME IN AND TELL THE NUTS ON EACH SIDE ONLY WHAT EY WANTED TO HEAR AND SLANT ALL THE FACTS SO THEY HEAR A LOT OF STUFF THAT ISN'T SO, THIS IS NOT GOOD FOR OUR REPUBLIC. THEY DON'T HAVE THE FAINTEST IDEA OF WHAT TO DO ABOUT IT. I SOMETIMES THINK MAYBE WE OULDHAVEA THIRD PARTY. ALMOST EVERY STATE NOW, IT DOESN'T MATTER WHETHER DEMOCRATS OR REPUBLICANS, THEY READ CONFIGURE ALL THE MAPS SO EVERYONE HAS A SAFE DISTRICT. NOW WE HAVE THESE PERMANENT CAREER PEOPLE WITH THEIR SAFE DISTRICTS. THE ONLY FEAR THEY HAVE IS IN THE PRIMARY WHERE THEY FACE SOMEONE WHO MIGHT THROW THEM OUT. SO, EVERY 10 YEARS OR SO, THE NUTTY LEFTISTS IN THE NUTTY RIGHT WINGS, THEY THROW THEM OUT. ONE GROUP OF NUTS THROWS OTHER PEOPLE IN THE MIDDLE AND SO DOES THE OTHER. ONE THING THEY CAN BOTH AGREE ON IS THEY DON'WANT TO BALANCE SENSIBLE PEOPLE IN THE LEGISLATURE. THIS IS A VERY PECULIAR KIND OF GOVERNMENT. THIS WAS NOT ARE IDEAL WHEN WE WENT TO DEMOCRACY BUT IT IS WHAT HAS HAPPENED AND IT IS GETTING WORSE AND WORSE. IT IS QUITE SERIOUS. I HAVE NOT THE FAINTEST IDEA OF WHAT WE ARE GOING TO DO ABOUT IT. >> THAT IS THE QUESTION, HOW DO YOU FIX IT? >> YOU COULD HAVE A THIRD PARTY . WE DID THAT ONCE BEFORE. WE GOT RID OF SLAVERY. MAYBE WE WILL GET A THIRD PARTY. THERE ARE MEMBERS OF CONGRESS WHO HAVE SO LITTLE ORGANIZATION, MAYBE THERE ARE 40 OF THEM. THEY SAY WE ARE THE SAME CORE. THEY ARE HALF REPUBLICAN AND HALF DEMOCRATS. >> THE PROBLESOLVS? >> WE MAY NEED A NEW PARTY. THIS THING IS GETTING SO DYSFUNCTIONAL AND PEOPLE HATE EACH OTHER SO MUCH THAT IT IS NOT CONSTRUCTIVE. HOW WOULD YOU LIKE TO HAVE YOUR LIFE AS FULL AS HATR AS THE AVERAGE STATE LEGISLATURE? THEY REALLY DON'T LIKE OR TRUST EACH OTHER AT ALL. IF YOU TOOK MY GENERATION, AFTER WORLD WAR II, WE SAID POLITICS STOP AT THE WATER'S EDGE. WE TOOK OUR ENEMIES, JAPAN WOULD MARCH OUR SOLDIERS TO DEATH AND HITLER HAD KILLED ALL THE AND ALSO SLAUGHTERED EVERYBODY. WE MA OUR BEST FRIENDS ON EARTH WITH THE GERMANS AND THE JAPANESE. THAT WAS A REAL ACHIEVEMENT. CAN YOU IMAGINE OUR LEGISLATORS AS NOW CONSTITUTED DOING ANYTHING LIKE THAT? >> NO. >> WELL, WITH THAT CHEERFUL THOUGHT, LET'S GO ON TO SOME OTHER QUESTION. >> THE NEXT QUESTION COMES FROM JOHN COX, HE IS IN CAPE COD. MR. MONGER, HOW DO U SEE THE VALUE PROPOSITION OF COLLEGE CERTIFICATES AND DEGREES FOR FUTURE STUDENTS IN THE ROLE OF THE FEDERAL GOVERNMENT IN TERMS OF INCREASING PELL GRANTS, STUDENT LOANS AND STUDENT DEBT FORGIVENESS? >> THAT IS ANOTHER COMPANY KIT IS SUBJECT. OF COURSE, ONE OF THE GLORIES OF MODERN CIVILIZATION IS MODERN EDUCATION. THE AMERICAN UNIVERSITIES HAVE BEEN MARVELOUS IN THEIACHIEVEMENTS. WE OWE A LOT TO ALL OF THE FREE EDUCATION WE HAVE PROVIDED AND WE PROBABLY OUGHT TO DO MORE OF IT. HOWEVER, THE WAY WE ARE CONSTRUCTED, OTHER PEOPLE WILL, WE HAVE HAD A LOT OF FOR-PROFIT EDUCATORS, THOSE TWO TRY TO EDUCATE BUT AREN'T EDUCATED AND THEY SEND BILLS TO THE FEDERAL GOVERNMENT. THERE HAS BEEN A FAIR AMOUNT OF DISREPUTABLE PRIVATE EDUCATION THAT LURES PEOPLE IN WITH THEIR DREAMS AND CHEATS THEM. THAT IS NOT A CREDIBLE PART OF THE PAST. WE WILL END IT WITH MORE PUBLIC EDUCATION. ONCE YOU START A SOCIAL SAFETY NET, EVERYBODY WANTS MORE AND MORE OF IT. THE PEOPLE WHO HAVE THE LOANS, THEY WANT THEIR LOANS FORGIVEN. IT GETS TO BE A BIG BODY OF PEOPLE WANTING MONEY. BENJAMIN FRANKLIN WAS SUSPICIOUS OF THIS. HE SAID WHEN CITIZENS OF THE REPUBLIC LEARN THEY CAN BOTH GIVE THEMSELVES MONEY, THE END IS NEAR. IT MAY NOT BE AS NEAR AS BENJAMIN FRANKLIN THOUGHT BUT IT IS PROBABLY CLOSER TO THE END THAN WE WERE 200 YEARS AGO. IT IS NOT GOOD WHEN EVERYBODY WANTS TO GET THEIR MONEY WITH GOVERNMENT HELP. THEY OUGHT TO NOT NEED ANY HELP. NOT MAXIMIZE THE HELP FROM THE GOVERNMENT. >> WHILE WE'RE ON THE SUBJECT OF COLLEGE, THIS IS A QUESTION THAT CAME IN REGARDS TO THE CONTRIBUTION. WHAT WAS THAT SPECIFICALLY THE PROMPTED THE IDEA FOR WINDOWLESS DORM ROOMS? PLEASE WALK US THROUGH THIS DECISION. THIS IS IN REGARDS TO YOUR DESIGN FOR STUDENT HOUSING WITH NO WINDOWS. >>NOBODY IN HIS RIGHT MIND WOULD PREFER A BLANK WALL IN A BEDROOM THEN ONE WITH A WINDOW IN IT. THE REASON YOU TAKE THE WINDOWS OUT, YOU'RE GETTING SOMETHING ELSE FROM THE DESIGN CONSIDERED AS A WHOLE. WE STOPPED TO THK ABOUT IT. A CRUISE SHIP HAS A BIG SHORTAGE OF BEDROOMS AND WINDOWS BECAUSE TO ME STATE ROOMS ARE EITHER BELOW THE WATERLINE OR ON THE WRONG SIDE. THE VERY NATURE OF THINGS, YOU GET A SHORTAGE. YOU CAN'T CHANGE THE SHAPE OF THE SHIP. YOU HAVE TO DO WITHOUT A LOT OF WINDOWS TO HAVE A SHIP THAT IS FUNCTIONAL. THAT IS REQUIRED BY THE LAWS OF HYDRO TERM MIMICS. WE GET THE ADVANTAGE OF A BIG SHIP BUT IT MAKES A LOT OF STATEMENTS NOT HAVE WINDOWS. IF YOU WANT A BUNCH OF PEOPLE WHO ARE EDUCATING EACH OTHER TO BE CONVENIENTLY CLOSE TO ONE ANOTHER, YOU GET A SHORTAGE OF WINDOWS IN EXCHANGE YOU GET A WHOLE LOT OF PPLE WHO ARE GETTING A LOT OF ADVANTAGE FROM BEING NEAR ONE ANOTHER. YOU HAVE TO DO WITHOUT A REAL WINDOW IN THE BEDROOM. IT DOESN'T MATTER, THE AIR CAN BE AS PER AS YOU WANTED AND THE LIGHT THAT COMES IN THROUGH AN ARTIFICIAL WINDOW CAN MIMIC THE SPECTR OF DAYLIGHT PERFECTLY. IT IS AN EASY TRADE-OFF. YOU PAY $20,000 A WEEK OR SOMETHING ON A BIG CRUISE SHIP TO HAVE A ATE OM WITH AN ARTIFICIAL WINDOW. FOR A LONG TIME ON A DISNEY CRUISE SHIP, THEY HAD TWO DIFFERENT KINDS OF WINDOWS OF STATE RESPITE ONE WITH A WINDOW AND ONE WITHOUT A WINDOW. THEY CHARGED MORE WITH THE ONE, A HIGHER PRICE FOR THE ONE WITH AN ARTIFICIAL WINDOW THEN THEY GOT FOR A REAL ONE. IN OTHER WORDS A PRODUCED IT. THEY MADE AN ADVANTAGE. IT IS A GAME OF TRADE-OFFS. THAT POOR ARCHITECT WHO CRITICIZED ME IS IGNORANT. HE CAN'T HELP HIMSELF. I GUARANTEE THE ONE THING ABOUT HIM, IT IS NOT FIXABLE. OF COURSE YOU HAVE TO MEET AND MAKE TRADE-OFFS IN ARCHITECTURE. >> CHARLIE, ANOTHER QUESTION CAME IN ABOUT COSTCO. YOU RECENTLY TALKED ABOUT BUBBLES AND HIGH EVALUATIONS IN YOUR CONFERENCE TALK. IS COSTCO A PART OF THAT? COSTCO HAS NEVER TREATED AT A HIGHER PRICE TO SALES OR PRICE TO EARNING MULTIPLES. HOW SHOULD NEW INVESTORS THINK ABOUT COSTCO? >> THAT IS A VERY GOOD QUESTION AND I'VE ALWAYS BELIEVED THAT NOTHING WAS WORTH AN INFINITE PRICE. EVEN IN ADMIRABLE PLACE LIKE COSTCO COULD GET TO A PRICE WHERE YOU WOULD SAY TH IS TOO HIGH. I WOULD ARGUE THAT IF I WERE INVESTING MONEY FOR SOME SOVEREIGN WEALTH FUND OR SOME PENSION FUND, I WOULD BUY COSTCO OF THE CURRENT PRICE. I THINK IT IS THAT STRONG IN ENTERPRISE AND THAT ADMIRABLE OF A PLACE. NOW, I'M NOT SAYING, I CAN'T BRING MYSELF WITHMYHABITS TO PAY THESE BIG PRICES. I NEVER EVEN THINK ABOUT SELLING A SHARE OF COSTCO JUST BECAUSE IT IS SELLING AT A HIGH PRICE. IF YOU START TO THINK ABOUT IT, I BOUGHT AT CHRISTMAS TIME A FLANNEL SHIRT, A BUNCH OF FLANNEL SHIRTS AT COSTCO. THEY COST SEVEN DOLLARS MORE LESS. THE SOFT FLANNEL THAT WAS BETTER . I BOUGHT PANTS AND I PAID LIKE SEVEN DOLLARS AND THEY STRETCH AROUNDMY WAIST AND WATER RESISTANT. COSTCO WILL BE AN ABSOLUTE TITAN BECAUSE THEY HAVE PRODUCTS THAT EVERYBODY TRUSTS AND HUGE PURCHASING POWER ON THE LIMITED NUMBER OF OCKI UNITS. I'M NOT WORRIED ABOUT, I'M NOT SAYING I AM BUYING COSTCO AT THIS PRICE BUT I'M CERTAINLY NOT SELLING ANY. I THINK IT IS GOING TO BE A BIG , POWERFUL COMPANY AS FAR AHEAD ASOU CAN SEE. I THINK IT DESERVES HIS SUCCESS. I THINK IT HAS A GOOD CULTURE. IT HAS A GOOD MORAL ETHOS. I WISH EVERYTHING ELSE IN AMERICA IS WORKING AS WELL AS COSTCO DOES. THINK HOW GREAT THAT WOULD BE FOR US ALL. >> MICHAEL WRITES IN, CAN YOU PLEASE UPDATE US CHARLIE ON YOUR VIEW OF 3G CAPITAL AND SERVER-BASED BUDGETING AND HOW IT HAS EVOLVED OVER THE LAST FIVE YEARS. >> OF COURSE, IF YOU HAVE A VERY RICH CORPORATION, HUMAN NATURE WITH WHAT IT IS WILL GET A LOT OF EXCESS COST D LOT OF MEETINGS AND SO FORTH. THERE'S HUGE WASTE IN THAT. A LOT OF THE EXTRA MEETINGS MAKE YOU WORSE OFF, NOT BETTER OFF. YOU'RE NOT ONLY SPENDING A LOT OF EXTRA MONEY. IT IS NOT THAT YOU'RE NOT GETTING WHAT YOU'RE PAYING R, IT IS JUST THAT MANY PLACES, THEY RUN BETTER THAN THEY DID BEFORE AFTER THE EXTRA COST. GETTING RID OF THE PEOPLE AND CHANGING THINGS AROUND, IT NS BETTER, NOT WORSE. THERE IS A LOT OF OVER MANNING IN BIG, SUCCESSFUL PLACES. IT IS HUMAN NATURE THAT PEOPLE RELAX A LITTLE WHEN THEY GET PROSPEROUS AND SO FORTH. I HAD A FRIEND WHO IS ON A CORPORATION WITH HEADQUARTERS IN EUROPE AND THEY WOULD FLY IN FROM LOS ANGELES TO EUROPE ON THE CONCORDE. IT COST THEM $100,000 TO TAKE ONE DIRECT FROM GERMANY AND BACK. THE EXCESS JUST CREEPS IN TO THESE PLACES. OF COURSE IT ISN'T GOOD. ON THE OTHER HAND YOU CAN CUT TOO MUCH. AND THERE SHOULD BE SOME MERCY FOR PEOPLE WHO ARE AROUND A LONG TIME AND HAVE SERVED WELL IN THE PAST. YOU DON'T NECESSARILY WANT 100% PERFECT EFFICIENCY. YOU WOULD WANT NOT A ROLE THAT SOMEONE COULD PHOTOCELL OF REPLACING CUT OUT A LOT OF THE FAT. THE DIRECTORS TABLE IN THE HINES CORPORATION COST $600,000. THE DIRECTORS TABLE IN COSTCO COSTS ABOUT $300. THEY ARE DIFFERENT PLACES, DIFFERENT ETHERS. OF COURSE IF YOU GET FAT LIKE THAT, SOMEBODY LIKE 3G COMES ALONAND SAYS I WANT TO BUY YOU AND TAKE YOU BACK TO NORMAL. OF COURSE IT IS POSSIBLE TO EVER CUT. MY GUEST, THERE IS A T OFAT. THINK OF THE FAT ON THE AVERAGE RICH FAMILY. I DON'T THINK WE WANT UNLIMITED THAT IN THESE PLACES AND ON THE OTHER HAND WE DON'T WANT TOO MUCH -- IT IS COMPLICATED LIKE EVERYTHING ELSE. >> WHAT IMPACT HAS IMPACTING HAD STOCK EVALUATIONS? >> WHAT KIND OF INVESTING? >> PASSIVE INVESTING. >> HUGE, THAT IS ANOTHER THING THAT IS COMING. WE HAVE A NEW BUNCH OF EMPERORS AND OTHER PEOPLE WHO VOTE THE SHARES IN THE INDEX FUNDS. MAYBE WE COULD MAKE THE PEOPLE OF VANGUARD POPE. ALL OF A SUDDEN WE'VE HAD ENMOUS TRANSFER OF VOTING POWER TO THESE PASSIVE INDEX FUNDS THAT IS GOING TO CHANGE THE WORLD. I DON'T KNOW WHAT THE CONSEQUENCES WILL BE BUT I PREDICT THEY WILL NOT BE GOOD. I THINK THE WORLD OF LARRY FINK BUT I'M NOT SURE I WANT HIM TO BE MY EMPEROR. >> HERE IS ANOTHER QUESTION THAT COMES IN, THIS IS A TOUGH ONE. THIS IS FROM CHARLES FRANCIS, PLEASE ASK A CHARLIE WHO WILL FEEL THE GAP OF LENDING THE GLOBAL GOVERNMENT AFTER THE EASING ENDS. WHERE WILL THE ADDITIONAL MONEY NEEDED TO RUN GOVERNMENTS COME FROM? WHO IS A LENDER AND THAT WHAT EXPECTED RATE? LET'S REMEMBER THEY'VE ALSO BEEN BUYING DEBT, WHAT IS THE SOLUTION? >> ARE YOU TALKING ABOUT CHINA OR THE UNITED STATES? >> UNITED STATES. >> THAT IS A G PROBLEM BECAUSE THE GOVERNMENT IS LENDING WITH LAND SALES AND THEY HAVE HAD A BOOM, THEY NEED TO SHRINK THAT SECTOR A LITTLE. IT IS CREATING A PROBLEM. THE UNITED STATES -- WE HAVE A HUGE STRONG ECONOMY AND USUALLY STRONG TECHNICAL SITUATION. THAT IS NOT GOING AWAY. THE KNOWLEDGE AND SO FORTH YOU CANNOT BELIEVE WHAT A MODERN FACTORY LOOKS LIKE WHEN YOU FEEL IT WITH ROBOTS. THAT IS COMING MORE AND MORE. IS COMING TO CHINA AS WELL. THOSE TRENDS ARE INEVITABLE. I DON'T KNOW HOW IT WILL ALL PLAY OUT. IF YOU FIND UNIONIZED JOB IN THE REPLACE YOU WITH A ROBOT, YOU HAVE A REAL PROBLEM. IF YOU HAVE A COMPANY LIKE KODAK THAT MSA PRODUCT. A LOT OF PEOPLE DON'T LIKE THAT SOLUTION, DON'T CARE FOR IT MYSELF. >> THIS QUESTION COMES FROM PETER NORTH FROM MAINE. PRIOTO THE PANDEMIC, IT SEEMED LIKE THE U.S. WAS GETTING USED TO BORROWING AND RUNNING DEFICITS CLOSE TO 20%. THERE ARE ALL KINDS OF REASONS FOR THIS FOR MULTIPLE ADMINISTRATIONS OF EITHER PARTY. NOW WE ARE MARCHING CLOSER TO THE WELL-KNOWN DEMOCRATIC DOUBLE DRIVE DEFICITS HIGHER. THE ESTIMATES WERE CURRENTLY RUNNING ABOUT A 33% TOL DEFICIT IF YOU INCLUDE UNFUNDED FUTURES AND MEDICARE APPLICATIONS. WE ARE HEADED TO HIGHER INTEREST RATES ON TOP OF OUR $30 TRILLION IN DEBT. INTEREST COMPRISES 6% OF SPENDINGAND IT WILL ONLY MAKE THE PROBLEM WORSE. HOW CAN WE GET THE PUBLIC COMPANIES AND POLITICIANS TO RECOGNIZE THE SERIOUSNESS OF THIS PROBLEM AND BEGIN TO TAKE ACTION? >> BECAUSE ALL OF THOSE PROBLEMS ARE REAL AND BECAUSE IT IS SO TEMPTING TO GET RID OF YOUR DEBT BY JUST GIVING A NON- INTEREST CHECKING ACCOUNT WHERE WE USE TO PAY THE SAME INTEREST EVERY MONTH, NOT ONLY DO WE HAVE A SERIOUS PROBLEM BUT THE SOLUTION TO IT THAT IS E EASIEST FOR THE POLITICIANS AND FOR THE FEDERAL RESERVE FOR THAT MATTER IS TO PRINT MORE MONEY AND SELL THE TEMPORARY PROBLEMS. THAT WILL HAVE SOME LONG-TERM DANGERS. WE KNOW WHAT HAPPENED IN GERMANY WHEN THE REPUBLIC JUST KEPT PRINTING MONEY, THE WHOLE THING BLEW UP. THAT WAS A CONTRIBUTOR TO THE RISE OF HITLER. ALL OF THIS STUFF IS DAEROUS AND SERIOUS AND WE DON'T WANT TO HAVE A BUNCH OF POLITICIANS JUST DOING WHATEVER IS EASY ON THE THEORY THAT IT DID NOT HURT US LAST TIME SO WE CAN DOUBLE IT INTO OVERTIME. WE KNOW WHAT HAPPENS ON THAT EVERLASTING DOLING. YOU HAVE A VERY DIFFERENT GOVERNMENT IF YOU KEEP DOING THAT ENOUGH. AND SO, YOU'RE FLIRTING WITH DANGER SOMEWHERE. UNLESS THERE'S SOME DISCIPLINE IN THE PROCESS. I DON'T REGARD JAPAN AS SOME TERRIBLE DANGER. THEY HAVE A HUGE AMOUNT OF THIS AND GOTTEN BY WITH IT. I DON'T THINK WE WILL BE GOOD AT HANDLING OUR PROBLEMS AS JAPAN IS. >> FRANK FROM HOUSTON, IF TEXAS WERE NOT AN ISSUE, WHAT ARE YOUR THOUGHTS ON GOING TO CASH TODAY WAITING FOR BETTER OPPORTUNITIES TO DEPLOY THAT CASH OVER THE NEXT 12 MONTHS? IS THIS A SENSIBLE IDEA IN YOUR MIND? >> IN MY WHOLE ADULT LIFE I'VE NEVER HOARDED CASH WAITING FOR BETTER CONDITIONS. I'VE JUST INVESTED IN THE BEST THINGS I COULD FIND. I DON'T THINK I'M GOING TO CHANGE NOW. THE DAILY JOURNAL HAS USED UP ITS CASH. BERKSHIRE HAS ACCESS TO CASH, QUITE A BIT OF EXCESS CASH . IT IS NOT DOING THAT BECAUSE IT THINKS IS -- WHICH IS COPING WITH IT AS I HAVE DESCRIBED. >> VJ WRITES AND, GIVEN THE VALUATION AND MARKET CORRECTION OF EARLY 2020, WHY IS BERKSHIRE NOT PICKING UP OR ADDING ANY NEW COMPANIES TO HIS PROFILE? IS THE MANAGEMENT GETTING TO CONSERVATIVE CRACKS KUDOS WITH PICKING UP APPLE SHARES A FEW YEARS BACK, THAT IS PAYING OFF FOR SURE. >> THE REASON WE ARE NOT BUYING IS BECAUSE YOU CAN'T BUY ANYTHING IN THE PRICES WE ARE WILLING TO PAY. IT IS JUST THAT SIMP. OTHER PEOPLE ARE BIDDING THE PRICES UP. A LOT OF THE BUYING IS DONE BY PEOPLE WHO PLAN TO OWN THEM. A LOT OF IT IS FEED DRIVEN BUYING. AVID EQUITY BUYS THINGS SO THEY CAN HAVE MORE FEES BY HAVING MORE THINGS UNDER MANAGEMENT. OF COURSE IT IS A LOT EASIER TO BUY SOMETHING WITH SOMEONE ELSE'S MONEY. WE ARE USING OUR OWN MONEY. AT OF IT. BY THE WAY, IT IS NOT A TRAGEDY THAT BERKSHIRE HAS MONEY THEY'RE NOT INVESTING . YOU CAN ARGUE THAT THE DAILY JOURNAL, WHAT A GOOD THING IT WAS WE HAD $30 MILLION EXTRA COMING IN PER MONTH AND THAT WE INVESTED IT SHREWDLY. YOU GIVE US A LOT OF FLEXIBILITY. THAT MONEY HELPS US WITH THESE GOVERNMENTAL BODIES THAT WE ARE SELLING SOFTWARE TO. WE LOOK MORE RESPONSIBLE WITH THE EXTRA WEALTH. AND WE ARE MORE RESPONSIBLE WITH EXTRA WEALTH. THE SHAREHOLDERS WHO ARE WORRIED ABOUT THE FUTURE BECAUSE ELLIS COMPLICATED AND DIFFICULT , I WANT TO SAY TO THEM WHAT MY OLD PROFESSOR SAID TO ME, HE WAS A CHARLIE, TE ME WHAT YOUR PROBLEM IS AND I WILL TRY TO MAKE IT MORE DIFFICULT FOR YOU. AND HE DID ME A FAVOR BY TREATING ME THAT WAY. I'M JUST REPEATING HIS FAVORITE LYING TO YOU. WHEN YOU'RE THINKING THE THOUGHTS, AT LEAST YOU'RE THINKING IN THE RIGHT DIRECTION. YOU'RE WORRIED ABOUT THE RIGHT THINGS. ALL OF YOU PEOPLE WHO ARE WORRIED ABOUT THE INFLATION IN THE FUTURE OF THE REPUBLIC AND SO FORTH. >> MICKEY AND MICHAEL WROTE SEEKING ADVICE FOR A 22-YEAR- OLD, INVESTING GROWTH OR MONTHLY INCOME TO GET A MONTHLY DIVIDENDS. THEY HAVE A 22-YEAR-OLD NEIGHBOR WHO HAS A NEIGHBOR INTERNSHIP AT TESLA. HE TAKES ADVAAGE, THE NEIGHBOR TAKES ADVANTAGE OF HIS TECH SAVVY. HIS INCLINATION IS TO ADVISE THEM TO CONTINUALLY FLOW DRIP INTO MONTHLY INCOME AND DIVIDEND INVESTING AS OPPOSED TO SWINGING R THE FENCES. WHAT WOULD YOU ADVISE, SIR? >> I DON'T THINK A ONE SIZE FIT ALL INVESTMENT. I THINK SOME PEOPLE ARE GIFTED ENOUGH THEY CAN INVEST IN HARD TO VALUE, DIFFICULT THINGS THAT OTHER PEOPLE WOULD BE WISE TO HAVE MORE MODEST AMBITIONS IN TERMS OF WHAT THEY CHOOSE TO DEAL WITH. I THINK YOU HAVE TO FIGURE OUT YOUR LEVEL OF SKILL AND LEVEL OF SKILL YOUR ADSER S. THAT SHOULD ENTER THE EQUATION. TO EVERYONE WHO FINDS THE CURRENT INVESTMENT CLIMATE HARD AND DIFFICULT AND SOMEWHAT CONFUSING, I WOULD SAY WELCOME TO ADULT LIFE. YOU ARE THINKING THE RIGHT WAY, IT IS HARD. IT IS GOING TO BE WAY HARDER FOR THE GROUP THAT GRADUATED FROM COLLEGE NOW. FOR THEM TO GET RICH AND STAY RICH AND SO FORTH. IT WILL BE WAY HARDER FOR THEM THAN IT WAS FOR MY GENERATION. THINK WHAT IT COSTS TO OWN A HOUSE IN A DESIRABLE NEIGHBORHOOD IN A CITY LIKE LOS ANGELES. I THINK THE INVESTMENT WORLD IS PRETTY HARD AND I DON'T THINK, IN MY LIFETIME, 98 YEARS, IT WAS AN IDEAL TIME TO OWN A DIVEIFIE PORTFOLIO. ADDING THE NEW ONES THAT CAME IN LIKE THE APPLES AND ALPHABETS AND SO FORTH. I WOULD SAY THAT PEOPLE GOT MAY BE 11% IF YOU DID THAT INTELLIGENTLY. THIS IS BEFORE INFLATION. MAYBE 9% AFTER. THAT WAS A MARVELOUS RETURN. NO OTHER GENERATION IN THE HISTORY OF THE WORLD EVER GOT RETURNS LIKE THAT. I DON'T THINK THE FUTURE IS GOING TO GIVE THE GUY GRADUATING FROM COLLEGE THIS YEAR NEARLY THAT EASY AND INVESTMENT OPPORTUNITY. I THINK IT WILL BE WAY HARDER. >> THIS QUESTION IS FROM STEVE, WHAT WORRIES YOU MOST ABOUT OUR STOCK MARKET? WHAT MAKES YOU OPTIMISTIC? >> YOU HAVE TO BE OPTIMISTIC ABOUT THE COMPETENCY OF OUR CIVILIZATION. IF YOU TAKE THE LAST 100 YEARS, MOST OF MODERNITY CAME IN THOSE YEARS. IN THE PREVIOUS YEARS, THAT GOT ANOTHER BIG CHUNK OF MODERNITY. BEFORE THAT,THIN WE PRETTY MUCH THE SAME FOR THE PREVIOUS THOUSANDS OF YEARS. LIFE WAS PRETTY BRUTAL IN SHORT AND LIMITED IN WHAT HAVE YOU, NO PRINTING PRESS, NO AIR- CONDITNINGNO DERN MEDICINE, SO, AND, I DON'T THINK WE'RE GOING TO GET THINGS WITH THE REAL HUMAN NEEDS. INK WHAT IT MEANT TO GET SAY THE STEAM ENGINE, THE STEAMSHIP, THE RAILROAD AND IMPROVEMENT IN FARMING AND IMPROVEMENIN PLUMBING. THAT IS WHAT YOU GOT. THE NEXT 100 YEARS GAVE US ELECTRICITY, MODERN MEDICINE, THE AUTOMOBILE, THE AIRPLANE, MOVIES, AIR-CONDITIONING IN THE SOUTH, THINK OF WHAT A BLESSING IF YOU WANTED SIX CHILDREN FOR THREE CHILDREN HE HAD HAS 6 FOR 3 DIED IN INFANCY. THAT WAS OUR ANCESTORS, THINK OF THE AGONY OF WATCHING HALF YOUR CHILDREN DIED. IT IS AMAZING HOW MUCH ACHIEVEMENT THERE HAS BEEN AN CIVILIZATION IN THE LAST 200 YEARS. MOST OF THE WITHIN THE LAST 200 YEARS. THE TROUBLE WITH IT IS THAT THE BASIC NEEDS ARE PRETTY WELL FILLED. IN THE UNITED STATES THE PRINCIPAL PROBLEM OF POOR PEOPLE IS THEY ARE TOO FAT. THAT IS A DIFFERENT PLACE OF WHAT HAPPENED IN THE PAST. IN THE PAST THEY WERE ON THE EDGE OF STARVING. WITH ALL THIS ENORMOUS INCREASE OF LIVING STANDARDS AND FREEDOM RACIAL INEQUITIES AND ALL ISSUES PROGRESS THAT HAS COME, PEOPLE WERE LESS HAPPY ABOU THE STATE OF AFFAIRS THAN THEY WERE WHEN THINGS WERE WAY TOUGHER. THAT HAS A VERY SIMPLE EXPLANATION. THE WORLD IS NOT DRIVEN BY GREED, IT IS DRIVEN BY ENVY. THE FACT THAT EVERYBODY IS FIVE TIMES BETTER OFF THAN THEY USED TO BE, THEY TAKE IT FOR GRANTED. ALL THEY THINK ABOUT IS THAT SOMEONE ELSE HAS MORE NOW AND IT IS NOT FAIR THAT HE SHOULD HAVE IT AND THEY DON'T. THAT IS THE REASON THAT GOD CAME DOWN AND TOLD MOSES YOU COULDN'T ENVY YOUR NEIGHBOR'S WIFE OR EVEN YOUR DONKEY. EVEN THE OLD WERE HAVING TROUBLE WITH ENVY. IT IS BUILT INTO THE NATURE OF THINGS. IT IS RARE FOR SOMEBODY MY AGE BECAUSE I WAS IN THE MIDDLE OF HARDSHIP, IT WAS UNBELIEVABLE. I WAS SAFER WALKING AROUND OMAHA AND EVENING THEN MY OWN NEIGHBORHOOD IN LOS ANGELES AFTER ALL OF THIS GREAT WEALTH AND SO FORTH. I HAVE NO WAY OF DOING ANYTHING, CAN'T CHANGE THE FACT THAT A LOT OF PELE ARE VERY UNHAPPY AND FEEL ABUSED AFTER EVERYTHING HAS IMPROVED BY 600%. THERE SO SOMEBODY ELSE WHO HAS MORE. I HAVE CONQUERED ENVY, I DON'T CARE WHAT ANYBODY ELSE HAS. OTHEPEOP ARE CRAZY BY IT. OTHER PEOPLE PLAY TO THE ENVY TO ADVANCE THEIR OWN POLITICAL CAREERS. WE HAVE WHOLE NETWORKS THAT THEY WANT TO POUR GASOLINE ON THE FLAMES OF ENVY. I LIKE THE RELIGION OF THE OLD AND THE PEOPLE WHO WERE AGAINST ENVY. NOT THE PEOPLE WHO ARE TRYING TO PROFIT FROM IT. THINK OF THE PRETENTIOUS EXPENDITURES OF THE RICH. WHO NEEDS A ROLEX WATCH SO YOU CAN GET MUCH FOR IT? YET, EVERYBODY WANTS TO HAVE A PRETENTIOUS EXPEITUR AND THAT HELPS DRIVE DEMAND. MY ADVICE IS, DON'T GO THERE. THE HELL WITH EXPENDITURE. I DON'T THINK THERE'S MUCH HAPPINESS IN IT. >> IT DOES DRIVE THE CIVILIZATION THAT WE HAVE. >> GO AHEAD. >> HE POINTS OUT THAT EVERYTHING HAS GOTTEN BETTER BUT THE GENERAL FEELING ABOUT HOW FAIR IT IS HAS GOTTEN WAY MORE HOSTILE. AS IT GETS BETTER AND BETTER, PEOPLE ARE LESS SATISFIED. THAT IS WEIRD, BUT THAT HAS BEEN WHAT HAS HAPPENED. >> JERRY MILLER FROM WISCONSIN WRITES IN, HE'S LOOKING BACK AT YOUR JOURNEY THROUGH LIFE WITH WARREN BUFFETT. WHAT IS THE TOUGHEST MOMENT YOU'VE SHARED WITH WARREN AND OF COURSE WHAT IS A VERY BEST MEMORY YOU HAVE SHARED DURING HER LIFE WITH HIM? YOU TWO SEEM LIKE YOUR BROTHERS BY DIFFERENT MOTHER AND MAY GOD CONTINUE TO BESTOW HIS BLESSINGS ON YOU. TOGETHER YOU'RE ONE OF THE UNIT STATES GREATEST TREASURES AND INDIVIDUALLY YOU AIN'T TOO BAD EITHER. >> WELL, GOD IS ABOUT TO GIVE A DIFFERENT KIND OF A BLESSING ON WARREN AND ME. HE IS GOING TO GIVE US WHATEVER AFTERLIFE THERE IS. OF COURSE NOBODY KNOWS ANYTHING ABOUT THAT. IT HAS BEEN A GREAT RUN. WARREN AND I HAVE HAD A GREAT RUN. ONE OF THE REALLY GREAT THINGS ABOUT IT IS THAT WE'VE BEENSURR THE PEOPLE WE'VE SHARED IN OUR WORK LIVES. WITH JERRY AND DAYA, THIS LITTLE BUSINESS HAS BEEN A PRIVILEGE. IT IS A PRIVILEGE TO BE HERE AND SO FORTH. WE HAVEN'T HAD A BUREAUCRACY LIKE OTHER PLACES. WE'VE MANAGED TO COPE PRETTY WELL WITH THE PROBLEMS THAT CAME TO US, AND THE OPPORTUNITIES TOO. WE HAVE BEEN BLESSED. IT IS ALL OLD-FASHIONED VIRTUE. JERRY AND I DON'T HAVE ANY SECRETS. WE TEND TO GET THE DAYS WORK DONE AND BE AS RATIONAL AS WE CAN AND COPING WITH WHATEVER WE HAVE TO COPE WITH. THAT WILL ALWAYS WORK FOR PEOPLE . WARREN AND I HAVE BEEN VERY FORTUNATE. OF COURSE THERE ARE LESSONS YOU CAN LEARN. THERE ARE SO MANY PEOPLE THAT LIVE SURROUNDED BY TYRANNY. THERE ARE A LOT OF BOSSES IN THE WORLD THAT ARE ABSOLUTELY IMPOSSIBLE TO BE UNDER. YOU REALLY CAN'T DO ANYTHING ABOUT IT IN MANY CASES. WARREN AND I HAVE NOT HAD THOSE PROBLEMS, THAT IS A BLESSING. >> CHARLIE, HE SAYS YOU SEEM CONTENT, WHAT IS YOUR SECRET TO LEAD A HAPPY LIFE? >> I ALWAYS SAY THE SAME THING. REALISTIC EXPECTATIONS, WHICH IS LOW EXPECTATIONS. IF YOU HAVE UNREASONABLE DEMANDS ON LIFE, YOU ARE ALMOST LIKE ARD THAT IS TRYING TO DESTROY HIMSELF BY BASHING HIS WINGS ON THE EDGE OF THE CAGE. YOU REALLY CAN'T GET OUT OF THE CAGE. IT IS STUPID. YOU WANT TO HAVE REASONABLE EXPECTATIONS AND TAKE LIFE, GOOD AND BAD AS THEY HAPP WITH A CERTAIN AMOUNT OF STOICISM. THERE WILL NEVER BE ANY SHORTAGE OF GOOD PEOPLE IN THE WORLD. ALL YOU HAVE TO DO IS THINK ABT IN YOUR LIFE AND KEEP THE REST THE HELL OUT. >> THIS ONE COMES FROM WES IN MIAMI, FLORIDA. IN YOUR STORIED INVESTOR CAREER, WHICH INVESTMENT DID YOU LIKE THE MOST AND WHY IN WHICH ONE WAS A DOG? >> THAT IS RATHER INTERESTING. ONE OF THE INVESTMENTS THAT NOBODY EVER TALKABOUT AT BERKSHIRE IS A WORLD BOOK ENCYCLOPEDIA. I GREW UP ON IT. THEY USED TO SELL IT DOOR-TO- DOOR. THAT WAS, THEY HAD EVERY WORD IN THE ENGLISH LANGUAGE GRADED FOR COMPREHENSION AND A VAST AMOUNT OF INPUT. IT WAS EASY FOR A CHILD WHO WASN'T A BRILLIANT STUDENT TO UNDERSTAND THAT ENCYCLOPEDIA. IT WAS MORE UNDERSTANDABLE. BERKSHIRE MADE $50 MILLION A YEAR OUT OF THE BUSINESS FOR YEARS AND YEARS AND YEARS. I WAS ALWAYS SO PROUD OF IT BECAUSE I GREW UP WITH IT AND IT HELPED ME AND SO FORTH. OF COURSE I LIKED THE $50 MILLION A YEAR. AND THEN A MAN NAMED BILL GATES CAME ALONG AND HE DECIDED TO GIVE AWAY A FREE ENCYCLOPEDIA WITH EVERY BIT OF SOFTWARE IN HIS PERSONAL COMPER SOFTWARE. AWAY WENT OUR $50 MILLION A YEAR. NOW WE STILL SELL THEM TO THE LIBRARY'S BUT MOST OF THE WEALTH JUST WENT AWAY AND ALL THAT WONDERFUL CONSTRUCTIVE PRODUCT. IT IS STILL A MARVELOUS PRODUCT. IT WASN'T GOOD THAT WE LOST WHAT THEY WERE DOING FOR CIVILIZATION. I WAS SO PROUD OF WORLD BOOK BUT NOW IT IS JUST, IT IS PRETTY WELL GONE AWAY IN TERMS OF THE SIGNIFICANCE, AND THE MONEY WENT WITH IT. THAT IS JUST THE WAY CAPITALISM WORKS. SOME OF THE THINGS YOU LOSE, YOU'RE REALLY GOING TO MISS. YOU'RE NOT GOING TO REPLACE TH. I DON'T THINK THESE TV PROGRAMS THAT CHARM OUR CHILDREN ARE AS GOOD AS THE WORLD BOOK WAS. WILL YOU HELP ME GET AHEAD IN LIFE? THE PEOPLE WHO WILL NOT READ THE WORLD BOOK AND HANGING IN FRONT OF THE TV SAYS, THEY ARE NOT BLESSED, THEY ARE CURSED. THERE ARE ADVANTAGES AS WELL JABBING A TELEVISION SET. >> CHARLIE, A FINAL QUESTION FOR YOU. THIS ONE COMES FROM -- >> BY THE WAY, I DON'T HAVE TEARS THAT I DON'T HAVE MY WORLD BOOK ANYMORE, I HAVE ADJUSTED. I MISS IT BUT -- >> THIS LAST QUESTION COMES FROM MATT McALISTER. FIRST OF ALL, THANK YOU FOR SHARING YOUR WISDOM SO GRACIOUSLY AND GENEROUSLY. OF THE FIVE PEOPLE OR SO YOU MOST ADMIRE, COULD YOU PLEASE NAME IF YOU SO WE MIGHT BECOME MORE FAMILIAR WITH THE INDIVIDUALS AND LEARN FROM EM >> I DON'T HAVE ANY ONE PERSON, I WOULD ARGUE THAT THE GREATEST GOVERNMENTAL LEADER WAS FROM SINGAPORE. I WOULD ARGUE THAT HE WAS THE ONE WHO TAUGHT CHINA HOW TO FIX CHINA THE WAY THE SINGAPORE HAVE FIXED ITSELF. IT WAS A GE ACHIEVEMENT. I'VE SEEN SOME REMARKABLE THINGS. THE MARSHALL PLAN MY COUNTRY DID AFTER WORLD WAR II WAS A MARVELOUS THING. THAT WAS A CREDIT TO THE HUMAN RACE. I'VE SEEN A LOT OF THAT I'M PROUD OF. ON THE OTHER HANDI SEE A LOT NOW THAT I'M NOT PROUD OF. I DON'T LIKE THIS CRAZY HATRED IN OUR PARTY SYSTEM. I DON'T SEE ANYTHING WRONG WITH HAVING A GOOD SIZE GOVERNMENT SAFETY NET. BY THE WAY, YOU KNOW WHERE THAT CAME FROM. AUTO BISMARCK. HE WAS THE IRON CHANCELLOR OF GERMANY EXERCISING THE UNLIMITED POWER OF THE GERMAN KING. THAT IS WHO GAVE US SOME SOCIAL SECURITY AND SO FORTH. NOBODY THINKS OF HIM AS A GREAT CHALLENGER. MY HERO, OTTO . I'VE NEVER SEEN HIS PICTURE ON THE WALL, HE SHOULD BE THERE. WELL, BECKY, HAVE YOU HAD ENOUGH? >> YES, CHARLIE I WANT TO THANK YOU VERY MUCH FOR YOUR TIME TODAY. JERRY, THANK YOU AS WELL. THANK EVERYONE FOR THEIR QUESTIONS TODAY. WE APPRECIATE EVERYONE COMING TO THE DAILY JOURNAL. >> IT ISN'T THAT WE WANT TO BE THE GURU FOR THE WORLD OR SOMETHING, WE USED TO KNOW ALL OF THE JOURNAL OURS AND WE FELT LIKE WE SHOULD ANSWER QUESTIONS FOR THEY STARTED ANSWERING. IT WAS A MARKET FOR IT AND WE KEPT DOING IT. SO, WARREN AND I ARE ACCIDENTAL GURUS. I USED TO BE BOTHERED BY IT BECAUSE I DON'T ORDINARILY MAKE THIS MANY PRONOUNCEMENTS. I'VE GOTTEN USED TO IT AND I HOPE YOU PEOPLE HAVE AS WELL. >> ARE RIGHT, WE WANT TO THANK EVERYBODY FOR COMING AND WE SHOULD SEND IT BACK OVER TO KARINA, GENTLEMEN, THANK YOU AND THANKS EVERYBODY ELSE OUT THERE AS WELL. >> THANK YOU SO MUCH AND YOU BEEN WATCHING YAHOO FINANCE, SPECIAL COVERAGE OF THE ANNUAL MEETING HELD IN LOS ANGELES. IF YOU MISS ANY PART, YOU CAN CATCH A FULL RECAP ON THE EVENT AT YAHOO FINANCE.COM. A GREAT CONVERSATION ACCESS. ALWAYS INTRIGUED TO HEAR HIS REMARKS FOR THE KEY TO A HAPPY LIFE, HAVE LOW EXPECTATIONS.
