Warren Buffett Q&A Transcript || Omaha Press Club (1992)
"I say that 90% of investing is assigning yourself the right story. The reporting of it is fairly easy."
On September 2, 1992, Warren Buffett spoke to the Omaha Press Club for close to an hour about his own experiences with the media and the industry’s cloudy future.
Over the past few weeks, I transcribed (and lightly annotated) his remarks1 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 summarized and paraphrased a few of the questions to save space. All of Buffett’s answers are transcribed verbatim.
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 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 seven 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 thought-provoking discussion with the Omaha Press Club in 1992…
Robert Dorr: I don’t exactly know what to say. Introducing Warren Buffett before this group is like introducing Garth Brooks at a country music concert. (Laughs) In addition to dealing with the news media, I think most of you know that he’s an owner of news organizations and has large holdings in the Washington Post, Capital Cities/ABC, and owns the Buffalo News.
As a reporter who has dealt with Warren on a number of occasions, I can tell you what that’s like.2 He is invariably accessible, courteous, and straightforward — but, generally, non-talkative. (Laughs) You generally have to assemble your news stories by talking to other people and from the public record.
It’s not that that keeps him out of the press — I checked our computer today and, since 1983, he has been mentioned in 862 stories in our newspaper.
Warren says he will speak for about ninety seconds and then turn to questions. So, Warren, with that I’ll turn it over to you.
Warren Buffett: As long as I stay out of the obituaries, I feel fine about that. (Laughs)
One of the comments that Howard Simons used to make at the Washington Post — Howard Simons was the managing editor at the time of Watergate under Ben Bradlee and later on went on to run the Nieman [Foundation for Journalism] — people constantly complain, as you in the news business know, [about] how can you write about business when you haven’t been in business? How can you write about sports when you haven’t been a football player yourself? And his retort to that was, “You don’t have to be dead to write obituaries.” (Laughs)
On the topic of dealing with the news media, it seems to me that probably the best advice I can give to you who have to do that is that it’s really very much like the old advice about making love to a porcupine: It’s done very carefully.
But, nevertheless, I have very fond memories of the media because I wouldn’t be here if it weren’t for the newspaper business. My grandfather, in 1905, bought the Cuming County Democrat in West Point, Nebraska. Believe it or not, in West Point, which was probably 2,000 people in those days, there were two newspapers: the West Point Republican and the Cuming County Democrat.
His grandson learned something about what it’s like to operate in a two-newspaper town.3 But these two newspapers existed and my grandfather had his family — and my mother and her sisters and brother — they lived over the newspaper in a little string of rooms on the second floor.
When my mother was 11, she literally could run a Linotype. As a matter of fact, the Intertype people — who made Linotypes in those days — wanted her to travel to Des Moines to exhibit the operation of a Linotype to prove their statement that it’s such a simple machine that even an 11-year-old could operate it.
She would go down to the train station where, twice a day, a train would come through and she would get on the train when it stopped in little sparse West Point and she would interview people and write stories for the paper. She sold ads for the paper. This was all during [her] high school years. She started the West Point High School paper and when she got out of high school, she was 16 but she worked three years in the newspaper to get the money to go to school at the University of Nebraska.
When she got to the University of Nebraska, one of the first things she did was to go to the Daily Nebraskan and apply for a job. The fella who interviewed her was my dad, who was the editor of the Daily Nebraskan.
A few months later, after the first semester, my granddad lost his foreman who bought a paper in Eustis, Nebraska, in the south, so he called my mom and asked her if she would come back to help out with the paper — which she did. So she took off a semester and then came back again to Nebraska and, a year or so later, married my dad.
The fact that two sides of the family had a strong interest in the newspaper business4 — coupled with the stock market crash, I must admit, because my dad actually wanted to go into newspapering — and he had an offer from Greg McBride, I think it was [unintelligible] at the house where McBride told him to make up his mind.
My dad [unintelligible] had that idea at the time, which has long passed out of favor, that he would let his father, who had paid for his education, call the shots on his first job. And my grandfather on that side had different ideas, so he came to Omaha and became a stock salesman.
I was born in 1930, but I was conceived right around November 30, 1929. For those of you who can put together what it would be like selling stocks in the fall of 1929 — my conception — will understand what happened. (Laughs) So that’s the story of how I got here and I’ve spent the rest of my life trying to figure out how to avoid having the media end my life. (Laughs) I guess that’s the subject of our seminar this evening.
I think the best way to do this is to just throw it open for questions. I’ve been around newspapers a long time. I worked for the Lincoln Journal in college, I delivered five newspaper routes when I was in Washington. I had two-tenths of one percent of all the Washington Post circulation in 1944. I had this marvelous system because I delivered both the Post and its competitor, the Times-Herald. If my service was a little sloppy and people changed papers they [still] found my smiling face there. (Laughs)
There was a publisher in Alabama many years ago who said he owed his prosperity to two fine American institutions: monopoly and nepotism. With some of those papers, I figured out the monopoly aspect of it, anyway. (Laughs)
Let’s start in with some questions — and the tougher, the better.
Q1: I take the Washington Post national weekly edition and several years ago Hobart Rowen had in his column that the real national debt was about $14 trillion. Now, that was three or four years ago and I was shocked by the statement — but nobody ever seemed to pick it up. I’m just wondering if that debt number is true. I’ve quoted him on a couple of occasions.
WB: Well, it’s a good figure. Don’t stop. (Laughs) We’ve had 128 tax increases in Arkansas or something like that.5 You don’t want to let facts get in your way.
Bart was probably referring to the actual debt, which may have been $3.5 trillion then. Plus, he may have been taking the present value of actuarial promises to people in the Social Security system. When you have promised virtually everyone a retirement income which is geared to inflation and you “present value” that, you get a huge sum. Now, on the other hand, the federal government obviously has the power to tax people in those future years to, in effect, make transfer payments.
Social Security really isn’t an insurance fund or an insurance operation. It started out with sort of that idea in mind, but it’s accepted as what they call an intergenerational transfer payment now. And as long as the federal government has the power to tax, it may have to tax more and more because it’s undertaxing now in relation to its actual actuarial costs.
But it has enormous assets, too. The value of all American corporations is $4 trillion. The government gets 34% of their profits and stockholders get 66%. I’m leaving out state income taxes. You can say the government owns 34% of those corporations in terms of their earning power and it has the right to increase its ownership merely by passing a bill that they’re going to get 40% of the profits or 50% of the profits.
So it has enormous assets and it has enormous liabilities. You can play around with either side of the equation, but essentially the country has more taxing power than is used — which is why people don’t get too upset about the $400 billion national debt. They know there is untapped taxing power. Now, it may be that politicians don’t have the will to do it, but they have the ability to do it. That keeps government bonds selling as probably the safest investments in the world.
Okay, how about a media question here.
Q2: Does the Buffalo News endorse political candidates and will you be participating in that endorsement?