Warren Buffett: A Class Apart || Q&A Transcript (2011)
"To try to live your life totally free of mistakes is a life of inaction."
On April 15, 2011, Warren Buffett and Ajit Jain spoke to NDTV and a select group of business school students from India’s top colleges for a television special titled “A Class Apart”. For over an hour, the students (and host Dr. Prannoy Roy) peppered the Berkshire Hathaway pair with questions about both business and life. Enjoy!
🚨 Questions from the host and business school students are in bold, Warren Buffett’s comments are in plain text, and Ajit Jain in italics. (I have tried to strike the right balance in keeping this transcript visually clean, but still understandable.)
Host: There are times in your life when you are really happy to get to work and [you] tap dance to work like the gentleman I have here. This is one of those moments when I’m really thrilled to be a journalist because with me are a whole lot of students and the one and only, Warren Buffett. And I must say that I’m equally very, very thrilled to have one of the most modest, humble, and good human beings that I have met — Ajit Jain. Get your questions ready and please be impressive. Short, sharp questions. And be tough. This is your one chance! (Laughs)
Warren Buffett: Anything goes!
You gave a press conference after landing in India and you said, “It’s only [been] three hours and I can’t really comment much.” But you’re a man who looks at more than just the quantitative numbers. 8% growth rate, 10% growth rate. You have a qualitative feel. From your little time here, what are your impressions of India?
It is much as I expected. I expected to see a booming economy, which I’ve seen. Our particular plant that I visited in Bangalore is just expanding very rapidly. But I’ve had a chance to get to meet a lot of people — and I’ve made some new friends and a few of them I’ve invited over to our annual meeting in Omaha. I told them to be sure and vote for me if they come. (Laughs) It’s been nothing but fun so far.
It’s been a hectic schedule.
It’s busy, but I get paid by the hour so it doesn’t make any difference. (Laughs)
These kids tend to embarrass me because they’re much, much more competent [than me]. I think Ajit will agree with me that this younger generation in India is much more competent than our generation. Is it the other way around in America? That the younger generation has got everything they really need and they’re not as hungry, so it’s a reversal that you’ve got a great existing generation and a not-so-hungry new generation. We’ve got a dumb old generation like us, but a really hungry young generation.
I’m going to meet with 48 schools this year, universities. A couple of them from outside the country, but 45 of them are from America — and I love it.1 But I’m seeing people that kind of remind me of myself when I look out there.
They’ve got lots of energy, they’re smarter than I was, but they’re looking forward to doing the same thing I’ve done. They look at me and they think, “My God, if he can do it, I can do it. It must be easy!” When they look at [Bill] Gates, they don’t think they can do what he did. But when they look at me, they go, “Anybody could do that.”
Student Question #1: My question is regarding the markets in India — the equity and the bond markets. What financial innovations would you recommend for the Indian markets to be more developed?
I really don’t know your markets here that well. I look at individual companies and if I find a business… What I like to do first is I like to value the business before I even look at its price because if I look at the price of the stock, it will have some impact on my valuation. I like to go in without having the faintest idea of what the stock is selling for. And I look at a stock as a piece of a business, so it’s what the business is selling for. So I look at the business first and value it — but I don’t really care about a lot of innovations in a market.
In the end, I just want to buy a piece of a business that I feel has a good future, honest and able management, and buy it at the right price. Whether there’s an option market attacking it or any of that sort of thing, it really has no impact on us. We’re in the business of buying businesses. And we buy some of them in their entirety — we like to do that particularly — but some of them we buy part of. We own part of Coca-Cola, but we own all of seventy some businesses.
When you say you don’t even look at the stock market, how often do you look at the price of shares?
I would say that I probably look at the price of Berkshire once every two weeks. Something like that.
That’s it?
Yeah. It doesn’t make any difference. I haven’t bought or sold a share for forty years.2 Somebody said, “What’s a good time to sell Berkshire?” and I said, “I don’t know. I’ve never sold any.” (Laughs)
The only time I’m interested in the price of a stock is when I’m either buying or selling it. We’re buying one stock right now.3 I hope it goes down, obviously, because I’ve got billions of dollars worth of it left to buy. Most people like their stocks to go up. I like our stocks to go down because I form my own independent judgment of what they’re worth [so] the cheaper they are, the better it is from our standpoint.
Student Question #2: How do you identify moats? It’s easy now to sit here and say that Coca-Cola’s moat is expanding, but when you bought it there were a lot of suspicions about whether the company would make it through or not. How do you get the conviction to go out and buy a stock when the market is against you?