Saturday, May 2, 2009
Just met Becky Quick
My slickness knows no bounds.
EG: Hi I'm Eric
BQ: I'm Becky nice to meet you
EG: (awkward pause) you were great.
BQ: Thanks (beautiful smile)
Random Guy: Becky will you marry me?!?
EG: Hi I'm Eric
BQ: I'm Becky nice to meet you
EG: (awkward pause) you were great.
BQ: Thanks (beautiful smile)
Random Guy: Becky will you marry me?!?
Exhibits
and most booths offer discounts. Apparently no freebies and dry few
discounts this year.
Meeting is over
Awesome experience that I will never forget and hope to make it an annual occurrence. Dad is checking out exhibits where you can buy from brk companies. Next stop omaha airport...
Last ?: What can we do to make the economy better?
Wb - well when I started I said that increasing households would help, so if that puts any thoughts in your head...
Alex (wb nephew) asked his gf to marry him and the crowd erupted.
Alex (wb nephew) asked his gf to marry him and the crowd erupted.
46) Beware of cap intensive because of underestimating depr?
Cap intensive outside utilities scare me. We don't get rich on util but u don't get poor. Your better in non cap intensive business.
Cm - unfortunately a lot of moats have been filling with sand
Cm - unfortunately a lot of moats have been filling with sand
45) Nyt article to buy us equities?
The cheaper the get the more I like it as long as I have a sound rationale for value.
Cm - if stocks drop 40pct then they are cheaper. 73 74 was way better, I knew that was the best time to invest but I didn't have any money.
Wb - if u want something and its fairly valued u should feel good buying it. If it falls the next day be happy u can buy more.
Cm - terribly safe bonds that yld 9pct with good call protection
Cm - if stocks drop 40pct then they are cheaper. 73 74 was way better, I knew that was the best time to invest but I didn't have any money.
Wb - if u want something and its fairly valued u should feel good buying it. If it falls the next day be happy u can buy more.
Cm - terribly safe bonds that yld 9pct with good call protection
The only part of my job I don't like
When you have to decide a manager has aged and they are no longer at the same business age when they were hired. WestCo ceo had alzheimers for a year before wb and cm faced it.
44) How can shareholders effect exec comp?
Had a senator and asked what statue I can enact to make constiutients calm down. There prob isn't. The last time was u could not deduct top 5 exec over a mil. This was the most counterproductive piece of legislation and that's a big stmt. Wb recommended repealing. I have always proposed this, you need top half dozen invest mngrs need to speak out on most aggregious behavior. The way you change a big shot you embarass them. Big investors with press could make real change. You only need 3 or 4 they manage trillions and if the spoke up every once in a while they could cause change.
Its the honor system, shareholder has honor and ceo has system.
Cm - invest mngr don't add much value and pensions and controlled by left wing politicians, sadly I don't see much chnage
Its the honor system, shareholder has honor and ceo has system.
Cm - invest mngr don't add much value and pensions and controlled by left wing politicians, sadly I don't see much chnage
43) Should international holders be concerned about USD?
Wb - I'm not very good about predicting Eur/Usd...
CM - you did pretty good at it
Wb - we did make a few billion, didn't we?
CM - you did pretty good at it
Wb - we did make a few billion, didn't we?
42) Worst case scenario for insurance
Cm - significant catastrophe but I still wouldn't want to own anyone else
Wb - 100b catastrophe wed pay 4pct of that. Worst situation is hyperinflation and ppl expressed outrage and assets begin to be nationalized
Wb - 100b catastrophe wed pay 4pct of that. Worst situation is hyperinflation and ppl expressed outrage and assets begin to be nationalized
41) Compensation incentives
In capital intensive biz it needs to include cap cost component. Incentives are very important. You imply board sets comp, the CEO is an important determinant of their own comp. Ceo pick their own comp committee. Human relation vp reports to ceo and reports to hand selected comp committee. What ceo wants a rational comp when irrational pays better? Entire board should discuss comp not hand selected comp comittee. If you don't get ceo comp right none of the other check the boxes matter.
Cm - a liberally paid board in american co is counterproductive to good mgmt. I raise ur salary u raise mine. I think it woiuld be better if they weren't paid at all.
Wb - you take 100pgs to explain how u pay u got a problem. When board comp matters they are not independent.
Cm - the man has a lot to lose will not be independent. The way we do it is right what everyone else does is silly
Cm - a liberally paid board in american co is counterproductive to good mgmt. I raise ur salary u raise mine. I think it woiuld be better if they weren't paid at all.
Wb - you take 100pgs to explain how u pay u got a problem. When board comp matters they are not independent.
Cm - the man has a lot to lose will not be independent. The way we do it is right what everyone else does is silly
40) Swiss Re was it a mistake?
We take 20pct of PC biz and bought 3pct of common. Then lend 3B convertible bond callable 120 plus 12pct cpn. We feel fine about position in it. Very unlikely we will payout. Transaction was done under a time of diress and I liked the terms. There problems similiar to AIG not on same size.
Cm - if that's a terrible problem I wish we had more of it
Cm - if that's a terrible problem I wish we had more of it
39) What's your view of world economy?
There are always problems in the world, but this is the only one we got so we need to deal with it. This world unlocks human potential. There are 35K ppl here that's 1pct of pop u in 1790. Look how much human potential we have unleashed. We will go threw bumps. We didn't let woman vote, we counted blacks as 3/5 person. Any meeting u can find problems but there are always things to look to that will get better.
As I get closer to death I get more cheerful about the economic future which I will not enjoy. I'm cheerful about electric cars, desanitzation. Its awful to only think about problems, energy is about to be fixed and you need to think about the positives.
As I get closer to death I get more cheerful about the economic future which I will not enjoy. I'm cheerful about electric cars, desanitzation. Its awful to only think about problems, energy is about to be fixed and you need to think about the positives.
38) GE and GS security or good business?
Felt good about business and qlty of mgmt, it was the terms of the deal that made it attractive. Very few could commit that kind of capital that quick in that time. I'm very happy with those deals. I know both ceos very well and I liked the terms.
We have done a lot of biz with GS and it goes back to when I was ten and met head of GS. When we were little they funded us.
We have done a lot of biz with GS and it goes back to when I was ten and met head of GS. When we were little they funded us.
37) Student loan industry collapse
I don't much about it.
Cm - neither do I. There has been a lot of scandal with lenders and univ
Cm - neither do I. There has been a lot of scandal with lenders and univ
34) Would you spin off or sale a business?
No.
Cm - wall st sells that stuff because it generates them fees. No one wins besides bankers.
Cm - wall st sells that stuff because it generates them fees. No one wins besides bankers.
33) what is your view of unions and contracts?
Not big believer in contracts. After we buy co will mngmt still have same passion? No contract will protect against that if they lose their passion, we don't like contracts
Cm - our model is a seamless web of trust that is honored on all sides. Hollywood you have a contract with no trust or honor
Cm - our model is a seamless web of trust that is honored on all sides. Hollywood you have a contract with no trust or honor
32) What do you want to in China? How can they keep dollar value?
We respond to opportunities. Can't own more than 25pct of insurance in China I'm sure we will find more to do there. If you were finance minister of china what would u do cm?
Cm - thays easy I do exactly the same thing. Chinas policy should be admired.
Wb - so ud buy tsy at no yld?
Cm - they can biuy longer dtd. They are the most competitive country and want to stay that way.
Wb - well there's some advice for china, next ?
Cm - thays easy I do exactly the same thing. Chinas policy should be admired.
Wb - so ud buy tsy at no yld?
Cm - they can biuy longer dtd. They are the most competitive country and want to stay that way.
Wb - well there's some advice for china, next ?
31) Past growth has been 20pct growth of BV, with given size what will it be?
That number is impossible. We hope to grow at a rate a few points ahead of SnP.
Cm - with our size the best years are ahead in terms of what we can contribute to society
Cm - with our size the best years are ahead in terms of what we can contribute to society
30) Govt intervention? New rules in the game?
Cm - clear that there will be new rules unclear what they will be. The lobbying from the financial institutions will be awesome. That is offset by govts hatred for wall st. If I had all the power there would be a lot of intervention.
Wb - second time he used run on mm funds as an example of how bad it got. People were concerned about their 4T and they are upset. 90pct tax was uncontrolled fury
Wb - second time he used run on mm funds as an example of how bad it got. People were concerned about their 4T and they are upset. 90pct tax was uncontrolled fury
29) BAC lack of disclosure caused by TSY and Fed? Is this right? If the govt pressured you what would you do?
Wb. - that is an excellent question ill be interested in cm. If ur a priest and someone says I'm going murder my wife this is the type of question. I wonder howd I'd react if bernanke. I understand why paulson and ben would want to but as ceo u have a responsibility to shareholders.
Cm - u can criticize bac for originall ml but once the deal was signed given the state of the national economy I believe they acted honorably
Cm - u can criticize bac for originall ml but once the deal was signed given the state of the national economy I believe they acted honorably
28) When will wind technology show +ROE?
MidAmerica has largest wind capacity in Iowa and we are a next exporter there. Wind cannot be relied on at all times 30pct. Have not increased rates in 10 yrs. Part of gain comes from tax credit. We pay a lot of taxes so we can us the TC.
Cm - in anything that makes sense in utilities we will be the leader
Wb - constellation didn't work out, dave sobel went in with an all cash bid that tues night. Dave called at noon offered firm bid that night.
We bought a co. In 2 hrs. Dyengy. Told regulators let us buy early and we will do whatever u tell us. Don't need to ask lawyers just do it.
Cm - in anything that makes sense in utilities we will be the leader
Wb - constellation didn't work out, dave sobel went in with an all cash bid that tues night. Dave called at noon offered firm bid that night.
We bought a co. In 2 hrs. Dyengy. Told regulators let us buy early and we will do whatever u tell us. Don't need to ask lawyers just do it.
BRK CDS
Since BRK writes European options credit depts are forcing them to buy CDS to protect against money owed by Brk. Something Buffett did not forsee
27) How damaging was losing the Aaa? What are you doing about it?
I don't think they will change it because they won't move that fast. It makes very little diff in our cost of capital, I very much liked having Aaa/AAA. Lost some bragging rights but no one is stronger. Rating agencies don't measue attitudes towards creditors I assure you paying our debts I hold sacred. That's not in the rating.
Cm - at least they showed considerable independence. My assumption is that MDY will raise rating because we r and they are smart.
Wb - charlies says eventually u will see it my way, because your smart and I'm right
Cm - at least they showed considerable independence. My assumption is that MDY will raise rating because we r and they are smart.
Wb - charlies says eventually u will see it my way, because your smart and I'm right
26) View on the dollar
Its hard not to think the dollar will be worth less in the future but everyone is doing big things so its hard to decide which deficit will be greatest. How it plays out in rel fx I don't know. Units of currency will by a lot less, maybe not for a year or two but market could react sooner. You can bet on inflation.
Cm- I remember 2 ct stamp 5 ct burger a little inflation is fine I'm worried about run away
Cm- I remember 2 ct stamp 5 ct burger a little inflation is fine I'm worried about run away
Took a break for lunch
Questioned on BYD as speculative. CM got fired up. Its not speculative its a damn miracle. I have never in my life have been so proud to be part of a business.
How do you analyze falling stocks C BAC irish banks
I was wrong on Irish banks in a big way and I didn't understand there exposure to land development loans. Terrible mistake I was not lied to I just made a mistake. Figures are available but people don't look at them. Wfc amort of core deposits which is an advantage unlike other banks but press didn't pick up on it.
With fred and fan it was pretty obvious, ironically govt was telling them to raise equity. One look at them u realized they were no good.
Cm- there is another problem GAAP allows banks to make bad loans that produce great earnings
Wb- but they are huge black box that produce numbers not cash and can cause huge problems. Financials should be considered too tough for avg investor. Read JPM dimon annual letter
Cm- I have yet to meet an acct from the big firms that says he's ashamed of his prof. Withou shame he's not thinking
With fred and fan it was pretty obvious, ironically govt was telling them to raise equity. One look at them u realized they were no good.
Cm- there is another problem GAAP allows banks to make bad loans that produce great earnings
Wb- but they are huge black box that produce numbers not cash and can cause huge problems. Financials should be considered too tough for avg investor. Read JPM dimon annual letter
Cm- I have yet to meet an acct from the big firms that says he's ashamed of his prof. Withou shame he's not thinking
21) Why not buy shares of co directly? Why not webcast meeting?
I like people come to see what they own, if it were a tv show it wouldn't be the same. They are not buying with free float. Direct purchases
Cm - identify investors who are skilled, follow them and copy. I think you have a very good idea
Cm - identify investors who are skilled, follow them and copy. I think you have a very good idea
11 year old inflation question
First best hedge is your own earning power. Second owning a great business like KO.
Best advice invest in urself.
Cm - the young man should become a brain surgeon and invest in KO and not govt bonds
Best advice invest in urself.
Cm - the young man should become a brain surgeon and invest in KO and not govt bonds
23) Share buybacks would be a buy recommend. You have criticized others who don't do buy backs.
I haven't been saying that in the past ten yrs. They have been paying too much and giving buy recommendations. 70 and 80s we urged it. We did it in 2000 because they were so low but it becomes self defeating.
He has made two remarks that S FL is in awful shape even when asked about CA.
He has made two remarks that S FL is in awful shape even when asked about CA.
24) Opportunity cost decisions of 2008
When things are moving fast price and intrinsic value its tougher, can be more profitable.
Gates is falling asleep
We got lots of calls and a lot we ignored but it helped calibrate. GS deal
Gates is falling asleep
We got lots of calls and a lot we ignored but it helped calibrate. GS deal
22) Newspaper biz?
We each read 5 a day but do not jusdge consumer pref by what we do. This downturn did not cause problem, 20-30 yrs ago they always won. They had essentiality and pricing power. They lost essentiality. I do not see erosion ending. As long as we don't see unending losses or labor issues we will not sell.
Cm - its a natl tradgedy, these papers were a part of our society and they kept govt more honest. But this is life
Cm - its a natl tradgedy, these papers were a part of our society and they kept govt more honest. But this is life
20) Is buy and hold wrong?
We want to hold but will sell if you plan to lose money into futue or labo issues. When in doubt don't sell.
What would you do diff if you and your family owned 100pct? CEOs tell me all the time at Brk there is no difference.
What would you do diff if you and your family owned 100pct? CEOs tell me all the time at Brk there is no difference.
1Q2009 Results
Operating Earn at 1.7B vs 1.9B last year
Lucky to be in insurance and utilitie biz
Insurance profit higher than last year
Float increase several billions from SwissRe
One time expense
Final payment on options closed on midamerixa
BV down 6pct
Mark to market loss on HY cds expect to lost
22.7 b in cash next day 19.7 b
Expect same for rest of year, insurance and utility good all else losing money from recession
1B of earnings stays at utility
10Q next Friday
Lucky to be in insurance and utilitie biz
Insurance profit higher than last year
Float increase several billions from SwissRe
One time expense
Final payment on options closed on midamerixa
BV down 6pct
Mark to market loss on HY cds expect to lost
22.7 b in cash next day 19.7 b
Expect same for rest of year, insurance and utility good all else losing money from recession
1B of earnings stays at utility
10Q next Friday
19) you and charlie are the biz model? Would you invest in brk?
We have an unusual group of shareholders. 20 pct turnover vs 100 pct SnP. We have an unusual model to help co that want to run their biz. Its not me and charlie its our culture. Adv are not do to us its our culture. People will want to join with us.
Cm - a lot of corps in america a run stupidly. Headqtrs force subs to come up woth QoQ profits is stupid. We won't be here forever, ill be but I'm worried about WB
Cm - a lot of corps in america a run stupidly. Headqtrs force subs to come up woth QoQ profits is stupid. We won't be here forever, ill be but I'm worried about WB
18) If you started a smaller fund what would you do?
Own half dozen stocks and it has nothing to do with cost basis. We don't worry if its up or down what's it worth v what's it trading for.
Cm - he tactfully said you should reconsider your way of thinking
Cm - he tactfully said you should reconsider your way of thinking
17) Stress tests next week. Should pref and debt take losses?
Institution specific. Fnm and freddie pref got wiped out. Usbank and wells have plenty of equity so it should not go up to pref and debt. If a co. Has lots of earnings debt should not feel pain. I'd love to buy all of wells and usb but I can't I'd be bank hold co. Auto totally different.
16) What would BG say about deriv?
Similair to what I would say. They can cause many problems but if they were mispriced hed buy them assuming he trusted his counterparty. You are not suppose to borrow more than 50 pct of securities. Derivatives turned it into a joke it is a way around markets. Total return swaps allows for 100 pct. Trade settlements got pushed out. Securities markets demands 3 days for a reason. The Great Crash - Galbrath.
CM - deeper problem in derivative, this is a dirty business. Dealers are selling this to their clients. We don't need more we need less.
CM - deeper problem in derivative, this is a dirty business. Dealers are selling this to their clients. We don't need more we need less.
15) How can you compete with bad co.'s that get govt funds?
WB - we r at a huge disadvantge, most apparent at Clayton Homes. That is a real problen for us, we r coming up with various ways to deal. We use debt in utilities and financing at Clayton. We don't have an answer for going head to head with govt sponsored.
CM - funding disadvantage but we r not regulated - I'd prefer to deal with the disadvntg
CM - funding disadvantage but we r not regulated - I'd prefer to deal with the disadvntg
14) Stimulus package should go to hard assets like infrastrucutre?
CM - let me answer that one, YES!
13) Dividends, quoted rule 9 of owners manual?
Every retained earning dollar is worth more than one today
CM - I don't get excited about these oddball things that happen every 50 years. I think WFC comes out way stronger.
WB - when WFC ticked below 9 I told a class I'd put my whole net worth in it. Unless they have to issue a lot of shares they will be in a better position. Leverage is what causes problems in this world allows someone else to pull rug from you. Emotions can pull the rug from yourself. Go back and read chp 8 of II.
CM - I don't get excited about these oddball things that happen every 50 years. I think WFC comes out way stronger.
WB - when WFC ticked below 9 I told a class I'd put my whole net worth in it. Unless they have to issue a lot of shares they will be in a better position. Leverage is what causes problems in this world allows someone else to pull rug from you. Emotions can pull the rug from yourself. Go back and read chp 8 of II.
12) How do you value BRK? Investment down 13 pct earnings down 4 stock down 3w pct
You put your finger on it. Back out insurnace because goal is BE and get float. Sum of two parts; securities and earnings power. If you look at it brk was cheap to its intrinsic but so were many companies.
CM - last year was a bad year for a float business but long term float business will do well.
CM - last year was a bad year for a float business but long term float business will do well.
11) Is there a succession plan for Ajit?
Impossible to replace Ajit. We would not give the same authority. The authority does not go to the position it goes to the person. In insurance business be careful who you give your pen to. I enjoy talking to Ajit, he cannot be replaced.
CM - in regards to moron run a biz, we don't look for poorly mismanaged co.
CM - in regards to moron run a biz, we don't look for poorly mismanaged co.
10) Explain value investing
49 universities came this year to Omaha.
If I taught business school there would only be two course:
How to value a business
How to think about markets
You don't need to value all of them, stay in circle of competence. Market is there serve you not destruct you. you do not need to be genius, in fact it can hurt. You need emotional stability and you need an inner piece with the ability to think for yourself. Its not a complicated game, its simple its not easy. You don't need higher math you don't need law.
CM - your emotional make up is more important than you skill. If you think you havw 160 IQ and you really have a 150 you will be a disaster. I'd prefer a 130 who works within his means.
If I taught business school there would only be two course:
How to value a business
How to think about markets
You don't need to value all of them, stay in circle of competence. Market is there serve you not destruct you. you do not need to be genius, in fact it can hurt. You need emotional stability and you need an inner piece with the ability to think for yourself. Its not a complicated game, its simple its not easy. You don't need higher math you don't need law.
CM - your emotional make up is more important than you skill. If you think you havw 160 IQ and you really have a 150 you will be a disaster. I'd prefer a 130 who works within his means.
9) 3 CEO candidates, why not bring him in now?
The guy who questioned is Warrens old partner of 30 yrs. They are running companies, to come to headquarters and sit around and say I'm thinking about this what do you think. That is a waste of time. They are ready for the job. They will need to develop relatoonships with sharehilders and future sellers of companies. Biggest challenge is to learn traits of all ceos that brk.
CM - u r better trained by running a sub then sitting around parent and watch someone else do it. U don't just create ceos in a hot house.
CM - u r better trained by running a sub then sitting around parent and watch someone else do it. U don't just create ceos in a hot house.
8) Nationalize healthcare and effect on your port?
CM - we will look more like Europe. Although I'm a Republican I'm not horrified by the idea. Personally I'd hope they would put it off a year until economic issues are resolved.
7) The four succession candidates. What were their performance numbers in 2008? Are all 4 on the list
WB - we have 3 candidates, all internal for CEO. 4 candidates for investment managers inside/outside. The 4 did no better than match the SnP last year.
CM - practically every investor I respect got creamed last year
WB - there 10yr has been very impressive. List has not changed. If I drop dead they need a new CEO tom, but investment managers can take time.
CM - we wouldn't want a manager who could went to all cash. We would exclude them. Not dumb enough for us.
CM - practically every investor I respect got creamed last year
WB - there 10yr has been very impressive. List has not changed. If I drop dead they need a new CEO tom, but investment managers can take time.
CM - we wouldn't want a manager who could went to all cash. We would exclude them. Not dumb enough for us.
6)Where is RE going? What do you think of CA?
WB - we don't predict real estate prices, I have no idea. But I do think there is value and there has been a pick up in activity. In CA res real estate we are seeing some stability in lower price levels.
We create 1.3mm households a year. And you create 2Mm housing starts a year you have a problem. So we have 1.5 too much. Now we r creating 500k so we will eat up excess inventory it will take a couple years.
We got a few choices. We can blow some up, if that's the case, hopefully urs not mine. We could create new households with 14 yrs old but that's prob not the best idea. So we have to wait.
CM - if I were your with good credit and lived in Omaha I'd buy a house tomorrow.
WB - we own largest re broker in Omaha
We create 1.3mm households a year. And you create 2Mm housing starts a year you have a problem. So we have 1.5 too much. Now we r creating 500k so we will eat up excess inventory it will take a couple years.
We got a few choices. We can blow some up, if that's the case, hopefully urs not mine. We could create new households with 14 yrs old but that's prob not the best idea. So we have to wait.
CM - if I were your with good credit and lived in Omaha I'd buy a house tomorrow.
WB - we own largest re broker in Omaha
5) 300 of 5000 submitted questions was about MDYs. Why do you retain your holdings? Why don't you use ur power to change them?
WB - 5 years ago many people thought housing prices couldn't fall. People levered up on the biggest assets they own 20T in housing of 50T total assets.
MDY made a huge mistake, the public made same so did Congress.
We don't call companies and tell them what to do and our luck in changing behavior is low. If you buy stock you better not assume you can change it.
In regards to selling, it's a business that has a small amount of people and effects the capital mkts. They are under fire but fundamentally they are good business models.
We don't pay attention to ratings. We do not believe in outsoucing investment decisions. If they are off we can make better assumptions.
CM - for a man with a hammer everything looks like a nail. They seeked out inputs to make fancy models work.
WB - one answer u can never give at brk is everyone else is doing it. That's unacceptable. We were very unsuccessful at Solomon. We tried to stop doing biz with Mark Rich and they wouldn't let us. U remember CM?
CM - I certainly do
MDY made a huge mistake, the public made same so did Congress.
We don't call companies and tell them what to do and our luck in changing behavior is low. If you buy stock you better not assume you can change it.
In regards to selling, it's a business that has a small amount of people and effects the capital mkts. They are under fire but fundamentally they are good business models.
We don't pay attention to ratings. We do not believe in outsoucing investment decisions. If they are off we can make better assumptions.
CM - for a man with a hammer everything looks like a nail. They seeked out inputs to make fancy models work.
WB - one answer u can never give at brk is everyone else is doing it. That's unacceptable. We were very unsuccessful at Solomon. We tried to stop doing biz with Mark Rich and they wouldn't let us. U remember CM?
CM - I certainly do
4) How do you a DCF without computers? How to value KO?
WB - all investing is lay out cash and hope you get more back. You get Phd now and a bird in the hand is worth two in the bush doesn't impress ladies. If you need a computer or calculator you shouldn't invest in it. It should be obvious to you and then we act.
CM - the worst businesses I have ever seen use elaborate figures. Trouble is you believe it. They do that in business schools because well... they need to do something
WB - false precision based on std dec is totally crazy and it only happens to people with high IQs because you learned all this stuff and feel you have to use it. A terrible mistake to think higher math will help you in investing.
CM - the worst businesses I have ever seen use elaborate figures. Trouble is you believe it. They do that in business schools because well... they need to do something
WB - false precision based on std dec is totally crazy and it only happens to people with high IQs because you learned all this stuff and feel you have to use it. A terrible mistake to think higher math will help you in investing.
Buffett just walked into audience
With no fanfare Buffett walked into audience and sat down in middle of crowd to get better view of movie which starts now.
Buffett answering ?s
Warren started off talking about how negative yields demonstrate how much panic existed in the market. Never uses slides but showed a trade ticket where he sold TSY at negative yield.
Carol Loomis from Fortune
Becky Quick from CNBC
Andrew Ross Sorkin from NYT
Carol Loomis from Fortune
Becky Quick from CNBC
Andrew Ross Sorkin from NYT
1) Derivatives are WMD, why do you participate in them? Will you add?
Our deriv do not take much of our capital. Mark to market risk
Received 4.9B premiums avg life 15 to 20 years, most are selling equity put options
Expects to lost on HY CDS he wrote, bakruptcies will be higher than he expected
Eric - this issue addresses writing puts on several equity indices. BRK are European style, they cannot be settled until maturity.
Received 4.9B premiums avg life 15 to 20 years, most are selling equity put options
Expects to lost on HY CDS he wrote, bakruptcies will be higher than he expected
Eric - this issue addresses writing puts on several equity indices. BRK are European style, they cannot be settled until maturity.
Is there a problem with how we educate children on financial literacy?
I think our generation has a problem with financial literacy.
People will do foolish things with money. I was 21 when I got married, I stopped by Flamingo and I saw very well dressed people travel all this way to take part in a mathematical equation that will always have expected return of less than 0. That's a world of opportunity.
CM - I don't think you can teach high finance to someone who cannot understand how to use a credit card.
WB - someone who doesn't understand credit cards prob won't get equity put options
People will do foolish things with money. I was 21 when I got married, I stopped by Flamingo and I saw very well dressed people travel all this way to take part in a mathematical equation that will always have expected return of less than 0. That's a world of opportunity.
CM - I don't think you can teach high finance to someone who cannot understand how to use a credit card.
WB - someone who doesn't understand credit cards prob won't get equity put options
3) Wells Fargo and Tarp. CM do you agree w WFC? WB do you agree with CM?
WB - yes
CM - earnings should not go up as credit as destroyed. I am like the men at WfC I speak bluntly. Accounting that let's you realize a gain because you buy your debt back at cheap level because your credit was destroyed is accounting insanity. People who approved that rule should be removed.
CM - earnings should not go up as credit as destroyed. I am like the men at WfC I speak bluntly. Accounting that let's you realize a gain because you buy your debt back at cheap level because your credit was destroyed is accounting insanity. People who approved that rule should be removed.
Other shareholders
So far I have had a full conversation with 5 people. 3 work for hedge
funds, 1 started his own hedge fund and one worked for a reinsurer.
Group next to me is discussing the challenges of raising capital after
your fund tanks. Start with a new name haha Mood is very cool, besides
the hedgies people are discussing most recent GDP #, China and if this
rally is for real. 25,000 investors this is crazy.
funds, 1 started his own hedge fund and one worked for a reinsurer.
Group next to me is discussing the challenges of raising capital after
your fund tanks. Start with a new name haha Mood is very cool, besides
the hedgies people are discussing most recent GDP #, China and if this
rally is for real. 25,000 investors this is crazy.
--
Sent from my iPhone
Eric Golden
Joke of the Day
If you want a better seat in front of you...
Just cough
--
Sent from my iPhone
Eric Golden
Breakfast of Champions
After you get your seats, the next line forms which is the line for
free breakfast. It was almost as long as the line to get in haha.
People at still just arriving. Instead of waiting in line I opted for
the Beef Gyro with hot sauce, beats steak and eggs!
free breakfast. It was almost as long as the line to get in haha.
People at still just arriving. Instead of waiting in line I opted for
the Beef Gyro with hot sauce, beats steak and eggs!
--
Sent from my iPhone
Eric Golden
Thank you for the comments
I cannot seem to respond to them but I can read them.
Thank you
--
Sent from my iPhone
Eric Golden
When you don't know, follow the fast people
monitors that stop you if you start running. If you were looking at
stage I am left second row balcony. I am sitting with people that have
been to 5+ of these so I'm pumped about the seats. Most people rush to
floor but since people reserve so many seats you can get stuck in the
back or worse have to go back to upper deck. People im my area like
these because you can see Warren and Charlie, they will sit center
stage (left in this pic) then to their right will be Becky Quick,
Andrew Ross Sorkin and one other reporter from Fortune, I forget her
name. People love these seats because all those blue chair in the
front are for the Board of Directors so you can see Bill and Melinda
Gates, the Buffett family and Keough to name a few. Wicked excited!
8 minutes to the "foot race"
My heart is racing like a 5k this is hilarious
--
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Eric Golden
Wells Fargo
Wells Fargo stage coach just arrived and I can't see but they are
reenacting a hold up, shooting blanks that definitely woke people up.
reenacting a hold up, shooting blanks that definitely woke people up.
--
Sent from my iPhone
Eric Golden
Waiting in line
Arrived at Qwest Cente at 5:45. Security checked our bags. The line
started at 3:00 an we are probably less than 100ft from the front
door. Qwest Center cost $300mm and has no professonal sports teams,
I'm mo Buffett (just yet) but that does not seem like a great business
model. They are serving free coffee and selling lunch vouchers. People
in front of me look like they are in 70-80s and they are talking about
the shadow banking system. Cab driver said when the market tanks is
when this event draws the most people.
After
ice cream. I'm am definitely going to wake up at 4am and hit the gym
before the meeting haha
Placed the order
And apparently he gets Italian dressing on his salad, well thats what
Flo our waitress told us.
Friday, May 1, 2009
We have arrived...
The crowd is quite eclectic from cowboys to suits. Everyone is very
nice and the mood feels like a concert or sporting event. A lot of
people are already wearing their investor credentials.
Gorat's Take 2
Just landed and while we taxied I called Gorat's one last time and we
got it! Reservation for Golden party of 2 at 9:30. Waiting for taxi
outside Omaha Airport.
got it! Reservation for Golden party of 2 at 9:30. Waiting for taxi
outside Omaha Airport.
--
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Eric Golden
Gorat's
Just called Gorat's Steakhouse. This is Buffett's favorite joint. I am
hoping with swine flu and economy maybe someone will cancel their late
dinner reservations they needed to book a month in advance. Hopefully
we can get in but either way tonight I'm ordering Buffett's usual at
Gorat's: T-bone steak with Cherry Coca Cola.
hoping with swine flu and economy maybe someone will cancel their late
dinner reservations they needed to book a month in advance. Hopefully
we can get in but either way tonight I'm ordering Buffett's usual at
Gorat's: T-bone steak with Cherry Coca Cola.
--
Sent from my iPhone
Eric Golden
Counting Crows - Omaha (live)
Just landed in O'Hare. Way more people wearing masks but this is a
larger airport. Since I have nothing on Buffett yet here is a great
song:
larger airport. Since I have nothing on Buffett yet here is a great
song:
http://www.youtube.com/watch?v=R5iKxgA134M
--
Sent from my iPhone
Eric Golden
Logan Airport
Sitting in Logan and I have only seen one person wearing a mask
besides myself. Just kidding. Airport does not seem empty, San Fran
flight just took off and it is full. I did notice Hudson News appears
low on Purell, thankfully my sister got me a travel bottle before we
left.
besides myself. Just kidding. Airport does not seem empty, San Fran
flight just took off and it is full. I did notice Hudson News appears
low on Purell, thankfully my sister got me a travel bottle before we
left.
--
Sent from my iPhone
Eric Golden
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