Full Q&A afternoon session from the 1999 Berkshire Hathaway Annual Meeting with the world’s richest man, Warren Buffett and most successful investor and his partner, Charlie Munger.
What can past market crashes teach us about the current one?
Full Q&A - PM 1999 Berkshire Hathaway Annual Meeting With Warren Buffett, Charlie Munger
OK if anyone who has questions wants to go to the microphone we're going to start here in just a minute and we will we will start. There will only be eight zones from this point forward because we have everyone in attendance in the main hall. So we will rotate around eight zones. We'll stay until about 330 and we'll start in zone 1 my name. My name is Charlie Seacom from Lexington North Carolina. As you can tell Babiak Stan My question relates to the general repurchase. I wondered. I've read your letters through the years and I've been trying to learn a little bit about investing in insurance companies. Did you buy General Re mostly because I know mostly because of the float because you think you can grow the float. I know it's not growing significantly now or did you buy it because you felt like you could do better with the investments I've read also that companies who seemed to be trying to follow the Berkshire model are trying to get a certain amount of investments to equity. Is that something that you focus on. That's that's my question. Yeah the first first two parts are correct the way. We certainly we don't think we we don't think the floor will grow rapidly in the near term future at all. The float changed actually declined very slightly in the first quarter and Attis level of 6 billion or so premiums the paid losses are likely to run at a rate that would cause the float to remain more or less steady.
So it will take a period when premiums grow for the float to grow and the premiums would have to grow fairly substantially to have any significant impact on the flow. And like I say that that will not happen in the short term. We expect the float to grow over the longer term we expect that general rate will probably grow considerably faster in the international markets than the domestic market. We think that their reputation which was as good as could be found from an operational standpoint from a technical standpoint a managerial standpoint will be further enhanced by Berkshire's capital strength. So we think their reputation is likely to grow over the years and we think the premium Viom will follow but not in any major way at all for a few years at least. And then we as drest earlier and them and the meeting we think the there is the opportunity to do better with that flowed from time to time in the future. But right now that is not it is not a plus that it's in our hands and it may not be a plus a year from now. We think at some point it will be a plus. We also pointed out that there are some there could be some tax advantages to be included as part of Berkshire as well. So there are some things going for it but none of them will have it and they will not have an impact in 1999 and they may well not have an impact in 2000. We obviously think Berkshire 10 years from now will be worth more on a per share basis with Gen3 included than if it were done if we had not made the deal.
We don't necessarily think that's the case on a one year to year basis but it is our judgment on a 10 year basis. I would say that if we in the future do as one third as well with the new float that came to us with general rates as we've done on average in the past it will work wonderfully if you take our past use of low in the history of this company. It will be an interesting study of if anybody ever stretched it out. So until Good afternoon my name is Greg cays from Oakland County Michigan like to thank both of you gentlemen for your hospitality this weekend. My question deals with price deflation.