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AM 2010 Berkshire Hathaway Annual Meeting With Warren Buffett, Charlie Munger – Full Q&A

Full Q&A morning session from the 2010 Berkshire Hathaway Annual Meeting with the world’s richest man and most successful investor, Warren Buffett and his partner, Charlie Munger.

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AM 2010 Berkshire Hathaway Annual Meeting

AM 2010 Berkshire Hathaway Annual Meeting Warren Buffett Charlie Munger FULL Q&A

Transcript

Good morning. I'm Warren, he’s Charlie. He can hear I can see we work together for that reason. Like to make one correction in the movie my fastball was filmed in slow motion. They tried it the regular way and you couldn't even stay our approach to day will be to announce a couple of things earnings and introduce you to the directors. But as soon as that's through we'll we'll move on to questions we'll have those until noon. We'll break for an hour and we'll come back at 1:00. Those of you who are in the overflow rooms may find that you can get into the main the main arena here. At that time and we'll go till 330 with the questions and then we'll have the meeting of the annual meeting business meeting. For those of you who are still around at that point and at that time we will have the election of directors but because not all of you may be here at that time. I would like to introduce the directors to you and I'll ask them to stand and if you'll hold your applause until they're all done standing or you can even hold it after that. It will make it all make for a very orderly meeting. So let's start in that Howard Buffett I'm the next one alphabetically. Our new director Steve Virk they didn't hear the part about stay standing but that's OK. They generally they're generally fairly obedient but Susan Decker Bill Gates David godsman Sandy godsman Charlotte Guymon Don Keough is unable to be with us today.

He's had a serious operation but he's recovering very well and he's got a lot of friends in this audience and he'll be with us next year. Chuck Charlie we've already introduced Tom Murphy Ron Olsen the manager and our movie. And Walter Scott. Now you can go wild with applause with the girl now before we start with the questions we do have Pillowman or earnings figures for the first quarter. And I'd like to ask the projectionist to put up a slide. There's nothing really very surprising in these numbers. But we'd like to give them to you they hope up there okay. Yeah. They have any questions on these later on. What we're seeing in our businesses is that and what was sort of a sputtering recovery a few months ago seems to have picked up steam in March and April. So and our businesses that kind of serve broad industry such as the railroad or Marman or as car we're seeing a pretty good uptick it's a long way from where it was a couple of years ago. But but what was very spotty and in the recovery a couple of months ago the trends really seeing a fair amount stronger in the last few months. And we always encourage you to focus on operating earnings. We don't have the figures there for our investments in derivative businesses. We don't really think they mean anything on a quarterly basis. Obviously they're meaningful over the years. I mean we piled up a lot of net worth over the years with capital gains. But in any quarter they mean absolutely nothing. And you'll notice another thing about our report we don't even put down.

We have to when we publish generally but we don't even put on the earnings per share. We don't we're not focused on that number in any quarter in a year. We're focused on the build up of value and we really think that an undue focus on quarterly earnings not only is probably a bad idea for investors but we think it's a terrible idea for managers. If I had told our managers that we would earn three dollars and seventeen and a half cents for the quarter they might do a little fudging in order to make sure that we actually came out at that number. And there was a very interesting study that was published a few months ago where thousands of earnings reports were examined and instead of taking it out to the penny which is customary in the reporting they took it out one further digit. And of course if you got one further digit and it's four or less around downward and if it's five or more you round upward and they found out that is statistically impossible number of small number of fours showed up because if they got to four tenths of a cent somehow somebody in the accounting department managed to find another tenth of a cent so they get around upward. It wasn't. It was not an accident. And you do not want to have in our view we think it's terrible practice to be thinking about trying to report to some penny that you whispered to Wall Street analysts in previous months and we'll probably carry that too extreme at Berkshire but we always think of the enterprise as a whole.

We think about building value over time and we do not worry about earnings per share and we don't worry about investment gains or losses. Charlie may want to weigh in on this one a bit and surely will agree with you. Yeah he is the perfect vice chairman. They don't come any better. Okay with that preliminary we probably ought to quit at that point. Actually we're going to alternate the questions between a panel of three journalists here. We have Carol Loomis of Fortune magazine on the on the far right and we didn't do it quite alphabetically we have Andrew Ross Sorkin when the New York Times and Becky quirk of CNBC Andrew has maneuvered for a seat there apparently to get earlier in the questioning order but I'll probably stick with the alphabetical list. And we will alternate between our journalists and then we will go all around the auditorium here where people have been chosen by chance to ask questions and we also will go to just I guess one of the overflow rooms we have a whole lot of overflow rooms but we'll will will not go to all of them. So let's just start things off Carol.

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