Warren Buffett | Lecture | Georgetown University | September 19, 2013 | Summary and Q&A

Transcript

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Summary

This video features a conversation between Warren Buffett and Brian Moynihan at Georgetown University. They discuss various topics such as philanthropy, investing strategies, the economy, and the future of America. Buffett talks about his investment in GEICO and how he believes in finding opportunities when stocks are selling at cheap prices. He also shares his optimism for the future of America and emphasizes the importance of everyone participating in the country's prosperity.

Questions & Answers

Q: Can you share a memorable investment experience?

One of my most memorable investments was in GEICO. I first got exposed to it in 1950 when I met Ben Graham, the chairman of the company. Several years later, in 1976, GEICO was in trouble and I bought a third of the company in the market. In 1995, I bought the rest of the company. It has been a great investment and a wonderful partnership with the people at GEICO.

Q: How did you come up with the idea for the Giving Pledge and why did you choose Bill and Melinda Gates as partners?

The idea for the Giving Pledge came about when Bill and I were discussing philanthropy. We decided to call David Rockefeller and ask if he would host a dinner for some influential people to talk about philanthropy. The values at the core of the work we examined were defining characteristics of the tradition that animates our university community. Bill and I believed in the principle that every human life has equal value, and we wanted to inspire other wealthy individuals to donate at least 50% of their net worth to philanthropy. We chose Bill and Melinda Gates as partners because of their deep commitment to philanthropy and their global reach through the Bill and Melinda Gates Foundation.

Q: How do you see the current state of the economy and its impact on businesses and individuals?

The economy has come back from the panic in 2008, thanks to the efforts of people like Ben Bernanke, Hank Paulson, and Tim Geithner. However, there is still a significant inequality in our society. While businesses are doing well and having record profits, many individuals are not experiencing the same level of prosperity. The median income has not changed in real purchasing power since 1989, and the gap between the rich and the poor is widening. We need to ensure that everyone has the opportunity to share in the country's prosperity.

Q: What are the lessons you have learned from the past economic cycles?

One of the lessons is that people tend to make the same mistakes over and over again. When they get greedy, they make bad investment decisions, and when they get scared, they all want to sell at once. It's important to have the right temperament and to ignore what other people are saying. Stocks often sell at silly prices, and if you have the right philosophy and approach to investing, you can find opportunities during times of panic or recession.

Q: What makes you optimistic about the future of America?

America has come a long way in just a few hundred years. From having less than four million people at the time of its founding to becoming the world's largest economy, the country has shown tremendous growth and potential. Despite the periodic recessions and challenges, the market system works, and America has a history of resilience and progress. The key is to ensure that everyone has the opportunity to participate in the country's prosperity and to create a society where nobody gets left too far behind.

Q: Can you share your investment strategy and any advice for young investors?

My investment strategy is based on finding opportunities when stocks are cheap. I follow the principles of Benjamin Graham, who emphasized the importance of having the right framework and temperament. You don't need a high IQ to be a successful investor, but you need the right mindset and the ability to ignore market noise. Stocks often sell at silly prices, and if you have the patience and discipline to wait for those opportunities, you can make successful investments. It's also important to have a long-term perspective and to focus on the fundamentals of businesses.

Q: Are you planning to invest in Brazil?

I don't know where I will invest next. As an investor, I enjoy the uncertainty and the challenge of finding new opportunities. I have invested in various countries in the past, such as China, South Korea, and Israel. I partnered with 3G Capital and Joshua Lemon from Brazil for the Heinz deal, but I cannot say if my next investment will be in Brazil. The beauty of investing is that you never know what tomorrow holds, and that's what makes it interesting.

Takeaways

Warren Buffett believes in finding opportunities when stocks are selling at cheap prices and taking a long-term approach to investment. He emphasizes the importance of having the right mindset and temperament and being able to ignore market noise. Despite periodic recessions and challenges, Buffett remains optimistic about the future of America and its potential for growth. However, he also recognizes the need for everyone to participate in the country's prosperity and for society to ensure that nobody gets left too far behind.