Warren Buffett – Iconic Voices For Our Time

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Warren Buffett - Iconic Voices For Our Time

0:26when I was in high school I bought in any class that would required and in
0:30college and I finally signed up for a day on Carnegie course when I got out of
0:34school I realized I had to talk to people and I spent 200 bucks I got this
0:38little diploma I proposed to my wife during the during the term of the course
0:44so I really got my money's worth there but in terms of public speaking I really
0:48had to force myself on that in terms of talking privately they couldn't stop me
0:52from the moment I started school I think I have always liked to talk how do you
0:58keep up with all the media and information that goes on in our crazy
1:03world in your world of Berkshire Hathaway what's your media routine I
1:06just read read and read i probably read five to six hours a day I don't read as
1:10fast now is as when I was younger but I read five daily newspapers I read a fair
1:15number of magazines I read 10 case I read at your reports and I read a lot of
1:20other things to us I have always enjoyed reading i love reading biographies for
1:24example to process information very quickly how I have some filters in my
1:29mind so if somebody calls me about an investment in the business or an
1:33investment in securities I usually know until three minutes whether I have an
1:38interest and I don't I don't waste any time with the ones I don't which I don't
1:41have an interest
1:43when I think about your world three hundred and thirty thousand people who
1:47are employees of Berkshire Hathaway or its subsidiaries how do you send the
1:51message that they are being scrutinized under the microscope by the media at all
1:54times well i send a message to their managers at those 330,000 people work
1:58for maybe 70 or so
2:01CEO's an intern work for me so i my job is to have those 7770 CEO's sending out
2:07the right message so every two years running a very simple letters a page and
2:11a half I don't believe in two hundred page manuals because they put out of two
2:14hundred page manual everybody's looking for a little balls basically but page
2:19and a half
2:20very hard for him to argue about what I'm talking about so I tell them you
2:24know that my reputation Berkshire's reputation is in their hands and not
2:28only and we've got all the money we need more money we got all the money we need
2:32we don't have an answer reputation beyond what we need and we can't afford
2:37to lose it so we never will trade reputation away from money and and
2:42they're the ones that are the guardians of that and that I want them to not only
2:46do what's legal obviously I want them to judge every action by how it would
2:54appear on the front page of their local paper written by a smart semi unfriendly
2:59reporter and i were really understood to be read by their family their neighbors
3:04and their friends and has to pass that test as well and I tell him I don't want
3:08anything around the lines at all there's plenty of money to be made in the center
3:11of the court and I may be for my eyes aren't together anymore ok quite see the
3:15lines that well so just keep it in the center of the court and if they have any
3:18questions call me
3:21what advice do you have for a CEO who is on the media hot seat because of a
3:25similar situation well as a couple pieces of advice on that person is that
3:29when you find out a bad news bad news correct that and if it's necessary to
3:33report them to authorities reported immediately the big problem with Solomon
3:36was not met a fellow named moser did which was defined the US government not
3:41ever a very good idea but that could have been handled but he reported he
3:46didn't reporter John Meriwether is supervisor picked up on it and late
3:51April 1991 and went to the president and the chairman and chief legal counsel of
3:57Solomon and said here's what this fellow Moser has been doing and they all agreed
4:03it was wrong they all agreed with reportable to the Federal Reserve
4:06promptly at an unfortunate nobody did anything and then in the middle of May
4:11mosier went out and did it again and now you got a terrible problem because you
4:14know the guy was a bad actor few weeks earlier and it hadn't reported it and
4:19the compound of there and then you're in a real pickle so when you find bad news
4:26I get it right in a fast get out get it over and get it right is important but
4:32when I questioned the Moser done it there but they get it fast and get out
4:36they missed on and so deal with bad you're going to get bad news I mean I
4:41got 330,000 people I mean I I will guarantee you that probably dozens of
4:47them are doing something wrong right now I just hope I find out about early and
4:51the person below me find out and let me know if it's bad enough that they stop
4:55it so you can have a study of 330,000 without an occasional quite so it's
5:03gonna happen and you've got to do something about it fast when it does
5:07happen
5:08the biggest sin and journalism that I see I think incident I think I probably
5:12as a CEO have spent more time talking to journalists that perhaps the country
5:18partly that's good I may be four but partly because I like you target
5:21journalists do what the greatest sin they commit
5:26you've got to start the story with the hypothesis I mean you're looking into
5:29something because you have a working hypothesis but you have to give up that
5:33hypothesis of it turns out not to be correct or that orbit misleading in a
5:37major way so I always worry about the journalistic calls me they've decided
5:43what stories they're working on a older looking for us confirmatory evidence so
5:47I call it quote shopping tho talked to be four forty-five minutes hoping to get
5:50one quote that confirms our story and ignoring the other 43 minutes when I
5:54told them things that should limit the story so it's it's very natural you know
6:00you get time invested in that you got this working hypothesis and once you've
6:04invested a lot of hours and your editor know you've invested a lot of hours
6:07maybe it was the editors i working hypothesis to start with that and now
6:11you're yeah you gotta go back and tell him I mean there's there's a lot of
6:15there's a lot of momentum toward a bad story a lot of momentum toward a good
6:21story do but but you have to ask you have to be able to writer to say my
6:27hypothesis no longer correct and all it was was a hypothesis that's no sin to
6:31say that but it's hard to do
6:34my first diversity training in GU was in the mid-eighties Simon almost my
6:39thirtieth year and being trained how to run a meritocracy how to be open how to
6:46encourage an open workplace there's no excuse of four people of my generation
6:49not to be open to no matter where you came from
6:54no matter what you've done if you can bring it if you're if you've got married
6:58if you're winning you're gonna get promoted
7:01looking back with you became CEO in 2001 would've been the most unexpected
7:06hurdles so you know Jesse it's funny I it's been almost 14 years to the day and
7:12we had the anniversary of 911 last week you know so it always makes me
7:16thoughtful I think the world if I had to pick one you know we've come out of this
7:21time period of really geopolitical peaceful us' was the center of the
7:27economic world we really hadn't seen a meaningful recession since 1990 and
7:33things like that so I think the bigger surprise just been the world has just
7:38been twisted from one of relative I would say you know benign growth to one
7:44of just a high volatility hi geopolitical risks things like that and
7:49so in many ways the environment today is nothing like what it was like when I
7:53thought it would be when I became CEO
7:56we want to stay relevant today the second thing I would say is I'm I'm
8:01blown away by companies like Google you know Google's I think twelve years old I
8:08am completely impressed with what they've done in 12 years but the third
8:12thing I say is look we matter we're not going away we're paranoid we're
8:18investing with changing were relevant to our customers and the industries that we
8:23serve and so I I always think these you know we don't want to be Microsoft we
8:28don't want to be Google but we're inspired by them were we we we we we we
8:34want to be better because of them
8:37look I've done this now fourteen years it's a hard job in other words anybody
8:43that sits there and says they think these jobs are you see these are hard
8:47jobs you have to learn every day I think I think what's what I love about our
8:52company and what I try to match myself is just resiliency that there's this
8:59sense that were never as good as we want to be were never as good as we can be
9:04and that no matter what happens we can keep getting better so I i think i think
9:10what I would say we've accomplished is we've done all these changes in a very
9:16unforgiving with almost no talent right so we've been able to change the
9:20portfolio grow earnings do things like that and it has three recessions you
9:26know political unrest and and and and things like that you know i i was i was
9:32having lunch today with political candidates running for president and you
9:40know we don't really don't think today as a company about government doing tax
9:47reform or immigration reform or great things we we are more worried about the
9:52government shutting down and two weeks that's something that my predecessors
9:56didn't have to grapple with great in terms of where the world is so in a very
10:02volatile world we've stayed focused on you know kind of what we thought we
10:07could be accountable to you know our customers are investors need each other
10:12and and I think that's made us a better company
10:15we've got a great creative people that work for GE and we turn them loose on on
10:21social media and allow them to create their own stories one of things I
10:26reviewed this morning is on National Geographic Channel Ron Howard and Brian
10:31glacier doing a six-episode story of technology and science that has
10:37world-class directors from Hollywood for producing shows on the brain
10:42the future of energy and GE scientists are a part of that so I think we're into
10:48the the things that interest people and and we're willing to experiment in new
10:55ways of storytelling with the talent we haven't said the company and I think
11:00that combination I don't know if it makes us over twenty year old daughter
11:04she might disagree with the notion of a clever mix as well of it would probably
11:09even more important
11:11when you are in a country like Indonesia how much do you have to think about
11:16profit versus how much do you have to think about the indigenous peoples and
11:21where do you draw the line is not aligned you it is really not only
11:27because we can't create value for our shareholders unless we operate ethically
11:35that means complying with the laws in the countries where we operate in laws
11:43like the Foreign Corrupt Practices Act and UE securities laws and if we are not
11:50responsible to the environment are the local people are the government's where
11:56we operate or were forced we all make him a process and so it is not a
12:05question of a or b to create shareholder value in our business we have to act
12:16responsibly
12:18how do you manage through a foreign government to do the right thing you
12:23know we have this transition in the developed world that we're going through
12:29you probably can put a pin point about 1961 and colonialism started dying out
12:42and performed many governments dictators and so for and now there's this
12:58transition of those types of governments to democracies and many places you find
13:07a mature democracies different countries have different views about ethical
13:15issues and we do call option here you know government officials participating
13:24in business and so are challenges we can we can go through a strategic analysis
13:33say we want to operate in a particular kind of country because that's a good
13:37country operating we have to go find resources and go where those resources
13:42are and see if we can enter into a relationship with the host government
13:49virtually everywhere in the world outside the United States government's
13:54own resources you know here in the USA government on certain resources but
13:59private property owners own resources and so to get the right operate we have
14:05to negotiate arrangements with central governments and then we're located as
14:12you pointed out also in places where their indigenous people and their
14:19relationships friends
14:21indigenous people or or or are strained what we've learned is that while we have
14:30to adhere to the laws and the terms of our arrangements with host governments
14:35we can turn a blind eye to the local communities
14:40the current stoppages a relatively small group of popcorn workers who actually
14:48are protesting the fact that management didn't penalize so earlier strikers that
14:56we had last fall and so they are protesting the actions of certain other
15:04parts of the work force and the fact that we didn't disclose more more
15:10aggressively
15:13time this is a fantastically difficult social structure there in Papua to deal
15:23with where you have indigenous people and different tribes or maybe
15:30six-and-a-half seven million people in the total Holland 25% the world people
15:37that racially different from the rest of Indonesia they're almost all Christians
15:41christians I grew up in the Bible Belt and they you know they are dyed in the
15:47wool Christians in a country that 85 percent Muslim you know it's a literal
15:54form of Islam in Indonesia because the racial differences religious differences
15:59that tribal differences were right in the middle of operate
16:07did the work for a company called computer signs a friend of mine was the
16:12managing partner person I met at this firm managing partner he looked at me
16:29and said a woman partner we don't have any women partners are so America the
16:38secret sauce for a hundred years was the best and brightest women whose job
16:43opportunities were somewhat restricted to nurse or teacher once they were
16:50emancipated and the opportunities came today
16:55car company the scene over largest defense company and the CEO of IBM our
17:01old women the country needed to recalibrate and think ok people that
17:07have educated this country for a hundred years our best and brightest many of
17:12them might be moving to other fields now as opportunities are open to them and
17:17we're gonna have to re-evaluate the compensation structure and incentive
17:21structure in our educational system to deal with the fact that we're not
17:26competing with whether they're going to be a nurse or a teacher but whether the
17:30CEO and the country even today has not fully adjusted to that change
17:38in the late nineteen eighties I visited with them really brave man at the
17:46russian embassy in the United States and EC and he had with him his equipment to
17:53our commerce secretary and he told me they want to get into venture capital
17:59they want to get into small and medium businesses they understand that they
18:04create all the jobs and they want to find a way to make that happen and they
18:08have a very strong science commitment so so I told him I i you need to understand
18:19if you're gonna get involved with venture capital not later financing but
18:23just start new businesses it's quite possible seven of the 10 will fail and
18:30then the commerce secretary commissar said to meet you put the people in jail
18:36ok of those 710 that fail I said no we assume they learn something from the
18:44experience and they'll do better next time so and then I told my don't think
18:49you're quite 24 venture capital
18:52but if america at that time had an enemy
18:55it probably would have been considered to be gorbachev was gorbachev he
19:00admonished to tear down that wall we spoke with president gorbachev not long
19:05ago and he said President Reagan was a great man so here's the biggest opponent
19:10as you could get saying about his opponent he was a great man we think
19:16today about can you work on the opposite side of things and in the end of the
19:21respect and admiration of the person who you SAT across from in it in opposing
19:27views and I think that's the kind of gentleman that president reagan was he
19:32left you with respect that that makes maybe makes a definition of leadership
19:39he also one of the greatest memories I have and it's something you might have
19:46some association with their was in a museum in New York City a handwritten as
19:53I recall three-page note that was a young student wrote to governor reagan
20:03and asked him what would how would he defines success in life if I recall and
20:08he took the time to write a long note explaining what he thought would be a
20:15definition of success in life he was a reflective man he was a compassionate
20:20man and someone who would who would take time to work with the young person and
20:25have
20:27handwrite take the time to hand to personally tell the story of what he
20:32thought would be a definition of success
20:35I don't think anybody can have it all I don't think that's a female or male
20:38shortcoming in that you have to make some choices in this world and you make
20:44choices and and then once you once you said that course you know get to go back
20:51and read and read choose those I haven't had a family I raised my younger
20:56brothers and sisters but I i'm not biologically a mother but that was a
21:03choice that I made and I think that one of the benefits we have today as he have
21:07the opportunity to do choices and and I think it's never been better and that's
21:15just hope that we face the challenges like replacing as we've just been
21:20talking about on the international scale or on the biomedical scale or in
21:24technology encoding there is more to be done than ever before we need the talent
21:30of both men and women and I think that increasingly the wise money is going to
21:36the optimal talent engagement and not necessarily just a male talent
21:42engagement so I think nobody can have it all I can curve that I've had a great
21:48life and no complaints about that but i think thats still people do make choices
21:54and and you choose and the choices you make early on and especially at the time
22:00like college time the choices that you make now set a course that will be
22:06decisive about many of the future opportunities that you get better and
22:10better education you can get better
22:13involvement in the better the more learning that you get in your youth room
22:19or the broader the rich will be what you can do with your ultimate careers and
22:24lives