Warren Buffett Q&A Transcript || Iconic Voices (2015)

"I like to deal with people where I feel a one-page contract will do the job. If I [need] 50 pages in there to protect me against the guy I’m dealing with, I’ll always wonder whether I needed 51."

On January 26, 2015, Warren Buffett sat down with Arizona State University professor (and former publisher of Forbes) Jeff Cunningham for an episode of the Iconic Voices interview program.

Over the past few weeks, I transcribed (and lightly annotated) his remarks for posterity and future study.

A few notes:

• Each transcript is done entirely by hand — with no AI or software assistance — so any and all mistakes are my own.

• I added footnotes — 26 in all — to provide additional information at relevant points. Hopefully, these will prove useful to readers.

• The full transcript is available to all paid supporters. Free subscribers have access to the first 2,000-ish words. (That’s longer than the typical Kingswell article.)

  • I’ve tried to do my best to ensure that no one feels short-changed.

• Become a paid subscriber today and receive immediate access to this transcript — along with eleven other annotated transcripts full of wit and wisdom from the top names at Berkshire Hathaway.

Now, without further ado, here is the complete transcript of Warren Buffett’s guest spot on Iconic Voices in 2015…

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Jeff Cunningham: I’m Jeff Cunningham, professor at Arizona State University, and I’m here this morning with legendary investor, philosopher, and CEO of Berkshire Hathaway, Warren Buffett. Good morning, Warren.

Warren Buffett: Good morning.

I don’t know if you’ve had the chance to Google yourself, but if you Google “Warren Buffett” you get 25 million hits. My question is: You’re a sitting CEO, you’re wealthier than Midas, but everybody thinks you’re a champ. How do you do that?

Well, I don’t know about that. (Laughs) I think when you get older, they forgive a lot of things. So if I ever make it up to George Burns’s age or something and I just have a cigar in my mouth, people will really love me then. (Laughs)

You are arguably the most interviewed CEO in history. Does your ability to communicate come from instinct or is it something you’ve learned over the years?

I certainly learned to speak in public at one time. I was terrified of speaking in public when I was in high school. I avoided any class that would require it — and in college — and then I finally signed up for a Dale Carnegie course when I got out of school.¹ I realized that I had to talk to people. I spent $100 and I got this little diploma. I proposed to my wife during the term of the course, so I really got my money’s worth there. But, in terms of public speaking, I really had to force myself on that.²

In terms of talking privately, they couldn’t stop me from the moment I started — in school or anything. (Laughs) I’ve always liked to talk.

How do you keep up with all the media and information that goes on in our crazy world and in your world at Berkshire Hathaway? What’s your media routine?

I just read and read and read. I probably read 5-6 hours a day. I don’t read as fast now as when I was younger, but I read five daily newspapers, I read a fair number of magazines, I read 10-Ks, I read annual reports — and I read a lot of other things, too. I’ve always enjoyed reading. I love reading biographies, for example.³

You process information very quickly.

I have some filters in my mind, so if somebody calls me about an investment in a business or an investment in securities, I usually know in two or three minutes whether I have an interest. I don’t waste any time with the ones in which I don’t have an interest. I always worry a little bit about even appearing rude because I can tell very, very, very quickly whether it’s going to be something that will lead to something — or whether it’s just a half an hour, an hour, or two hours of chatter.

You wrote in an annual report — it was in 2009 — speaking about the country, about the economy, “We are certain, for example, that the economy will be in shambles throughout this year.” The problem was, that wasn’t the complete quote and it lent the impression that you were unduly pessimistic about the country. How did you respond to that?

Well, I wasn’t at all pessimistic about the country.⁴ In fact, I wrote an op-ed piece for the New York Times in October of 2008, just when the world was kind of falling apart, and I said the world is going to fall apart for a while, but don’t worry about it — we’re going to come out fine on the other side. And I said buy stocks.⁵

I’ve never been pessimistic about the United States. I bought my first stock in the spring of 1942 — I was eleven. If you remember — you don’t remember and no one watching this will remember — but we were losing the war at that time. We were getting totally creamed in the South Pacific. The Philippines fell and the Death March of Bataan and all of that sort of thing. It was not until the Battle of Midway, which was a little later, that things started turning around. But I was optimistic on the country then and I’ve been optimistic on the country ever since.

Incidentally, the Dow Jones average then was 100 and it’s 17,000 now. (Laughs) No one has ever been a success betting against America since 1776 — and they’re not going to be a success in the future doing it, either.

When the Dow hit 1,000, it was a moment of euphoria. Yet, if I’m not mistaken, you plowed in and you even raised more funds. Has the Dow ever felt to you like it was way too frothy?

There were a couple of times when it looked too frothy to me — but that’s in fifty years. I gave a talk in 1999 that has gotten reprinted in Fortune subsequently.⁶

There have been a couple of times when it really looked to me like people had gotten too excited. But, even then, I knew that the country would… Any marker that we would establish, we were going to surpass later on. And that continues true to today. This country is just getting started.

I was reading a Lincoln quote the other day: “With public sentiment, nothing can fail. Without it, nothing can succeed.” Of course, he was talking about what led to the Emancipation Proclamation.

When I think about your world — 330,000 people who are employees of Berkshire Hathaway or its subsidiaries — how do you send the message that they are being scrutinized under the microscope by the media at all times?

Well, I send a message to their managers. Those 330,000 people work for maybe 70 or so CEOs who, in turn, work for me. My job is to have those 70 CEOs sending out the right message [to their employees]. So, every two years, I write them a very simple letter. It’s a page and a half. I don’t believe in 200 page manuals because if you put out a 200 page manual, everybody’s looking for loopholes basically. But, at a page and a half, it’s very hard for them to argue about what I’m talking about.

I tell them that my reputation, Berkshire’s reputation, is in their hands. And we’ve got all the money we need — we’d like to make more money, but we’ve got all the money we need. We don’t have an ounce of reputation beyond what we need and we can’t afford to lose it. So we never will trade reputation away for money. And they are the ones who are the guardians of that.

I want them to not only do what’s legal, obviously, but I want them to judge every action by how it would appear on the front page of their local paper written by a smart but semi-unfriendly reporter, who really understood it, to be read by their family, their neighbors, their friends. It has to pass that test as well.

I tell them I don’t want anything around the lines. There’s plenty of money to be made in the center of the court. I’m 84 and my eyes aren’t that good anymore — I can’t quite see the lines that well — so just keep it in the center of the court. And if they have any questions, call me.

Even the occasional dustup at Berkshire —

There will be.

— is big news.

Yeah.

I’ll pick on Salomon only because it’s history now —

Yeah, I know, it’s a good one.

— and there’s been a lot of time to reflect on that. When you think about what you went through there, what advice do you have for a CEO who is on the media hot-seat because of a similar situation?