Warren Buffett | Charlie Rose | Pt. 2 | July 11, 2006 | Summary and Q&A

Summary

This video is a compilation of interviews with Warren Buffett from various years. He discusses a wide range of topics, including his annual shareholders meeting, his views on various companies, his investments in Coca-Cola and Geico, and his approach to finding new investments.

Questions & Answers

Q: What do people most want to hear at the annual Berkshire Hathaway shareholders meeting?

Buffett mentions that people want to hear about governance issues, but ultimately he will be talking about what shareholders want to discuss. The meeting serves as a kind of weather vane to gauge shareholders' concerns.

Q: What is Warren Buffett's view on PetroChina?

Buffett commends PetroChina as having a smart and high-quality board of directors. He values their expertise and considers them the best board in the country. Buffett also expresses his trust in them as decision-makers to handle the management of his foundation after his passing.

Q: How does Warren Buffett evaluate the independence of board members?

Buffett believes that true independence goes beyond just receiving income from board memberships. He questions whether those who heavily rely on board fees can truly be independent in their decision-making. In his opinion, it is the quality and business acumen of board members that matter the most.

Q: What is the correct system for selecting corporate directors?

According to Buffett, the right criteria for selecting corporate directors is their willingness to make tough decisions and their readiness to leave the office at any time. He believes that true independence comes from having an identity outside of the corporate directorship and not being solely reliant on the government's salary or board fees.

Q: How does Warren Buffett feel about the deficit in Social Security?

Buffett finds it nonsensical that people worry about the deficit in Social Security 25 years from now when there is a much larger deficit in the present. He views it as putting unnecessary emphasis on a future problem while ignoring the current issues.

Q: Does Warren Buffett believe Republicans are in agreement about Social Security?

Buffett explains that within Berkshire Hathaway, the Republican chairman feels even more strongly than Buffett does that Republicans are making a mistake by focusing on the Social Security issue. He points out that even within the same party, there can be disagreement.

Q: How did Warren Buffett get started with Berkshire Hathaway?

Buffett initially wanted to continue managing his partnership, but due to market conditions, he realized he was better off incorporating his investments into a separate entity like Berkshire Hathaway. He stumbled onto this partnership through family members who wanted him to handle their investments.

Q: What was Warren Buffett's ambition when he returned to Omaha after working with Ben Graham?

When Buffett returned to Omaha, he didn't have a specific ambition in mind. He had a modest outlook, thinking that he could earn 10% on his $150,000 investment and live comfortably on the returns. He considered going to law school and was interested in reading and gaining knowledge.

Q: How did Warren Buffett's involvement with textiles shape his investment decisions?

Buffett initially believed he was a textile expert, but he quickly realized the limitations of the industry. He then shifted his focus to buying other businesses and diversifying his investments. He acknowledges that staying in the textile business for 20 years was a financial mistake and wishes he had focused on other opportunities sooner.

Q: Why did Warren Buffett buy The Washington Post in 1973?

Buffett bought shares of The Washington Post because he believed in the value of the company's assets. He saw the potential in the newspaper, newsweek, and the network television stations it owned, all of which he thought had significant value. He recognized the disconnect between the company's assets and its stock price, and he took advantage of the opportunity.

Q: What was Warren Buffett's reasoning behind buying Coca-Cola?

Buffett bought Coca-Cola shares because he believed the company had a durable competitive advantage and a strong management team. He recognized the potential for long-term growth and saw that Coca-Cola had a dominant position in the industry. He was not influenced by his views on the economy but rather focused on the qualities of the business.

Q: How does Warren Buffett approach finding new investments?

Buffett does not actively search for companies to invest in. He lets his interest be known but waits for companies to approach him when they are ready to sell. He looks for businesses that have consistent earnings, simple operations, and trustworthy management. He emphasizes the importance of understanding the business and seeking out enduring competitive advantages.