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PM 2004 Berkshire Hathaway Annual Meeting With Warren Buffett, Charlie Munger – FULL Q&A

Full Q&A afternoon session from the 2004 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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Warren Buffett

PM 2004 Berkshire Hathaway Annual Meeting Warren Buffett, Charlie Munger - FULL Q&A

Transcript

After reading your story on Enron I would like to ask you the following question How does an entry level employee in a large company find out if her employer operates with a long term perspective and with honesty and integrity. Well it's a very good question. I'm not sure I'm going to have an equally good answer. You know you pick up signals or frequently you can pick up some signals about what is going on at the top of a business if you're at a lower level. But I would say it would be very easy to be easy to fool on that subject. Charlie and I would tend to be looking at things that they do in public in relation to their investors and the promises they make and all of that sort of thing. But I think that might be tough for people and it wouldn't always give you a great guide. We've been suspicious of companies for example that place a whole lot of emphasis on the price of their stock and when we see the price of the stock posted in the lobby of the headquarters or something you know things like that make us nervous but I'm not so sure that you know that that would be enormously helpful so I guess you just have to sort of pick up from co-workers publications pronouncements of the leaders the sort of culture that was that was being presented to them in the world. And you might get suspicious about it and I don't think I have a really good answer for that. Charlie No it's obviously easy when you've got a caricature of a person like Bernie Ebbers or or Ken Lay.

I think it's easy to say that you've got almost a psychopath in charge. But what fools you is a place like Royal Dutch if I'd been asked to guess major companies with sound long term cultures and good engineering values and so forth. Royal Dutch would have been near the top of my list to have the oil reserves for need for years and internal reports that people were tired of lying began to happen at Royal Dutch. Believe me it can have been a lot of other places that Charlie and I would not have spotted the Royal Dutch by any of the means that we normally used in that way. Charlie we buy to use that as an example of some place that was almost certainly above reproach and then than you do read emails and all that but we will learn because I would still expect that Exxon's figures were fair. I think what was tragic what transpired and then in the 1990s was this gradual and later on not so gradual embracing at the top of the feeling that anything goes that you know I don't I'm not going to speculate as to the molders at the top of Cheryl but there was so much there's so much going on where people saw the the fellow's most cases follows unfortunately that were at their club is that they saw in other corporate meetings or respected business leaders they saw just one after another that were really cutting corners in one way or another and you know situational ethics can take over in that people.

People do think they sink faster to the lower prevailing morality than they rise to a higher prevailing morality but they they do move in the direction of of what they perceive to be the prevailing morality of those around them in many cases. And certainly the corporate world in the late 1990s particularly was it was extreme on that. And that leads me into I ran into a friend in the lunch break who was involved in these matters and and he suggested and I'm delighted to put in a Plaga to encourage all of you to write your congressmen and senators to should be expensed or whether indeed whether Congress has got any business.