Full Q&A 1998 Berkshire Hathaway Annual Meeting With Warren Buffett, Charlie Munger

Full Q&A AFTERNOON session from the 1998 Berkshire Hathaway Annual Meeting with the world’s richest man, Warren Buffett and most successful investor, with his partner, Charlie Munger.

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1998 Berkshire Hathaway Annual Meeting

How Warren Buffett Uses Discount Rates To Value Stocks

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Full Q&A 1998 Berkshire Hathaway Annual Meeting With Warren Buffett, Charlie Munger


Let's settle our place and we'll we're going to go to please. We skipped one last time so we're going to go first is open for you. My name is Nelson Urata. I'm from Southern California and I have a question and it's not really related to finding value or any of that stuff but more on House houses. I'm still quite young. I don't have a house yet and I'm became about buying a house someday soon. And in order to do that I'm going to have to put a down payment which means I might have this year or sell my years and I was wondering if you can provide some insight. When is the best time to buy a house and how much downpayment you should be putting down in relation to interest rates and also in relation to available cash in the stock market. Well Charlie is going to give you an answer to that and I'll just relate one story which was when I got married we had we did have about ten thousand dollars starting off and I suppose Susie I said Now you know there's two choices it's up to you. You could you can either buy a house which will use up all my capital and clean me out and it will be like a carpenter who's had his tools taken away from him or. Or what you could maybe work on Messen some day. Who knows maybe I'll even buy a little bit larger house that would otherwise be the case.

So she was very understanding at that point and we waited until 1956 that we got married in 1962 and I decided to buy a house when it was about what the down payment was about 10 percent or so my net worth because I really felt I want to use the capital for other purposes but that was a way different environment in terms of what was available to buy in effect if you if you have the house you want to buy. You know I definitely believe in just going out and probably getting the job done. But in effect you're probably making something in the area of a 7 or 8 percent investment and possibly when you do it so you know you'll have to figure out your own equation from that Charlie probably has better advice. I know he's a big homeowner in both senses of the word. I think it's time to buy houses is when you need one. And when do you need one. Well I have very old fashioned ideas on that too. The single people I don't care if I ever get a house Wendy you need one of your marriage. Ali I'll be there for you even when your wife was me. Yeah I think you got that exactly right. Yeah. Gregory Cropper needs to go to the security office please for emergency message Gregory Crawford to the security officer office for emergency message. Thank you OK. I hope it doesn't a margin call OK we'll go to zone 1 please. I'm Ralph Pfeffer from Phoenix Arizona. The question I'm going to ask does not pertain to Berkshire Hathaway but I would appreciate it if you gentlemen if you can explain the justification and rationalization for the exorbitant salaries bonuses perks directors fees and other benefits that most public corporations are paying.

I would say this in my own view the most exorbitant are not necessarily the biggest numbers. What really bothers me is when companies pay a lot of money for mediocrity and that happens all too often. But we have no quarrel in our subsidiaries for example for paying a lot of money for outstanding performance. I mean we get it back 10 or 20 or 50 for one. And similarly in public companies we think that there have been managers and our managers.