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Highlights of Warren Buffett x Charlie Rose 2022
"I think all the time," says Buffett. "I'm on the clock at Berkshire all the time."
Last Thursday — completely out of the blue — a new Warren Buffett interview dropped. While Buffett never strays too far from the media spotlight, he has noticeably pared back his public comments over the past few years, making any new interview a cause for celebration.
Other than his annual letters and annual meetings for Berkshire Hathaway (and the occasional sit-down with CNBC’s Becky Quick), Buffett has kept his thoughts pretty close to the vest since Covid-19.
Here, though, Buffett offers up a wide-ranging discussion on his career and investing outlook. FYI — This interview apparently took place in early March, after Berkshire invested billions in Occidental Petroleum but before the Alleghany Corp. acquisition.
It’s typically insightful stuff from Buffett on all fronts. But, since not everyone has the time (or inclination) to watch a 75-minute conversation on investing, I’ve pulled out the main points to make this a little easier on everyone…
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On his health and future:
I’m 91. I couldn’t be in better health. It’s a little discouraging to me, though, that my partner in business, life, everything else, Charlie Munger is 98! I’m still the kid!
We have a successor [for Berkshire Hathaway] in place, but he’s not warming up. (Laughs) I’m still in overtime, but I’m out there.
On his typical day:
I get up, usually, at a few minutes before seven so I can catch the 7:00 a.m. news, the network news in Omaha. So I get up a few minutes before that. Sometimes I turn on the network news, I turn on CNBC and I look at what prices are doing — what’s happening in Europe and what’s happened in Japan.
I call Mark [Millard] at 8:00 a.m. with the market opening at 8:30 a.m. and I tell him exactly what to do for the day.
It’s usually a percentage of something — I will say, “Buy or sell X% of the trading volume,” and I’ll give him a list of things. If there’s a limit of price, I’ll give him the price. And then he does it all day. I don’t need to check with him. He sometimes does billions of dollars of business.
He buys the treasury bills. The last couple years, we probably bought $5 billion every Monday. I would guess that we might be the biggest buyer, just week after week after week.
On the evolution of his investment philosophy:
For the first eight years [starting at age eleven], I thought the important thing was to predict what a stock would do and predict the whole stock market. Then I read Ben Graham when I was nineteen or twenty and I realized that I was doing it exactly the wrong way. I re-jiggered my mind when I read the book “The Intelligent Investor”.
From that point, I never bought another stock — I bought businesses that happened to be publicly traded. I became an owner in a business. I did not care whether a stock went up or down the next day or the next week or the next month or the next year. I didn’t have any idea what it would do, I didn’t know what the stock market would do, but I knew businesses.
On being an intelligent investor:
You don’t need to be a genius in what I do. That’s the good thing about it. If I went into physics or a whole lot of other subjects, I’d be an also-ran. But I am in a game that you probably need 120 points of IQ. 170 doesn’t do any better than 120. It would probably do worse. You don’t really need brains.
You need the right orientation. I’m pulling this figure out of the air, but 90% of people that buy stocks don’t think of them the right way. They think about them as something they hope goes up next week and they think about the market as something they hope goes up and, if it’s down, they feel worse. I feel better.
I think about what a company is going to be worth ten or twenty years from now. And I hope it goes down when I buy it because I’ll buy more.
I’m happier when stocks are going down because I can buy more of them for the same amount of money. If I were a farmer, I’d want farmland to go down so that I could buy more acreage. It just makes sense.
On keeping money in the market:
When I want to do something, I always want to do it big. I put my whole net worth into Cities Service Preferred, $114.75. (Laughs) Since that day, March 11, 1942, I have never had less than 80% of my money in American business. You can call them stocks, but I see them as American business.
When asked about the new Occidental Petroleum stake, Buffett deftly pivoted his answer to focus on Berkshire’s 2019 investment in the Texas-based oil giant:
A couple years ago, we financed Occidental. I got a call on a Friday from Bank of America saying that Occidental was going to need some money to buy Anadarko — I think it was known then that they were in competition from Chevron — and would I meet with them because they needed a lot of money fast.
I said, “Sure, how about tomorrow?”
We went back and forth and it turned out they came out Sunday and we met at 10:00 in my office. I said, “We’ll give you $10 billion under these circumstances, but we’ll do it. We’ll do it tomorrow.”
That’s not Wall Street, but that’s Berkshire.
On the 2008-09 financial crisis — and who was to blame:
It was more than a financial crisis. It was a financial crisis cubed. A lot of people did a lot of things wrong, but there was plenty of it on Wall Street. Plenty of it on Wall Street. But there was plenty of it elsewhere, too.
On the United States of America:
There is no country that’s done what our country has done. If you go back three of my lifetimes, you’re looking at less than 1% of the world’s population — closer to half of 1% — are sitting in this land. They don’t work harder than people in all the rest of the world in terms of hours of unpleasant labor. They don’t come laden with gold. They are half of 1% and they worked the same hours, they’ve got the same IQs, they may be a little self-selected in enterprise in terms of going across oceans and things.
Fast forward a couple of lifetimes and they’ve got 20%+ of all the bounty in the world. That is something that has worked like nothing has worked.
If you had gone to anybody at the Constitutional Convention in 1789, any of the representatives there, and you said, “I want to tell you what this place is going to look like in three more of your lifetimes. Your great-great-grandchildren will be flying in the skies, they’re going to be watching sports all over the world, they’re going to be entertained, medicine…” They’d have hauled you off to a lunatics’ society.
So far, we’ve got the best system. We’ve got a better system than we used to have and we’ll have a better system fifty years from now. I’ve seen 91 years of it and I’ve never seen a period where I didn’t believe that.
On Tesla and Elon Musk:
That shows what America produces. Elon is taking on General Motors and Ford and Toyota — these people who’ve got all this stuff — and he’s got an idea. That’s America. You can’t dream it up. It’s astounding.
On hot topics like inflation, Ukraine, ESG, etc.:
I will be talking about a lot of things on April 30 at our annual meeting. That’s when I’ll be talking to all of our shareholders at the same time. There will be 40,000 in attendance and it will be taken around the world and that’s when every one of my partners can hear at the same time.
I get that time to take all these people who have trusted me with their money, trusted me with their future, and I talk to them at the same time. They can ask questions, they can be impertinent, they can do whatever they want with us, and I love it. And Charlie loves it.
So stay tuned for more sage advice from the Oracle of Omaha at the end of this month!
And, if you’d like to watch the entire Buffett x Rose interview, here’s the link.
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Disclosure: This is not financial advice. I am not a financial advisor. Do your own research before making any investment decisions.