Exactly one year after Lehman Brothers collapsed and set the global financial system ablaze, Warren Buffett stepped onto the stage at Fortune’s “Most Powerful Women” summit in California. On September 15, 2009, with the economic wreckage still smoldering, he sat down with close friend, Fortune editor-at-large Carol Loomis, to reflect on the year that nearly broke Wall Street.
The conversation takes us back to that fateful weekend in 2008, when the biggest names in finance came knocking on Berkshire Hathaway’s door, hat in hand, looking for a lifeline. Buffett recounts what it was like to sit at the center of the storm — and how the panic furiously rippled through markets and the broader economy.
Along the way, he also touches on other topics of interest to readers of this newsletter like not letting macroeconomic conditions dictate your investment decisions and how the nation’s mounting debt must be dealt with sooner or later.
What struck me most is how little Buffett changes. Whether the sun is shining or the sky is falling, his message and demeanor stay the same. Here was a man speaking in the middle of an economic upheaval, one that, by his own admission, was still far from over — and he sounded exactly like he did at the peak of the greatest bull markets.
Calm, patient, and unmoved by the noise around him.
Anyone can look strong and steady when times are good, but real consistency reveals itself under pressure. And I think there is a great deal we can all learn from this.
Note: The only video of this event that I’ve been able to track down covers only Buffett’s conversation with Loomis — and not the audience Q&A that followed. If anyone has that portion of the summit, please send it my way and I’ll add that material to this transcript.
Carol Loomis: Warren, here you are, back by popular demand. Those of you who were here last year, the date that Warren was up here before you was October 2. The financial world had been falling apart for about three weeks [at that point].
Yesterday, the President kind of added an alliterative phrase to it. He said, “We had buyouts. We had bankruptcies. We had bailouts.”
The first big companies to go were Fannie and Freddie. The next weekend, AIG and Lehman looked hard for money and Merrill Lynch was bought by BofA. Lehman went bankrupt a year ago today. Two days later, it was AIG announcing that $85 billion infusion, which has now gone up to a commitment of $180 billion.
You had made your investments in Goldman Sachs and GE by that point. The GE one had just been announced.
There were a lot of things, I think, maybe you couldn’t say at that time about the calls you were getting — so tell us, if you can, what kind of calls you were getting and how much emotion was in them and what were you saying?
Warren Buffett: I was saying, “No.” (Laughs)
