Value Investing

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

Full Q&A afternoon 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.

Get The Full Warren Buffett Series in PDF

Get the entire 10-part series on Warren Buffett in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues

Q2 hedge fund letters, conference, scoops etc

2010 Berkshire Hathaway Annual Meeting

PM 2010 Berkshire Hathaway Annual Meeting With Warren Buffett Charlie Munger - Full Q&A


And I think therefore we go to 13 which is in a separate room. And is there anybody at the microphone. Yes. OK. Mr. Booking instrument group from New York. When you need you. Wasn't there wasn't open debate all of the opinion on the money was on one side of the trade as thinking about this recently as we read Christine Richard's new book Confidence Game about black men and his band. He was once the largest bond insurer and aims to real remind reminded me of David Einhorn and the questions he raised about Allied Capital. Lehman Brothers we now know that there were a hundred percent correct but in the time that they first spoke up they were attacked by the companies pilloried by the media ignored by the accounting firms and the ratings agencies and perhaps most alarmingly were investigated by the S.E.C. for daring to go public with their bearish analyses. I can tell you that watching what happened to them is a real deterrent to anyone else speaking up and raising similar questions so I'd be curious for your thoughts on this is how we should out Speakout healthy markets and in general what should be done to reach agreement in news. So we can win future goals. Thank you. Yeah well I I don't see anything wrong with people who are positive or negative speaking out as long as they're willing to be held responsible for the kind of statements they make. I mean are obviously well take the extreme example if there were two banks in town and I own one of them and I was kind of a devious type of mind.

I might go out and hire 50 people to stand in line in front of the other bank and I would probably not have a competitor before on so you can do things on either side of the long side or the short side that I would regard as certainly an ethical and in many cases should be legal. But any time you attack the conventional wisdom you're going to meet with a lot of opposition because you're threatening people's positions when we would talk about the efficient market theory. 30 years ago when it was absolutely Darger that virtually every finance department in the country major schools either had to swear allegiance to it or you were not going to be promoted. You know people don't like that and any institution when they get a threat from the outside they they will attack both the threat and the threatener but that exist on both sides. I have no problem with this short selling and I have no problem with speaking out responsibly about your reasons for doing so. And the more that I have on the on the long side there have been some very bad practices on the short side and there have been some very bad practices on the long side in terms of people trying to to spread things that are untrue. But there's probably been more on the alongside over the years and on the short side by some margin. Charlie Yeah I think to some extent you're criticizing the wrong people in many cases. The accountants that allow the lousy accounting are the ones that are being held in the dock and they get very little criticism in America and that's a mistake. Baqi.

This question comes from Ben so who lives in the Metro Vancouver area in British Columbia Canada. This is for either Mr. Buffett or Mr. Munger. He wants to know about synergies at Berkshire specifically. Does it make sense that the Dairy Queen stores here sell PepsiCo products and would not expect except American Express only mastercard or visa. There are around the world that are pretty close to 6000 dairy queen outlets of one sort or another and some are called grill and chill now different things but roughly 6000 and co. operated are 70 of those so the 90 almost 99 percent are franchised and a Dairy Queen. We do not control what the franchisees do. Most of the franchisees. Last time I checked was sometime back but most of franchisees. Biden ones but the. But it is entirely their business. I mean they can they can they can serve Coca-Cola products or Pepsi. It seems some of the other franchise operations seem to have more control over that than Dairy Queen but if you think about it Dairy Queen goes back before McDonald's before Wendy's Before Burger King before kentucky fried all of those it goes way back into the 30s and a lot of the agreements with franchisees or territorial operators were done on the back of a napkin or something of the sort. So so to some extent we have less control over what franchisees do in particular in certain parts of the country than than than other people but well keep asking for Coke and maybe you can cause them to to see the light synergies. There's any synergies that Bircher come about at the operational level. Pretty much we do not tell.

We do not tell our companies to do business with each other. We hope they do do business with each other and we know and we hope that each side of us a subsidiary a offers good reasons for Subsidiary B to do business with them. But the whole idea at Berkshire is that our managers are responsible for their businesses and it's going to be responsible for their businesses. It means we shouldn't tell them what to do except in very limited ways. Charlie more accurately described the way it is. What's interesting about it is we really like it that way. It's a lot less work. And I think actually that there is some merit some nice people work better together but their decision to work together if you tell them to work together. It goes beyond that. I would like it that way if we were in the subsidiaries. There's no doubt about that. We probably leave if it wasn't that way. OK Aereo one do you Mr. Buffett do you Mr. Mongar. My name is Steven Rollman. I'm a student of engineering machine ball at the University of Ghana and Australia. If I one day one to apply as the manager with one of the bircher companies what qualities are you especially looking for. And what do I have to do to become your successor. Probably should make the managers of our subsidiaries hire their own people and the number of decisions I have to make about managers are really really few.