Warren Buffett Lengthy Interview on CNBC All in One [VIDEO]

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Warren Buffett Lengthy Interview on CNBC All in One [VIDEO]
By Mark Hirschey (Work of Mark Hirschey) [CC BY-SA 2.0], via Wikimedia Commons

Warren Buffett Lengthy Interview on CNBC All in One [VIDEO]

Buffett: Us Residential Housing Starting to Pick Up

Warren Buffett, Berkshire Hathaway CEO, discusses the global slowdown, saying the stock market is generally the best place for investors to have their money.

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Transcript:

let’s get to becky in columbus, ohio, this morning with berkshire hathaway ceo warren buffett. is he there, becky? he’s ready to go. with a new york jets tie on. is that what that is? you said he had a nice net jets tie on, and — and what did i tell you? i said you’d have to ask him. did you bring one, warren? just we’ll get to it later. he wants to hear you beg for two hours. i know, and then he doesn’t do anything. i’m going to try. i’ll come up with something for you. i’m going to try. well, you know, joe, we are very fortunate to have warren with us here this morning. and warren, this is the first time we’ve gotten a chance to sit down and talk with you since the prostate cancer treatment. how are you feeling? i feel fine. i feel great. they gave me some hormones too, so occasionally i get some hot flashes which we males call those power surges, actually. no, it was — it got tiring after a while. the radiation, you know, you don’t feel anything. but i felt it was time to quit when i started getting the urge to pee sitting down. but you’re feeling good. i feel great. you look great, and we’re happy to have you with us today. thank you for joining us. this is one of the best times we’ve gotten to talk to you because there have been so many questions lately about what’s happening in the economy. we’ve heard from major companies like 3m, caterpillar, dupont, all these companies, u.p.s. who have come out and said the global economy is very uncertain. it’s slowing down a little bit. they’re not sure about what they see in the future. and it’s raised a lot of questions in the market too. the market’s been selling off over the last week or so. real concerns, people sitting up and saying, uh-oh, maybe there’s something really happening here. do you think the market’s overselling this situation? or do you think it’s catching up with reality? what do you see? well, i think stock market generally is the best place to have money. but i think that there’s no question that worldwide there is some slowing downgoing on. and in the united states, actually residential housing is picking up and we’ve been waiting for that for a long time. and it hasn’t gotten to any big level yet. but our carpet businesses and brick businesses and all of that will come on with residential construction. and that has turned. and the general economy, i think it’s better than the u.s., certainly better in the u.s. than it is in europe. and in terms of the rate of decline in asia, it’s reasonably and we’re still inching ahead, but it’s inching. when did you first start to notice this global decline? this global slowdown? well, we’ve had a couple of companies that really are kind of realtime as to what’s going on. the number one, they sell these little tiny punching tools or cutting tools and they fit in these huge machine tools, cost millions of dollars. anybody turning out anything big are buying these little razor blade type items from us. and they don’t need a big inventory, we can deliver very quickly. their purchases reflect usage. and our strongest market is in the united states. but europe and asia have fallen off some. ane’re gaining market share. so there’s a decided decline in activity in all that manufacturing where you’re stamping metal and doing this sort of thing. we heard from caterpillar the other day and he says that he looks around the globe and he doesn’t expect to see a recession anywhere in 2013. but europe is the biggest problem spot. would you agree with that assessment? well, it is at present. its rated decline — it’s off a lower base. its rate of decline is not greater in my view than the rate of decline in asia. it’s just asia was doing better. the united states, actually, as they got the steadiest trajectory. and i don’t see any change in that, i mean. we’ve got the freight car — we’ve got a big energy pick-up in the united states, we’re getting a housing pick-up. those are big industries. let’s talk about some of those numbers, housing is a huge key. you told us before we’re not going to see a turn in the unemployment picture until we see a turn in the housing. he said you’re not going to see a turn in the unemployment picture until you see the turn in housing. he kind of set the thing on his head and said it’s the other way around, which comes first. well, demand comes first. you hire people when you start seeing demand. and you are seeing more demand. you’re seeing greater — i was with a guy last night at the ge dinner that is in the business of selling lots. we have the largest housing manufacturing company in the counat clayton homes, manufactured homes, but those — that business is up in the area of 10 to 15%. in terms of volume? in terms of units. in terms of units. real estate brokerage, we not only see a 15% increase in transactions, but we also see a small increase in the median price. this comes from all over the country. you name it. so that’s changed. you know, we’re going to make a lot more money on carpet this year than we made last year. and we hire people when that happens. so the united states economy is not tanking. asia from a higher level, wouldn’t necessarily call it tanking, but it’s heading down and europe has been having its troubles for some time. does that catch up with us? does that affect us at some point too? well, what we really hope is we affect them over time. and, no, i don’t necessarily think so unless there gets to be chaos some place. we’ve already adapted to what’s going on around the world. tell me what you see in terms of the rail cars. you were saying you were watching loadings on those. burlington northern — well, at burlington, coal is down as it is with the other railroads, oil is up, and when you’re fracking, you bring in lots of sand. so sand would be, for example. and u.p. just reported and they’re seeing small gains in things other than — they’re seeing it in lumber. they’re seeing it in cars. we’re seeing it intermodal. we’re the biggest in intermodal. we carry 15% of all the freight measured by tonnage in the united states. just the burlington northern carries almost half as much as all the trucks in the united states in terms of ton miles. and you’re not seeing any downturn, seeing actually numbers go up? seeing numbers go up. that was a little deceptive a month or two ago. so the figures were very easy there for july and august. but we are seeing small gains. but they’re small. and in terms of what you see at mid-american. you talked about energy demand, that had been weak for quite a while because companies weren’t using as much energy. how is the picture on that? kilowatt hours were down this year. but we — look at it this way. berkshire-hathaway spent $6 billion on equipment, we spent last year $8 billion on plant equipment, another record, this year we’ll spend $9 billion on plant equipment, another record and practically all of that is in the united states. we see lots of things to do. a good bit of that is in the rail business and the energy business, but there’s a lot to do. and incidentally, you hear a lot about infrastructure and terrible shape it’s in, the rail industry’s infrastructure is the best shape it’s been in. joe has a question for you, as well. along the same lines, warren. if you were going to start a new berkshire hathaway, and you were trying to play whatever happens, trying to take advantage of what happens in this country over the next 20 years, what would — how would you do that? would it be natural gas? would it be coal? would it be solar? how do you think you would do that? all of the above? are you smart enough to see how this plays itself out with fracking and natural gas? i’m interested enough to follow it, but i don’t think i’ll be able to write the newspaper two years from now at the current time. but we are putting a lot of money in the solar and wind. that’s what we do at mid-ican. if you get into producing energy itself, i’m not — you know, i would be no good at that game. i’d have to join with somebody else i thought was terrific. but i don’t know — i read about it. and i feel very good about what i read, and we transport a lot of oil. but i don’t, you know, you stick me next to an oil well and i go back to a clark gable movie as to what i’m supposed to do. have you shared your thoughts about, you know, exporting natural gas? oh, i know where you’re going. i wondered whether you’ve talked to warren about that. i haven’t. warren, let me tell you before joe makes it sound worse than it is. i have had some concerns about this idea of exporting natural gas. because, look, if you want to be energy independent, he thinks it’s a stupid idea, he thinks we should use all of their stuff. but i worry if we want energy independent, why would we ship this natural gas to other people? build it and keep it here. tell me why that’s wrong. no, i’m with you. you are? oh, see. no, no — if you’ve got a national treasure, and we had that in oil. if you go back 50 years, we were an exporter of oil, producing way more than opec and the texas railroad commission used to announce every month how many days you could produce in texas. it was an opec of its time. we tookse huge prolific fields the east texas fields and we sent that stuff abroad and getting $3 a barrel for it. and we built a strategic petroleum reserve later on. now, i believe if you’re dealing with a scarce commodity, something you know is finite over time, use the other guy’s. joe, there, take that. i never thought warren was a protectionist. that’s amazing. i’ll protect something that we’re going to need to keep this country going 50 or 100 years from now. i don’t want to ship our tal overboard. we may have enough, though, for the entire world. and that would be a great export business eventually to be in if we were self-sufficient ourselves. it would be for a while. but if you’re looking out 100 or 200 years, and thank god people 200 years ago were looking out in many respects. although, we weren’t looking out in the 1950s. i love that you’re worried like 100 years from now and not just for your ancestors, it’s for you 100 years from now. i like that. exactly. i like it that you like it, joe. because i do. real quick, warren. i’m curious with the market selling off $500 billion in the past three days, knowing you, i think you’re probably watching this thinking what am i buying? is there anything — have you done anything in the past three days? maybe in the past week we’ve done some things. but basically i like to buy. and, you know, so that if the market is down, you know, i’m happier buying. i like to buy. if i go to the supermarket and they reduce prices, you know, i feel better. if i go to a men’s clothing shop, they reduce prices, i feel better. if i go to the stock exchange to reduced prices, i feel better. what did you buy in the last week? in the last week i bought some wells fargo. you did? yeah. we only have 430 million shares, i didn’t feel we had enough. you look at the banking business overall, is it going to be as profitable? no, it can’t be as profitable. the profitability of banking is a function of two items, return on assets and assets to equity. and return on assets is not going to go up particularly. they’re at about 1.7%. wells is between 1.4% and 1.5%. most banks are lower. now, if you have 20 times leverage and you’re getting 1.5% on assets, you’re making 30% on equity. and that was not lost on people a few years back. they pushed balance sheets and still pushing them in europe, but they’ve cut back on that here. they will not be having the leverage in the banking system. it’ll be even more restricted among the bigger banks as part of the new rules. and you won’t be able to earn more on assets than before. with less leverage and the same return on assets, you’ll have a lower return on equity. bank earning 25% on tangible equity not so many years ago. and really, that’s kind of a crazy number. you know, for a basic semi-commodity business,ou don’t want to allow that, but that was allowed because people felt their bank deposits were guaranteed by the government. therefore there was no market force that would look at the shape of — condition of a bank and say i won’t put my money there because they look kind of dangerous with all this leverage. and therefore people got to push it and push it and push it, and then the government says, listen, we’ve got a vested interest in this, you’re using our credit in effect. and if you want to play, you’re only going to have 10 to 1, the return on banks — but you still think it’s a well run, it’s a good business, but it’s not like — it won’t get back to what it was. okay. the european banks still are leveraged to an extraordinary extent just because they don’t know how to get out of it. but they are earning 1.5% on deposits either.

Warren Buffett: Global Economy ‘Slowing Down’

In this “Squawk Box” excerpt, Warren Buffett tells Becky Quick there’s “no question” the global economy is slowing down, but the U.S. is “inching along” as the U.S. residential housing market starts to improve.

Transcript:

but i think that there’s no question that worldwide there is some slowing downgoing on. and in the united states, actually residential housing is picking up and we’ve been waiting for that for a long time. and it hasn’t gotten to any big level yet. but our carpet businesses and brick businesses and all of that will come on with residential construction. and that has turned. and the general economy, i think it’s better than the u.s., certainly better in the u.s. than it is in europe. and in terms of the rate of decline in asia, it’s reasonably and we’re still inching ahead, but it’s inching. when did you first start to notice this global decline? this global slowdown? well, we’ve had a couple of companies that really are kind of realtime as to what’s going on. the number one, they sell these little tiny punching tools or cutting tools and they fit in these huge machine tools, cost millions of dollars. anybody turning out anything big are buying these little razor blade type items from us. and they don’t need a big inventory, we can deliver very quickly. their purchases reflect usage. and our strongest market is in the united states. but europe and asia have fallen off some. ane’re gaining market share. so there’s a decided decline in activity in all that manufacturing where you’re stamping metal and doing this sort of thing. we heard from caterpillar the other day and he says that he looks around the globe and he doesn’t expect to see a recession anywhere in 2013. but europe is the biggest problem spot. would you agree with that assessment? well, it is at present. its rated decline — it’s off a lower base. its rate of decline is not greater in my view than the rate of decline in asia. it’s just asia was doing better. the united states, actually, as they got the steadiest trajectory. and i don’t see any change in that, i mean. we’ve got the freight car — we’ve got a big energy pick-up in the united states, we’re getting a housing pick-up. those are big industries. let’s talk about some of those numbers, housing is a huge key. you told us before we’re not going to see a turn in the unemployment picture until we see a turn in the housing. he said you’re not going to see a turn in the unemployment picture until you see the turn in housing. he kind of set the thing on his head and said it’s the other way around, which comes first. well, demand comes first. you hire people when you start seeing demand. and you are seeing more demand. you’re seeing greater — i was with a guy last night at the ge dinner that is in the business of selling lots. we have the largest housing manufacturing company in the counat clayton homes, manufactured homes, but those — that business is up in the area of 10 to 15%. in terms of volume? in terms of units. in terms of units. real estate brokerage, we not only see a 15% increase in transactions, but we also see a small increase in the median price. this comes from all over the country. you name it. so that’s changed. you know, we’re going to make a lot more money on carpet this year than we made last year. and we hire people when that happens. so the united states economy is not tanking. asia from a higher level, wouldn’t necessarily call it tanking, but it’s heading down and europe has been having its troubles for some time. does that catch up with us? does that affect us at some point too? well, what we really hope is we affect them over time. and, no, i don’t necessarily think so unless there gets to be chaos some place. we’ve already adapted to what’s going on around the world.

Buffett: Instincts Go Against QE3

Warren Buffett, Berkshire Hathaway CEO, weighs in on the Federal Reserve’s decision to issue another round of quantitative easing; adding, he has “enormous respect” for Bernanke but has concerns over “expanding the balance sheet of the Fed.”

Transcript:

box, we are speaking to warren buffett and becky is out there.mr. buffett telling us he’s beenying wells fargo this week. that stock has now turned positive since those comments. becky, they told me to ask a question. is that okay? i’m not going to presume — yeah, go ahead. warren, you like to buy. you just said you like to buy. peter sellers liked to watch, but you like to buy. buying doesn’t preclude watching. no, not with you, i’m sure. but that — i figure anything that moves the market higher,you’re not going to — better than a sharp stick in the eye. so qe-3 is great. market’s been going up. but if you were a voting member, and they’ve got another one of the meetings today, two day — i don’t know, they come so quickly, i don’t even remember. if you were there when they voted for qe-3, would you have voted yes for qe-3 if you were a voting member? i hadn’t thought about that, but i would say this. i would listen very carefully to bernanke, but my instincts would probably be to go the other direction. but i would listen to his arguments. you said with qe-2, you thought maybe it was going too far at that point. so qe-3 is doubling down on that. my instincts are to goagainst it. i think it’s much easie if you’re a central bank and youcan print money. it’s much easier to acquire $2.7 trillion of securities than it will to be unwind that operation. and you can expand it indefinitely. if he wanted qe-2 to be $100 billion a month or qe-3, he’s the one guy that can do it. he has unlimited buying power. mited selling power could be a little different. you need some cooperation on that. warren, you’re a supporter ofthe president, though, governor romney suggested tha would — i wouldn’t suggest he would fire bernanke, but he wouldn’t pick him up for a third term. not clear, by the way, that bernanke wants a third term even under obama, but how does that in terms of politics? i think bernanke has done an absolutely superb job. i mean, what he did in the fall of 2008 was gutty, it was basically right, you know, everybody can talk abouttinkering at the edges, but i will say this, if ben bernanke hadn’t been there in 2008, i’m not sure where we would be now. i have enormous respect for him. he’s a very, very intelligent man.you’ve got to respect him enormously. and, you know, he sees an omy that he’s sort of fighting by himself to get started when you look over at a congress that’s more or less paralyzed. and i would never bet against him. i would say that i get a littleworried about continuously expanding the balance sheet of the fed. and, you know, we now are getting 3% of our revenues from the profit that the fed is running on its carry trade if you look — the united states gets 3%? yeah. that 2.4 trillion or 2.5trillion of revenue, the fourth biggest item, the first item ispersonal income taxes and then payroll taxes, then corporateincome taxes, the fourth is dividend from the fed. he makes $70 billion or $80 billion last year. this is unheard of if you go back a few years. when he borrows, he’s got $1.25 trillion, then $1 trillio of money in circulation,ch he doesn’t pay anything for except for the cost of the paper. do you worry about inflation down the road? is this something we’ll see coming? will we be able to put the brakes on in time and try to get the liquidity back out of the system? nobody understands that problem better than bernanke. yeah. that doesn’t mean i necessarily think the solution is going to be perfect. i’d rather have him thinkingabout it and trying to modify the impact of — but to andrew’s point, if he doesn’t have another term or if he chooses not to stand for another term and there’s someone else there, that person’s going to have a pretty difficult job. yeah, depends who it is. but i would vote for bernanke again. you know, i get my kids out and everybody else to vote for. but if bernanke says thathe’s not even interested in staying. they worry that he knows what he’s leaving behind. he says he maye hav done enough time there. well, i think he probably feels that way, particularlyafter his congressional testimony. but i do think if the presidentof the united states asks someone like ben bernanke to stay on, i think he will stay on. i think he’s that devoted to thecountry. all right. and i would rather have him there than anybody else. warren, do you think where the bond market is right now given the extraordinary action by the fed, do you think it’s not that far from where it would be if they hadn’t been asactive? and then i guess it’s okay. but if it be long way fromwhere it is without them, doesn’t that cause some dislocations that eventually are going to come back to haunt us? i like when stocks go up too. and i can see it in your eye, you like when the market’s going up. i’m wondering, is it worth it? no, no — you do. who doesn’t like when the market goes up for whatever reason. but if it gets to a point where it’s not up based on theunderlying fundamentals, seems like sooner or later somethinghas to happen, no? interest rates are — the prices of all assets, you know, li gravity is to the function of the earth. everything is based off interest rates. it may not seem obvious that the value of some plantation in brazil or something is geared off of it. but everything relates to interest rates. you start with what you can get risk-free interest rate. and so it has a huge, hugegravitational pull. affects what i’m doing. it affects what everybody’s doing. affects what you’re doing at berkshire?yeah. if i’m getting 0% on money, i am going to look at other assets somewhat differently, whether it’s buying a farm or anapartment house or anything else. and of course, the people who will lend money to me to buy the apartment house are going to lend it to me cheaper. it’s one of the reasons irecommended housing six months ago because the low interest rates caused low mortgage rates and low mortgage rates and when you can sign up for 30 years off a policy that may be in effect for another year or two, you’re getting a tremendous deal. but, no,joe, the fed has had an enormous effect on interest rates. but it’s okay. well, i don’t know if it’sokay or not. but i know that — the price is going up. well, i would say that it’s marvelously okay if you’re buying a house or something like that. but in terms of policy. in terms of policy, the chairman of the fed and the members of the fed made a decision that the economy needed enough of a jolt. and it wasn’t going to get it through enlightened fiscal policy and they were going to basically carry the whole load themselves. i don’t think they enjoy it, but i think bernanke, i think he’s avery responsible gu now, it doesn’t mean he calls them all right, but i think he’s

Buffett: ‘We Mostly Buy Stocks For Future Earnings’

Warren Buffett, Berkshire Hathaway CEO, discusses his long-range investment strategy, and weighs in on IBM.

Transcript:

i don’t know why buffet doesn’t put all his money in verizon andat&t. do you ever look at those companies? i don’t know what it would look like five or ten years from now. there he goes again, 100 years from now, so 5% in the meantime, you know, that’s true, though, warren. people would say, i’ve got a 5% yield, doesn’t take much for stock to go down 5%, does it? that yield doesn’t necessarily hold up if the market’s headed south. like toll booths — yeah. we mostly buy stocks for future earnings. if you used all the money to repurchase shares that could beeven more advantageous. because you end up owning a bigger and bigger chunk o the company. ibm spent 3 billion in eachquarter of this year. the cheaper they buy it, the more our interest goes up. you still like ibm after all the troubles technologycompanies have seen? they’re struggling a little. it was kind of interesting. in the — we owned — we own a little more than we owned at year end and we got great confidence over the years.but in the third quarter, they had a sale of a subsidiary rss that produced about 288 million, i think after tax, which was all the gain. and to my knowledge, the wall street journal did not have a line on it. it was one line in the report and it counted for all the gain in earnings and it was a sale of part of a business. you know, i think the reporting missed the boat on that one.

Buffett: ‘We’ll Add 8,000 Jobs Organically’

Warren Buffett, Berkshire Hathaway CEO, weighs in on what Berkshire Hathaway is doing to create jobs, adding “we’ll probably add another 10,000 or 15,000 jobs on acquisitions” this year.

Transcript:

welcome back, everybody. we are with warren buffett thismorning in columbus, ohio, at the summit sponsored by general electric and ohio state university’s business schoolhere. we talked an awful lot about businesses. the reason we’re here today is because of this focus on mid-sized businesses. an awful lot of questions about jobs and the jobs picture out there. mid-size companies account for a lot of the job growth we’ve seen over the last several years. can you talk to us a little bit about what berkshire’s been doing in terms of jobs. berkshire probably has at least 50 of the 75 companiesthat would fit the middle market 10 million to 1 billion of salescategory. it looks to me, there’s a few months left. but it looks to me like we’ll add at berkshire on a base of 270,000, we’ll probably add about maybe 8,000 jobs organically. and then we’ll probably add another 10,000 or 15,000 on acquisitions.for this year that we’re in right now? yeah. certain businesses like geico and burlington northern have added people. then we bought a fair number of what we call build on acquisitions. in terms of the jobs growth, what about the companies that are related to housing. you’ve been talking about how you’ve seen a turn there. has that translated into jobs growth? there’s some job growth. our clayton homes is going to produce something like 15% more homes this year and that takes more people.and geico is going to sell more insurance policies and thattakes more people. and the — our furniture businesses are doing very well. we’re selling a lot of carpet and furniture. and so we add people, but we’ve also got to add — moreacquisitions this year than ever before in our history by somemargin. and they bring with them thousands and thousands ofpeople. how much cash do you have onhand right now? bly have at least 40 billion. are you on the hunt for another big acquisition? i’m salivating. yeah. a fellow handed me a card last night and said this will cost you $6 billion. and he didn’t give me the financials, but i’m going to call him when i get — i know the company. so when i get home, i’ll call him and ask him for the financials. have you looked at any other big acquisitions? we had two acquisitions this year. possibilities that were plus and minus $20 billion. and where the ceo wanted to do it, but it didn’t get done. prices are tough. prices are tough right now. yeah. all right — and cheap money makes that a factor in it.

Buffett: ‘We Buy on an All Equity Basis’

Warren Buffett, Berkshire Hathaway CEO, says he feels some of the acquisition prices are getting out of control, but adds he is “salivating” to do another acquisition.

Transcript:

welcome back, everybody. we are coming to you live from ge capital’s middle market summit taking place at ohio state university in columbus. i’m joined by berkshire hathaway ceo warren buffett. and you’ve been talking about how you’ve been on the prowl looking for big acquisitions around $20 billion or so. a couple have fallen through, but part of it is becausepricing’s difficult. pricing’s difficult and money’s cheap. we don’t leverage our purchases and we’re buying on an all-equity basis. but people that do leverage are getting significant portions of the purchase price at very, very low rates, probably as low as they’ve gotten. so that enables them to bid pretty aggressively and doesn’t factor into our thinking. you think at this point maybe some of these acquisition prices are getting a little out of control? well, that’s the way i feel. but, you know, that’s natural when you’re getting beaten out. but you won’t raise your prices to compete? no. but now we had a record for boldon acquisitions. we’ve probably done, i don’t know, maybe 15 different acquisitions, but probably add up to $2 billion or something of the sort. and they’re good and fit in withcompanies we have. but what i really like is the elephant. so you’re always out elephant hunting. absolutely. with your elephant gun. and they’re more likely to come along when monditions are fairly tight or something of the sort. if you can borrow money at these rates, you can pay a lot of money. and other people if they pay the wrong price, they walk away fromthem. but if we pay the wrong price, we live with them forever. if these deals haven’t gone through, that means you’ve beenlooking more aggressively for stocks to buy in the market. well, we’re always looking for stocks and i’ve got two fellows working for me that are really looking for stocks all the time. but i usually end up buying more of something i already know. any new company, any new stock i look at, i measure it against the best idea i’ve got among the present ones, and i’m perfectly willing to just keep adding to the present ones. so it has to beat them.and i know those companies pretty well, so it’s a pretty high threshold. let’s go back to ibm. you were talking a moment agoabout ibm, have you added any shares to that company in thelast couple of months? maybe — we’ve added shares this year.we haven’t had a lot of shares. but we’ve — well, we probablyadded, you know, being many hundreds of millions. wells we probably added maybe $1 billion worth, something like that.when you first announced your stake in ibm, it caught a lot ofpeople by surprise because you have always stayed away fromtechnology companies, you’ve said it’s something you didn’treally understand and so you didn’t want to get involved with it.right. in looking at ibm, you said it was a little different situation, it made senseu at that point. i guess part of that is the services factor ofit. but when you look at these big technology companies, looks like some of them may be maturing, have you regretted getting into ibm shares at all? no, i’m delighted to be in it. uh-huh. and i think they’ll probably do better abroad than in united states over time. when we buy something like that, i go to our companies and see what they’re doing and plan to be doing in future years. and how tied in they are with given suppliers and how much stickiness there is to it. and so we — i — even though, you know, if you put me in a computer room and spin me around, i’m lost, you know, i just hoping it helps me get out. but i do know what our managers tell me about their plans.and the degree to which they’re involved. and i had one manager tell me something that isn’t quite repeatable in terms of — you get pretty locked in sometimes with your supplier.what’s not repeatable? well, i asked him how sticky — i won’t name the company, he said, well, it’s like — so it sticks. it really does. i should bring up the insurance companies. they’re big.jim cramer had said he’s very interested in hearing more aboutwhat’s happening with insurance because a lot of insurancecompanies have been doing very well lately. what can you tell us about berkshire’s? they’re doing very well. we have about$70 billion of other people’smoney, we call it flow. and when we run a underwriting profit, i get to earn the money on this. and this year we’ve had an underwriting profit. not only have they given us $70 million, but they give us more money to hold it. so when insura