Warren Buffett Q&A Transcript || The David Rubenstein Show (2016)

"You’re only going to live once — so you don’t want to go sleepwalking through life."

On November 2, 2016, Warren Buffett appeared on an early episode of Bloomberg’s The David Rubenstein Show. In this “Peer-to-Peer Conversation”, Buffett walked Rubenstein¹ through his life and career — touching on a number of fascinating topics like the acquisition of Precision Castparts and what’s left on his bucket list.

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 — 30 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 1,500-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 ten 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 The David Rubenstein Show from 2016…

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David Rubenstein: We’re at your favorite restaurant in Omaha — Gorat’s. Why do you like it so much? Is it the food or the price or the combination of both?

Warren Buffett: It’s the food and the price and the heritage. Four generations of the Gorat family were involved here — Pal Gorat and I went to grammar school together, so I’ve known the people over the years.² The steaks are great [and] the prices are right.

I had lunch here earlier today. It was very good and it wasn’t that expensive. I quite enjoyed it. A lot cheaper than New York and Washington.

A lot. That’s why I buy people lunch here and then they can buy me the lunch in New York. (Laughs)

That’s a good deal. Good arbitrage. You grew up in Omaha, but then you moved to Washington when your father became a congressman.

Right.

How did you start your business career in Washington with various pinball machines or golf businesses?

I always liked to have a couple of businesses going³ — and the best business we had was the pinball machine business, which was the Wilson Coin-Operated Machine Company. That was named after the high school my partner and I went to.

We had our machines in barber shops and the barbers always wanted to put in machines with flippers — which were just coming in — but those machines cost $350 whereas an old, obsolete machine cost $25.

So we always told them we’d take it up with Mr. Wilson, this mythical Mr. Wilson. He was one tough guy, I gotta tell you. (Laughs)

So when you graduated from high school, you weren’t as interested in academics, I assume, at that time?

I was not interested.

Your high school yearbook said he’s likely to be a stockbroker because he’s very good in math. Why did you go to Wharton and why did you only stay two years there?

I didn’t want to go to college, but my dad wanted me to go to college. We didn’t have SATs then, but he practically would have done the SATs for me. (Laughs) In truth, I always wanted to please my dad — he was the hero to me and still is — so he kept kind of cajoling me along and said, “Why don’t we just fill out an application for the hell of it?” He suggested Wharton and I applied there and they let me in.⁴

After the first year, I wanted to quit and go into business, but my dad said, “Give it one more year.” So I went the second year and I said I still want to quit and he said, “Well, you’ve got almost enough credits. If you go to Nebraska” — which I was quite willing to do — “for one year, you can get out in three years.” So that’s what I did.⁵

Has Wharton ever called you up and said that, since you’re a half-graduate, you should give us some money or do they never bother you?

(Laughs) So far, they haven’t tried that line — but they may after they watch this.

After that, you wanted to go to business school?

Yeah, I had won some minor scholarship at Nebraska to go to any graduate school I wanted to [and] they’d give me $500. My dad suggested Harvard, so I applied.

And you didn’t get in?

I didn’t get in. It took ten minutes for the guy… A guy near Chicago interviewed me, so I spent about ten hours going to see him and he looked at me and he said, “Forget it.” (Laughs)

Have you ever run into that guy again? Have you heard from him since?

No, he needs protection now. (Laughs)

So I guess Harvard doesn’t come after you for money because they turned you down. You went to Columbia Business School. Why did you go to Columbia?

I was at what was then called the University of Omaha’s library in August and I was leafing through catalogs and I just happened to see that Columbia had Graham and Dodd as teachers. I had read their book, but I had no idea that they were teaching.⁶

So I wrote Dean Dodd and I said, “Dear Dean Dodd, I thought you guys were dead — but now that I found out you’re alive I’d really like to come to Columbia if you can get me in.”

You did, I assume, pretty well at Columbia Business School?

I did okay there, yeah.⁷

You worked for Mr. Graham at his partnership. How did that work?

It was terrific in the sense that I was working for my hero. But Ben was going to retire in a couple of years, so I was only back there for about a year and a half. But every day I was excited about being able to work for him.⁸

What you were good at was picking stocks according to his formula, which was to look for companies that were undervalued. Now, we call it value investing.

Did you realize that he had some principles that were very unique and is that why you followed his guidance?