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(clinking)

Woman:
And now one of the most
respected investors in America

is going to tell you
about his secrets.

(clinking fades)
(clock ticking)

Man:
"Warren Buffett."
It's the sound of money.

$9.2 billion...
Woman 2: Billionaire investor
Warren Buffett,

the second richest man
in America.

Man 2:
He's estimated
to be worth about $62 billion.

That makes him
the richest man in the world.

♪ ♪

Woman 3: You know,
Buffett is not exactly
what you might expect.

Woman 4:
Even though
he's in the money business,

he doesn't even own
a calculator or a computer.

Man 3:
He takes the long view,

and it's made him billions,
many billions.

Man 4:
Maybe you can beat the house,

but I don't think you can beat
Warren Buffett.

Man 5:
Buffett filed his first
tax return at 13 years old.

(man 6 laughs)
But he's no average
billionaire, Tom.

Tom:
No, he certainly isn't, Matt.

Woman 5:
He's a $44 billion
average Joe.

Man 7:
Warren Buffett
has an approach

that doesn't
make him very popular
with his fellow billionaires.

Man 8:
Warren Buffett,
the boy from Nebraska

who grew up to become
the Wizard of Omaha.

Man 9:
What was it about him
that allowed him to become

the richest man in the world?
How did he do it?

♪ ♪

(birds chirping)
(traffic sounds)

Warren:
70 years ago,
I was in high school.

Almost a third as long
as the country has been around.
(school bell rings)

And when I was
in high school,

I really only had
two things on my mind...

girls and cars.
(all laugh)

And-- and I wasn't
doing very well
with girls,

so we'll talk
about cars.

But lets just imagine
that when we finish,

I'm going to let
each one of you pick out
the car of your choice.

Sounds good, doesn't it?

Pick it out,
any color, you name it,

it'll be tied up
with a bow, and it'll be
at your house tomorrow.

And you say,
"Well, what's the catch?"

And the catch is...

that it's the only car
you're going to get
in your lifetime.

Now what are you going to do,
knowing that that's the only car

you're ever going to have
and you love that car?

You're going
to take care of it
like you cannot believe.

Now what I'd like to suggest

is that you're not going
to get only one car
in your lifetime,

but you're gonna get
one body and one mind,

and that's all
you're going to get.

And that body and mind
feels terrific now,

but it has
to last you a lifetime.

I'm on the way
to the office.

It's all
of a five-minute drive.

Been doing it...

for 54 years.

One of the good things
about this five-minute drive

is that on the way
there's a McDonald's,
so I'll pick up something.

Woman on speaker:
Good morning, thank you
for choosing McDonald's.

Go ahead and order
whenever you're ready.

I'll have a Sausage McMuffin
with egg and cheese.

Woman:
Anything else?
That's it, thank you.

Warren:
Yeah, and I tell my wife
as I shave in the morning,

I say either $2.61,
$2.95, or $3.17,
(coins clinking)

and she puts that amount
in a little cup by me here

and that determines
which of three breakfasts I get.

Hi. 2.95.
Okay, 2.95.

There's the two.
How you doing, sir!

Hey, great!
You're on "Candid Camera"!

I see. Hello, everybody!
(both laugh)

Warren:
When I'm not feeling
quite so prosperous,

I might go with a 2.61,
which is two sausage patties,

and then I put 'em together
and pour myself a Coke.

(beeping)

Hi, how are you?
Hi. I've been good.

3.17 is a bacon, egg,
and cheese biscuit,

but the market's
down this morning,

so I think
I'll pass up the 3.17
and go with the 2.95.

♪ ♪

(faucet running)

Warren:
I like numbers.

It started before
I could remember.

(clicks, ticking)

It just felt good,
working with numbers.

I was always playing around
with numbers in one-way
or another.

And it was fun to have
a bunch of guys over

and have them betting
on which marble would reach
the drain first.

(clicks)

I had a lot
of energy as a kid.
(laughs)

I-- I was inquisitive,
and I was the youngest one

always in the class,
'cause I'd skip.

I've always been competitive.

(kids playing)

I liked to read
more than most kids.

I really like
to read a lot.

My Aunt Edie gave me
a copy of "The World Almanac"

and that was heaven to me.

And I can still tell you
that Omaha's population
was 214,006 in 1930.

Some numbers
just kind of stick with you.

And very early,
probably when I was
seven or so,

I took this book out
of the Benson Library

called "A Thousand Ways
to Make a $1,000."

And one of the ways
in this book

was having
penny weighing machines.

And I sat and calculated
how much it would cost

to buy the first
weighing machine,

and then how long
it would take for the profit

from that one
to buy another one,
and I would sit there

and create these
compound interest tables

to figure out how long
it would take me to have

a weighing machine
for every person in the world.

(thunks, clatters)

I had everybody
in the country weighing
themselves ten times a day,

and me just sitting there
like John D. Rockefeller
of weighing machines.

(chuckles)

The allowance
when I was a little boy
was a nickel a week,

but I liked the idea of having
a little more than a nickel
a week to work with,

and I went
into business very early.

I started selling Coca-Cola
door to door.

I sold gum door to door.

I sold
"Saturday Evening Post,"

"Liberty" magazine,
"Ladies Home Journal,"
you name it.

I think I enjoyed the game
almost right from the start.

But I like being my own boss.

That's one thing I liked
about delivering papers.

I could arrange
the route I wanted.

Nobody was bothering me
at 5:00 or 6:00 in the morning.

(bicycle bell chimes)
I was delivering
500 papers a day,

and I made a penny a paper,
but in terms of compounding,

that penny's turned
into something else.

♪ ♪

(scraping)

Einstein is reputed to have said
that "Compound interest"

is the eighth
wonder of the world"
or something like that,

and it goes back to that story
you probably learned when
you were in grade school

where somebody did
something for the king,

and the king said,
"What can I do for you?"

And he said,
"Well, lets take a chessboard

"and put one kernel of wheat
on the first square

"and then double it
on the second

and double it on the third."

And the king
readily agreed to it,
and by the time he figured out

what two to the 64th
amounted to,

he was giving away
the entire kingdom.

So it's a pretty
simple concept,
but over time,

it accomplishes
extraordinary things.
(elevator beeping)

(elevator dings, doors open)

Berkshire is an amazing company.

Fourth largest company
in the "Fortune" 500.

He is the only person
who has ever, from scratch,

built a company
that is in the top 10
of the Fortune 500.

(microwave opens, closes)

(beeps, humming)
(phone rings)

Woman:
Berkshire Hathaway.
Fine, thank you.

Warren:
Well, Berkshire is
a holding company of sorts.

It owns a large number
of separate businesses

that operate
independently of each other

and, to a great extent,
from the parent company,
Berkshire Hathaway.

(man speaks indistinctly
on TV)

All right, well,
we're going to get
more from you in a second.

Warren:
So we have maybe 70,
maybe 80 businesses,

and we ask them
to behave in a way

that doesn't hurt
our reputation

at Berkshire Hathaway,
but they run their own lives.

Other people do most
of the decorating in the office,
so various things come in.

Originally,
when I moved in in 1962...

you can see this--

I went down
to the South Omaha Library,

and I think for a dollar,
I got seven copies

of old "New York Times"

from big times like
the Panic of 1907.

This is one--
1929 obviously.

But I wanted
to put on the walls

days of extreme panic
in Wall Street,

just as a reminder
that anything can happen
in this world.

I mean it--

it's instructive art
you can call it.

♪ ♪

I was born in 1930
here in Omaha, Nebraska,

during the stock market crash.

My dad lost his job in 1931,
a year after I was born.

He was a stock salesman,

and he had what little savings
he had in the bank,

and so he started
his own company.

He worked right through
the depression.

♪ ♪

Bertie Buffett:
He had an investment company,

and as an adult
when I looked back,

I thought, "Wow, did that ever
take a lot of nerve."

Sometimes we'd
go down there on Sunday,

and we could play
with the adding machine.

My brother and I tended
to play the games together.

And I remember
at one point he said to me,

"I'm going to be
a millionaire by the time I'm...
30," or something like that.

It was totally
outside of anything
my family had experienced,

but he just was
unusual that way.

Doris Buffett:
Well, I was the oldest,

and then my brother
and then my sister.

And my father would go
to New York periodically

to check on businesses,
stocks, and things like that,

and he'd come back,
he'd always have a costume

for each of us,
and Warren loved it.

He was very good-natured.
He was quiet.

It was hard to tell
he was a genius at that point,

but I mean,
who was looking?

(clock ticking)

Warren:
The first books
I read on investment

were actually
in my dad's office.

(clock chiming)

Pretty soon, I read
all the books in the office

and read some of them
more than once.

My dad had
various nicknames for me.

He'd call me
"Fireball" sometimes,

because I'd start
little businesses.

He didn't care
about money at all.

He believed very much
in having an inner scorecard

and never worry
about what other people
are thinking about you.

You know, just-- just--

if you know why
you're doing what you're doing,
that's good enough.

I admired everything
about him to the extent

that I was absorbing lessons
from him without knowing it.

And the idea that all lives have
equal value is something that

all three of his children
felt since I can remember.

(patriotic music playing)

My dad at one point
ran for congress

when I was 12 or so.

It was
a very republican household.

I campaigned for him.
My sisters campaigned for him.

The whole family did.

My mother was
very, very bright,

and she was very gregarious.
She was a good campaigner
for my dad.

Bertie:
She had a lot of ambition,

and I think
my brother Warren got a lot

of his extreme competitiveness
from my mother, actually.

Doris:
She was brilliant at math.

You know, I guess
they still had these things

where you crank them
and things added up,

and she could
add it in her head faster
than the machine could do it.

She was
absolutely amazing in that.

Warren:
She was very dutiful
about taking care of the kids,

but you didn't get
the same feeling of-- of love.

It was there, but it just--
it didn't come out the same way
as with my dad.

Howard Buffett, Sr. on radio:
In the nation, the only
permanent way

to prosperity is
a balanced budget.

Unless that goal
is achieved,

all post-war plans will collapse
like Hitler's conquest.

Man on radio:
You have heard Congressman
Howard L.H. Buffett,

a Republican member
of the House of Representatives

from Nebraska
speaking on the--

Warren:
When I was about 12 or 13,

we moved to Washington,
my family, and I was mad.

I was having fun in Omaha,
and I lost all my friends,

and now I moved to a town
where they were all strange,

and so I was very,
very unhappy.

♪ ♪

At school,
I just lost interest.

I took pleasure
in tormenting my teachers.

At that time for example,
AT&T was the stock

that all teachers owned
for their retirement,

and I decided
that it would drive
my teachers a little crazy

if I went and short the stock,
because when you go
short a stock,

you're betting
that it will go down.
(school bell rings)

So I shorted
10 shares of AT&T,

(chuckling)
and then brought
the confirmation to school

and showed these teachers
I was shorting the stock.

They found me
a big pain in the neck,

but they did think I knew
a lot about stocks.

♪ ♪

And then at home,
my mother would have
terrific headaches,

and you didn't want
to be around her when she was
having the headaches,

and she would--
she would lash out more.
She would never do it in public.

Doris:
Well, I think
we were terrified of her.

♪ ♪

When I'd wake up
in the morning,

I'd listen to hear her voice.
I could tell by her voice

if it was going to be
a terrible day or not.

Warren:
When she got difficult,
the three children felt it.

When I was at the low point,
sort of, I decided that
I would run away.

So I talked two other guys
into running away with me.

We went out,
and we start hitchhiking...

and then we got picked up
by the highway patrol

and that scared
the hell out of us.
(police radio chatter)

It's very interesting.
My dad never really gave me
hell about doing this,

but he finally said,
"You know,"

he said,
"you can do better
than this."

And just saying that,
I mean, I--

I felt like I was
letting him down, basically.

So in all ways,
he was teaching me.

Never taught
by telling me things,

he just taught by example.

He had unlimited
confidence in me,
even when I screwed up,

and that takes you
a long, long way.

The best gift
I was ever given

was to have the father
that I had when I was born.

I didn't want to go to college.
I was 16 when I got out
of high school

and I was buying stocks.

I mean,
I actually was having
a pretty good time

and I didn't see that really
was much to be gained
by going to college,

but my dad
kind of jollied me into it.

♪ ♪

Doris:
He had a roommate
who was a friend of mine,

and the roommate said
it would just drive him crazy,

because he studied
all the time,

and Warren would come in
15 minutes before the exam

and just ace his way
through it.

Warren:
I finished in three years,
'cause I had enough credits,

and I was in a hurry.
I wanted to get out.

(birds chirping)

Warren:
When I got out
of the University of Nebraska,

I applied
to Harvard Business school.

They told me
I was to get interviewed
in a place near Chicago.

I got there,
and he interviewed me
for about 10 minutes,

and he said, "Forget it."

(laughs)
"You're not going
to Harvard."

And so now I'm thinking,
"What do I tell my dad?

Oh, this is terrible."
And it turned out to be

the best thing
that ever happened to me.

Later that summer,

I was looking
through a catalog

and in the catalog,
it had these names of people
that were teaching,

and one was Graham
and another was Dodd.

I had read this book
by the two of them,

so I wrote him a letter
in mid-August,

and I said,
"Dear Professor Dodd,"

I said, "I thought
you guys were dead."

(students laugh)
"But, now that I found out
that you're alive

and teaching at Columbia,
I would really like to come."

And he admitted me.
So, you know what?

That-- it just shows,
you never can tell.

♪ ♪

Man:
Gentlemen,
Professor Graham.

Warren:
Ben was
this incredible teacher.

I mean he-- he was a natural,
and he drew us all in.

Are Wall Street professionals--

they more accurate
in the shorter term
than the long term forecast?

Well, our studies indicate
that you have your choice
between tossing coins...

and taking the consensus
of expert opinions,

and the results
are just about the same
in each case.

(people laugh)

Warren:
It was like learning baseball

from a fellow
who's batting .400.
(laughs)

It really-- it shaped
my professional life.

There are two rules
of investing according
to Warren,

and he learned this
from Ben Graham.

♪ ♪
(clicking)

Rule number one,
never lose money.

Rule number two,
never forget rule number one.

Ben Graham basically coined
the term "value investing."

He believed
in careful scrutiny

of a company's
financial statements,

and that if you bought value,
it would eventually prove out.

A few years ago,
I went to Amazon,

and sure enough,
they had this manual there,

so while reliving my youth--
other guys were going to Amazon

and probably buying
old "Playboys" or something,

but I bought old
Moody's manuals instead,

and when I got out of school,
I started selling stocks,

(chuckles)
I was 20 years old at the time,

looked about 16,
and acted about 12,

so I was not the most
impressive salesperson
anybody ever met.

But what I would do was I went
through, page by page,

looking for possibly
undervalued stocks.

Peter Kunhardt:
Is this like going through
an old family album?

Better!
(both laugh)

♪ ♪

When I got out
of business school
at Columbia,

I developed
pretty decent skills
in terms of business,

but I hadn't
really come to terms
with the world exactly.

Kunhardt:
What were you like
around girls back then?

Bad. I was--
I was sort of out of the swing
of things there for a while.

I went to my 60th reunion,
and there was a girl there.

I took her out one time
to the Uptown Theater
in Washington,

and I asked her
whether she remembered
what movie we saw,

and she said,
"No, I don't remember that."

And then she said,
"But I do remember one thing."

And like an idiot,
I said, "What was that?"

And she said,
"Well, you picked me up
in a hearse."

And it was true
that I owned

a half-interest in a hearse
while I was in high school,

which was not
the smoothest thing that--

or coolest,
as they would say now--

that you could--
you could do on a date.

There were
two turning points
in my life.

Once when
I came out of the womb,

and once when I met
Susie, basically.
(laughs)

♪ ♪

She was the girl, yep.

But it took her
a little longer

to figure out
I was the boy.
(laughs)

Susie Buffett:
I was going to be

his youngest sister's roommate
at Northwestern.

So I walk into their house,
he was sitting in this chair,

and he made
some sarcastic quip.

So I made one back.
I thought, "Who is this jerk?"

♪ ♪

And that's how we met, yes.

Listen, Warren is smarter
than you even know.

His brain is going
all the time.

And my dad said to me,

"Now you have
to understand about him--

"you're not going to have
discussions with him

"like you would
most normal people,

but he has
a heart of gold."

He was just
totally enamored of her,

and why not?
And she of him.

She'd sit
on his lap all the time,
and he'd stroke her hair.

It was softening him.

Susie was
really kind, considerate,

and she was
the balancing force.

Warren:
I just got very,
very, very lucky.

But I was
a lopsided person,

and it took a while,
but she just stood there

with a little watering can

and just nourished me along
and-- and changed me.

♪ ♪

Somebody once said
that the chains of habit

are too light to be felt
until they're too heavy
to be broken.

I had been terrified
of public speaking.

I couldn't do it.
I'd throw up.

And I knew
if I didn't cure it then,
I'd never cure it.

♪ ♪

And so I saw
an ad in the paper
for the Dale Carnegie Course,

which worked
on developing your ability
to speak in public,

and I went down there.

Dale Carnegie:
Be sincere.

A good smile
has the same effect

as a puppy's tail.
When a puppy wags--

Warren:
They made us do
all these crazy things

to get out of ourselves,
and so we stood on tables

and did all kinds of things.

(indistinct chatter)

(applause)

Warren:
If I hadn't had done that...

my whole life
would have been different.

So in my office
you will not see

the degree I got
from the University
of Nebraska.

You will not see
the Masters degree I got
from Columbia University,

but you'll see
the little award certificate

I got
from the Dale Carnegie Course.

As a matter of fact,
every week,

the instructor
would give a pencil

to whoever had
done the most with what
we'd learned the week before.

And so in the fourth
or fifth week,

I proposed to her mother,

and she said yes.
And so that week,

I won the pencil,
I also got engaged,

and it was
an incredible week.
(all laugh)

♪ ♪

Warren:
The wedding date
was kind of interesting,

because I couldn't see
anything without my glasses,

and I was
so nervous that I--

I just decided
to take off my glasses

and I wouldn't be able to see
all those people out there.

♪ ♪

She was 19
when we got married
and I was 21...

but she was so much
more mature than I was.
There was no comparison.

She was a better person
than I was...

but when you get married,
it's not a question of saying,

"I'm going to put
a 14% factor in for humor,

and 17% for intellect,
and 22% for looks."

It doesn't work that way.

I knew it was
the right decision,
and-- and it was.

(bells tolling)

Woman:
You could live
anywhere in the world.

Why do you choose
Omaha, Nebraska?

Yeah, I love it, and I--
you know, I was...

born about a mile from here
and, you know,

I've never had
a bad experience
in Omaha.

♪ ♪

Well, Omaha and Nebraska
are home to me.

Everything about it
seems like home.

It's a pace,
it's relationships.

There's a lot of continuity.
There's a lot of community.

There's a lot
of friendship.

It's a very solid place
and friendly place

in which to grow up in,
in which to conduct a business.

When I came back
to Omaha in early 1956,

I had no idea
what I was going to do.

A few months after I came back,
some members of the family said,

"What should we do
with our money?"

And I said, "Well,
I'm not going back"

"in the business
of selling stocks,

but if you would like
to join me in a partnership,"

I said,
"I'll be glad to do it."

So within a couple of months
after coming back,

I set up
the first partnership.

♪ ♪
(ticking)

I wrote
all the checks individually.

I filed
11 income-tax returns.

I took delivery
on stocks for all these
different companies.

I-- I was
a one-man band there
for six years.

Sandy Gottesman:
Warren would sit upstairs
in his little office there,

and I would bring up
the name of a company,

and most of the time he knew

much more than I did
about the company.

He'd know how many shares
were outstanding.

He'd know the capitalization.
He'd know the earnings.

It was absolutely incredible.

I mean when
Warren said something,
it meant a heck of a lot,

and I think all of us paid
a lot of attention to Warren

when he took
a definite stand
on something.

Charlie Munger:
When I first met Warren
back in 1959,

I recognized immediately

that he was
a very intelligent person.

For the last four
or five years,

the stock market
has been booming along

and presumably
forecasting better business,

which has really
not materialized,

so maybe the stock market
is really correcting

a previous
incorrect forecast
this time

rather than making
a new correct one.

He made a lot of money
buying thinly traded securities

that were incredibly
cheap statistically.

♪ ♪
(lighter flicks)

(cigar sizzles)

Loomis:
Warren was, at that time,

dealing with small companies,

and his investments often were
to buy a company

that you could figure was
a discarded cigar butt,

but it had
one more smoke in it,

and he wanted
to buy at the right time

to be able to benefit
from the one smoke.

The first partnership
started with $105,100.

I put up the 100,
and the other people
put up the 105,000.

And then at the start of 1962,
I moved to Kiewit Plaza.

And by the time I moved
to Kiewit Plaza,

we had $7 million invested,

and a fair amount
was profits.

♪ ♪
(birds chirping)

I was then renting a house.
I never owned a house
to that point.

And then two years later,

I bought the house
I live in today in 1958.

We had three children,
Susie and I.

And we had 'em young,
incidentally,

which was I think was
a very good thing.

♪ ♪

My daughter Susie
was born here.

I named her Susie
just like that, as soon
as I looked at her,

because she looked
just like her mother,

♪ ♪

And she was a cinch.

And then Howie was,
you know, this absolute
bundle of energy...

which made things
very difficult

for big Susie
for a while.

Peter again reverted back
to Susie's personality,

and he was an easy child.

Howard Buffett:
Well, I would describe
my childhood as normal,

but who knows
what normal is?

People often think,

"Well, Warren Buffett was
this famous rich guy."

He was not famous,
and he wasn't rich

when we were growing up.

♪ ♪

What I saw first and foremost,

day in and day out,
was consistency.

Every day we hear
the garage door close
in the house

and then like clockwork,
my dad would come in the door,

"I'm home!" and we'd
all eat dinner together,

which I think surprises
a lot of people.

Susie Buffett, Jr.:
My dad, he used to rock me
to sleep at night

and sing "Over the Rainbow,"
so I have

this insanely sentimental
attachment to that song.

I've always had a really close
relationship with him.

♪ ♪

Warren:
I've got three
very different kids,

and they've got
a common heart,

which they got
from their mother.

She did most
of the work by far

of bringing up
the children,

which is probably
a good thing.

(laughs)
They have more
of her qualities than mine,

which I would--
I would recommend.

Howard:
Well, my mom was

the biggest part
of my life growing up...

even though I got disciplined
on a regular basis

and she was usually
the one doing it,

she was still
my best friend.

She was somebody
who would help anybody,

I mean,
whether she knew 'em
or didn't know 'em

or maybe even
didn't agree with them,
she would still help them.

Warren:
She was incredibly empathetic,

and she was interested
in every person individually.

She never cared about money
or business at all.

Susie:
I mean he would
go around saying,

"I'm going to be
the richest man
in the world."

And I think, well,
it's like somebody says,

"I play music,
and I'm gonna be Mozart."

I don't know.
How does anyone know...

How does anyone know?
You know?

So that was okay.
I don't really care
about that.

Loomis:
I would say
that Susie led Warren

toward changing
his political views.

He grew up
as a young Republican,

his father was
a Republican congressman,

but Susie saw things
in different ways.

She was the catalyst.

(crowd chanting)
Freedom, freedom, freedom!

(man shouts) Louder, louder,
louder, louder, louder!

Freedom, freedom...
(man shouts)
What do we want now?

Susie:
When the children
were growing up,

I was very involved
in civil rights.

I was immersed in it,
and I think that's what
made Warren a Democrat.

He would go with me
to hear speakers.

(applause, cheers)

Warren:
I remember that speech
that Martin Luther King gave.

That was one
of the most inspiring speeches
I-- I've ever heard.

I come to say to you
this afternoon...

Warren:
Took me right out of my seat.
My wife was with me.

We both had
the same experience.

Martin Luther King:
It will not be long.
It was interesting, he--

in that speech,
he talked about truth forever
on the scaffold,

long forever on the throne,
but that scaffold sways
the future.

Well, he was going
to be dead in six months,

but that scaffold
did sway the future.

My wife was
more active than I was,

but I was 100%
with her mentally.

I was just
working a little more
on my own investments.

But it didn't make a difference
what we were gonna do

with the money
after we made it.

I thought
I would pile it up
over the years

then she would unpile it
in terms of running a--

one very large foundation.

And I was particularly good
at compounding money,

and therefore society
would benefit by waiting.

♪ ♪

I was genetically blessed
with certain wiring

that's very useful
in a highly-developed
market system

where there's lots
of chips on the table,

and you know, I happen
to be good at that game.

(scratching)

Ted Williams wrote a book
called "The Science of Hitting,"

and in it he had a picture
of himself at bat

and the strike zone broken
into, I think, 77 squares.

And he said,
if he waited for the pitch

that was really
in his sweet spot,
he would bat .400

and if he had
to swing at something
on the lower corner,

he would
probably bat .235.

And in investing,
I'm in a no-called
strike business,

which is the best business
you can be in.

I can look
at a thousand
different companies,

and I don't have
to be right on every one
of them or even 50 of 'em...

so I can pick the ball
I want to hit.

(baseball bat cracks)
(crowd cheering)

And the trick in investing is
just to sit there and watch
pitch after pitch to go by

and wait for the one
right in your sweet spot.

And the people that are yelling,
"Swing, you bum"? Ignore 'em.

There's a temptation
for people to act

far too frequently in stocks,

simply because
they're so liquid.

Over the years
you develop a lot of filters,

and I do know what I call
my circle of competence,

so I-I-- I stay
within that circle,

and I don't worry about things
that are outside that circle.

Defining what your game is,

where you're
going to have an edge
is enormously important.

(film projector clicking,
beeping)

♪ ♪

I bought the first shares
of Berkshire in 1962,

and it was
a northern textile business

destined to become
extinct eventually,

and it was
a statistically cheap stock
in a terrible business.

Berkshire Hathaway
was closing mills

and as they closed mills,
it would free up some capital,

and then they would
repurchase shares,

so I bought
some stock with the idea

that there would be
another tender offer
at some point,

and we would sell the stock
at a modest profit.

And at one point,

the management
asked me at what price
we would tender our stock,

and I said, "$11.50."

♪ ♪

And the tender offer
came out a few months later,

and it was
at $11 and 3/8ths,

which was an eighth
of a point cheaper.

And that made me very mad,

so I just started
buying more stock.
(laughs)

I just felt that
I'd been double-crossed
by the management.

And in May of 1965,

I bought enough
so we controlled
the company,

and we changed
the management.

It was a pretty silly way
to behave,

as Warren has recounted
in retrospect.

One of the reasons
Warren is successful

is he's brutal
in appraising his own past.

He wants
to identify misthinkings
and avoid them in the future,

but it was
an accident that he chose
Berkshire Hathaway.

If the chairman hadn't tried
to cheat him out of an eighth,

there wouldn't
have been any Buffett-
Berkshire Hathaway history.

Warren: If you're
emotional about investment,
you're not going to do well.

You may have
all these feelings
about the stock.

(chuckles)
The stock has
no feelings about you.

Looking back,
it's interesting,
that tender offer--

I didn't realize it, but it--
it happened about five days
after my dad had died

and whether
that had affected me
or not, I don't know.

♪ ♪

Kunhardt:
Do you remember your last
conversation with your father?

Yeah, but I don't want
to talk about it.

Munger:
I think it just sobered him
and hurt him,

but...

Warren soldiers on.

Both Warren and I
could look at our fathers

and see what they did right
and what they did wrong.

Warren's father was
a real old-fashioned
right-wing ideologue.

And his father was
so intense about it,

that Warren just decided
that it was mistake--

it cabbaged up your head
to be that much an ideologue,

so he loved his father,
but he didn't want to become

that much
of a true believer in--
in anything.

My politics became more overt
after my dad died.

♪ ♪

Civil rights
changed my views.

You know, in 1776
Thomas Jefferson wrote,

"All men are created equal,"
and then when they wrote
the Constitution,

they all of a sudden
decided that, no,

it was just 3/5ths of a person
if you were black.

I mean, that struck me
as kind of crazy.

♪ ♪

Susie:
I was talking to him one day
about some racial issue,

and he said to me,
"Wait till women discover

they're the slaves
of the world."

Now how many men
were cognizant of that,

and even women then?

Warren:
The initial example
is really my mother.

She came from a generation

where the main function
of the wife

was to help
her husband in the job.

And my sisters are
fully as smart as I am.

They got better personalities
than I had,

but they got the message
a million different ways

that their future
was limited,

and I got the message
that the sky is the limit

and it wasn't due
to a lack of love
or anything of the sort.

It just--
it was the culture.

On the other hand,
you can look

at the flip side of that
and say it's quite encouraging,

because if you look at what
this country accomplished

only using half of its talent,

just think of the potential
for the future.

I'm enormously bullish
on America over the future

and part of the reason
is that we,

by some rather
stupid decisions,

essentially put
half our talent
on the sidelines.

Loomis: Warren is probably
the most rational person
I've ever met.

Charlie Munger
would be a close rival.

And Charlie became a man

that Warren
depended on heavily

and I think his first
experiences

in the discarded-
cigar-butt era

convinced him that it was not
exactly where he wanted to be.

Munger:
He made so much money
for so long

doing what he'd been taught
by Ben Graham,

which he'd buy
these very cheap stocks.

If they were cheap enough,
he didn't care it was

a lousy company
and a lousy management.

He knew he was going
to make money anyway,
just because of the cheapness.

Warren:
Charlie Munger has had
a big impact on me

in moving me toward looking
for wonderful companies
at fair prices

rather than fair companies
at wonderful prices.

That was enormously important,
because it enabled Berkshire
to scale up in a way

that would
have been impossible
to do otherwise.

Yep?
Man:
What are the key indicators

you'd look for within companies
before making an investment?

Well, I look for something
that does give them
a moat around it.

♪ ♪
(water sloshing)

We have a company
called See's Candies
out on the west coast.

See's Candies
Boxed Chocolates.

If you give a box
of See's chocolates
to your girlfriend

on the first date
and she kisses you?
(giggles, kisses)

We own you.
You know? I mean we--

we can raise
the price tomorrow.

I mean,
you'll buy the same box.

You're not gonna
fool around with success,

so the key there
is the response.

You do not want to get home
on Valentine's Day

and say to your wife
or your sweetheart--

preferably they're
the same person--

you don't say, "Here, honey,
I took the low bid."

It doesn't work.

Price is--
to a degree,
is immaterial.

If you've got
an economic castle,

people are gonna come
and wanna take that castle
away from you.

You better have
a strong moat.

You better have
a knight in the castle
that knows what he's doing.

You're not buying an asset,

you're buying a name,
you're buying a brand,

you're buying
a real franchise here,

and Charlie was more responsible
for that than anybody.

♪ ♪

Warren:
We were mental partners

right from the moment we met.

Woman: I wanna know,
going back 50 years,

what it was like
when you first met Warren.

Well, I thought
he was a prodigy...

and I got a lot
of criticism.

My wife said,
"Why are you paying
such enormous respect

"to that young man
with a crew cut

who won't eat vegetables?"
(all laugh)

Warren:
He's ungodly smart.

He's got a much broader
intellect than I do,

and he's magnificent
at being able

to condense important ideas
into just a very few words.

If you're not interested
in the economic scene right now,

you're mentally dead.

Charlie has no tact.

Woman:
All right, let's talk
a little bit about bankers.

Charlie, on Friday,
compared them to heroin addicts.

Yeah, well,
that's colorful Charlie,

but I would not
have chosen that.

Loomis:
I once wrote of him

that when
they handed out humility,

he didn't get
his fair share.

The ideal way
to run a headquarters
is to have one man,

preferably over 80,

sitting in an office
by himself.

Anything else
is pure frippery.

Warren:
He's always honest
in what he tells me,

so I-- I listen to him.

Munger:
We never had an argument.

We just...

We just kinda
roll with it easily.

Suppose Warren
doesn't wanna do something
that I would've done,

and suppose
that happens four times
over 40 years or something.

What the hell difference
does it make to me?

♪ ♪

Net, the record is
working out is fine.

Both of us know
that we've done better
by having ethics.

Warren's not interested

in making money
by cheating people.

(chattering)
(phone ringing)

Loomis:
Warren's opinions

of Wall Street
investment bankers

would not endear him
to their mothers.

He feels that they're,
for the most part,

not out for their clients.

They're out for their own
business interests.

Warren:
In the late 1960s,
there were just a flood

of accounting
shenanigans and mergers

built upon false accounting
and misleading people.

It was a time
when a lot of charlatans

were prevailing in Wall Street

and were being applauded
by Wall Street.

I understood what
the game was about,

but I didn't want
to play in it,

so I closed down
the partnership
at the end of 1969,

and I took on
the title of Chairman
for Berkshire Hathaway.

♪ ♪

Munger: Well, I think
the modern Berkshire

is pretty much
all a reflection of Warren.

♪ ♪

I have constructed
a business that fits me.

It's kind of crazy
to spend your life painting

if you're painting a subject
you don't want to look at.

I've gotten to paint
my own painting in business

on an unlimited
canvas in a way.

It's a different
sort of place.

I work
with a great group
of people

that make my life very easy
and that take good care of me.

Come. Okay.

We have 25 people
in the office,

and if you go back,
it's the exact same 25,
the exact same ones.

We don't have
any committees
at Berkshire.

We don't have
a public relations department.

We don't have
investor relations.
We don't have a general council.

We don't have
a human relations department.

We just don't go
for anything that people do
just as a matter of form.

It's exactly the life I like,

and it's not work to me.

It's just a form
of play, basically.

(crowd cheers, laughs)

(clock ticking)

Oh, I--
I like things quiet.
(chuckles)

I shut the door,
actually, at the office,

'cause I don't want to hear
anybody talking outside.

Woman on TV:
Broad distinctions
between his views

and the belt-tightening
proposals.

Warren:
And I still probably spend

five or six hours
a day reading.

Woman on TV:
...look at what's
trending today.

Our quick round-up...

Howard:
Well, what's amazing is
the stuff he remembers.

It's like a little computer,
you know?

I keep thinking the hard drive
will run out of space,
but it doesn't.

Melinda Gates:
He's one of the smartest
people we know.

So I was at a couple
of the family dinners

at the Gates house
where Mary, Bill's mom,

was trying to convince him
to come out

to the family place
at Hood Canal

to meet Warren Buffett,
and he was resisting

because he was
really busy with Microsoft.

And finally he said, "Mom,
okay, I'll come for lunch."

♪ ♪

Bill Gates:
So the two of us
flew out there

somewhat reluctantly,
'cause you know,

buying and selling stocks--
which is how I thought
of Warren--

wasn't of particular interest
to me and didn't seem
like value added.

It turned out
that was completely wrong.

We knew that day that
we'd be very close friends.

In fact, we just couldn't
get enough of each other.

♪ ♪

Warren:
Shortly after
I met Bill Gates,

Bill's dad asked
each of us to write down
on a piece of paper

one word that
would best describe what
had helped us the most.

Bill and I, without any
collaboration at all,

each wrote the word "focus."

♪ ♪
(scratching)

Well, focus has always
been a strong part
of my personality.

If I get
interested in something,
I get really interested.

If I get interested
in a new subject,
I want to read about it,

I want to talk about it,
and I want to meet people
that are involved in it.

Bill:
We both love to work hard.

You know, neither of us
like frivolous things.

You know he doesn't know
much about cooking,

or art, or... (chuckles)
a huge range of things.

I can't tell you the color
of the walls in my bedroom
or my living room.

(muffled)
We're on a satellite phone.

I don't have
a mind that relates
to the physical universe well.

Man:
Warren checking the DOW.

But the business universe I--
I think I understand
reasonably well.

Warren's ability
to size up people
and businesses,

it's a pretty magical thing.

He is the best at that,
anybody we know.
(laughing)

We-- we should all try to be
20% as-- as good at that.

Warren:
I like to sit and think,

and I spend
a lot of time doing that.

And sometimes it's
pretty unproductive but--

but I find it enjoyable
to think about--

particularly about--
about business

or investment problems.
They're easy.

It's the human problems
that are the tough ones.

Sometimes there
aren't any good answers
with human problems.

There's-- there's almost always
a good answer with money.

(chuckles)

(clock ticking)

(clock chiming)

♪ ♪
(chiming fades)

Susie:
He was sort of a genius.

I think sometimes
geniuses are,

by default,
lonely and isolated.

He was not
really well adjusted.

He was just this funny--

I mean, humorous guy
who maybe had a moat
around him,

because he was afraid
and he didn't know anyone

that he wanted to let in.

(faucet runs)

And to this day,
I mean, I don't know...

Well, nobody
knows him like I do,

and probably any wife
would say that, but...

♪ ♪

Howard:
He's a loner in a sense.

And it's difficult to connect
on an emotional level,

because I think that
that's not his basic mode
of operation.

He was there... physically,

but he was upstairs
reading all the time.

I always told my mother
we have to talk in sound bytes.
(chuckles)

I learned that early on,
that if you start going
into some long thing,

unless you've explained to him
ahead of time that it's going
to be a long thing

and you need him
to hang in there,
you lose him.

You lose him
to whatever giant thought

he has in his head at the time

that he was probably thinking
about before you came in

and really wants
to get back to.

♪ ♪

Peter:
He's not like
the rest of us.

I don't think
my dad ever took
anybody for granted,

but you are
a little bit blind, I think,

sometimes to what
other people might be doing
behind the scenes,

and my dad's gotten
a little bit of a pass.

♪ ♪

Susie:
Warren can't find
the light switch,

and it's probably my fault.

One time, years ago
when the kids were little,

I was feeling really sick.
I had the flu,

so I lay down on the bed,
and I said to Warren,

"Will you get me a pan?
Or something from the kitchen.

I may not get
to the bathroom.
I feel so sick."

He said, "Okay."
So he trottles down
to the kitchen,

and I hear this bang,
bip, boom, bang!

And he comes up,
and he brings me a colander.

I looked at it, and I said,
"Look, honey, this has
holes in it."

"Oh, oh, okay."
So he ran down,

all this banging
and everything.

And he comes up
and he puts the colander
on a cookie sheet.

Physical proximity
to Warren doesn't always mean
that he's there with you.

♪ ♪

He's so cerebral, you see?

That's why I learned
to have my own life.

We were
two parallel lines and--

but very connected when
he was open to connecting.

Susie Jr.: I did make
a joke at one point.
I said, you know,

we could make
a tape of Mom yelling,

"Bye, Warren,
I'll be back later!"

And then have the door slam,
and he would just think
she was here.

I don't think he knew
what she was doing
most of the time.

♪ ♪

Once Howie and I
were both gone,

as we've gotten older,
she started to see the writing
on the wall here

and just started
trying to figure out

how she could
at least have some more,

as she called it,
a room of her own.

♪ ♪

Warren:
The worst mistakes involve

not understanding other people
as well as you might.

(clock ticking)

Well, she left Omaha in 1977,

and there really isn't much
to say about that.

(wind blowing)
(rustling)

It was devastating for him,
and I came home,

because I-I-- I can't say
I was mad at her exactly,

but I kept thinking,
"How can you leave him?

He's so-- (laughs)
he can't function
by himself."

So my mother--
she'd asked a bunch
of her friends

to sort of look in on him,
and Astrid was one of them.

Susie:
So I called Astrid.
I said, "Astrid,"

"will you take Warren--
make him some soup?

"Go over there
and look after him,

because he's not
gonna make it."

And it took him
a while to figure it out,
but he figured it out.

I said, "I'm not leaving you,

because I'll be
wherever you want me
when you want me."

(gulls cawing)

Howard:
My mom moved to San Francisco,

and I think one
of the reasons it was important
for her to leave Omaha

was because she just felt
like she was kinda trapped
in this environment,

that everybody knew
who she was,

that she couldn't have
her own identity.

Peter:
He knew that there was
something she needed to do

and that she really recognized
that the money gave
us all and her

a choice in a lot of ways that
a lot of people didn't have.

Munger:
There was a time
Warren was getting criticized.

Here was this
very, very rich man who was
getting richer every year,

and really wasn't giving
a lot of money away,

and there was
terrific criticism
by some people,

which Warren never said
anything about.

Warren:
The biggest thing
in making money is time.

You don't have
to be particularly smart,
you just have to be patient.

Susie didn't want
to wait as much as I did,

but she never
quite appreciated
compounding like I did.

Susie:
That is
a disagreement we have.

I run a foundation now.

I think we should be
giving more money away,

but I understand
why we don't--

because it's... business.

To me the crux of it is,
that it wasn't the money itself.

You can see that
in the way he lives.

I mean, he doesn't buy
huge paintings

or build big houses
or anything like that.

It's all mental with him,
and the money is his scorecard.

♪ ♪

And he used to say to me,

"Everybody can read
what I read.

It's a level playing field."

And he loves that,
because he's competitive.

And he's sitting there
all by himself in his office,

reading these things
that everybody else can read,

but he loves the idea
that he's gonna win. Ha!

(clinking)

Munger:
I'll tell you
how you do it.

Have you ever seen a juggler

juggle 25 milk bottles?

How did
he ever get to do that?
(crowd cheering)

The answer is
he started with one bottle,
then two, then three

and just kept doing it,
and pretty soon he was at 25,

and that's the way we did it.

So, basically,
we started out with cash

and ended up buying
a bunch of businesses,

including insurance companies.

Loomis:
Insurance is, in itself,
a profitable business,

but it has
the additional advantage

of creating something
that's called "float."

Float is the money
that hangs around Berkshire

while a claim is waiting
to be paid.

And Warren turned out
to have a extraordinary ability

to use the money
thrown off by the float

to buy companies that fed
the growth of Berkshire.

Man:
In 1983, Mrs. B cashed in
on her business

by selling control
for $55 million

to a company owned
by investor Warren Buffett.

♪ ♪

Loomis:
Warren was quite an expert
about newspapers.

He got interested
in the "Post,"

because he recognized it

as a greatly
undervalued company.

Kay Graham:
He had to write me a letter.

"Dear Ms. Graham,
I've just bought 5%
of your company,

"and I mean you no harm,

"and I think
it's a great company.

"I know it's Graham owned
and Graham run,

and that's fine with me."

And I thought, "Whoa,
this guy's really terrific."

He used to come
to board meetings
with about 20 annual reports

and he would take me
through these annual reports.

It was like going
to business school
with Warren Buffett.

Kay Graham did introduce Warren
to the world of Washington,

entirely different group
than he had ever dealt
with before.

Peter:
It was clear
that working with Kay

gave him a different
kind of confidence,
and he was the star.

Woman:
Everyone wants to hear

what Warren Buffett
has to say.

Man:
The Oracle of Omaha

building his image
and having some fun.

♪ ♪

Man 2:
Berkshire shares
have increased

more than
2,000% in value.

Man 3:
One of the largest market
capitalizations in the world,

and it could grow
a lot larger

since Warren Buffett shows
no sign of slowing down.

Woman 2:
So how did he do it?

By investing
in what he knows
and understands--

good old-fashioned
American brands
like Coca-Cola,

Fruit of the Loom,
and Dairy Queen.

What inspired you?
This inspired me! (laughs)

Buy what you like,
is that what it is?
Yeah absolutely.

♪ ♪

Today, the Coca-Cola
Company will sell

almost two billion
eight-ounce servings

of one form or another
of Coca Cola products.

Now if you get
an extra penny a day,
a penny a serving,

that's $20 million a day,

that's $7.3 billion a year
from one penny more.

When you own Coca Cola,
you own a little piece

of the minds of billions
and billions of people.

That is really good.

♪ ♪
(clinking)

Man:
Who's got the most
$100 bills these days?

Well, his name
is Warren Buffett
in this country,

and he has just displaced
his friend Bill Gates

as the richest businessman
in the world.

And the purpose
of Wednesday's meeting
was to discuss

Buffett's company,
Berkshire Hathaway's plan

to purchase railroad giant
Burlington Northern,

valued at $26 billion.
This would be Buffett's
largest acquisition ever.

Munger: He's created Berkshire
from virtually nothing

into hundreds of billions
of dollars of market cap.

Nobody else has
a record like that.

Gottesman:
He wanted to have
an outstanding reputation

that he'd never
really upset the apple cart
when he bought a business,

that he kept
the management in place.

He was establishing
a reputation

that paid off later in life.

It's been
building and building
ever since I've known him.

Warren:
It takes 20 years
to build a reputation,

then it takes
five minutes to lose it.

♪ ♪

Loomis:
When Warren made
his investment in Salomon,

I was one of the people,
along with many, many others,

who were quite amazed,
because he had taken

a very critical tone in talking
about investment bankers
and about their greed.

And here he was
investing in one,

Salomon Brothers,
that was known to be
a member of the club.

Gottesman:
Warren and Charlie
were on the board,

and Charlie couldn't stand
what was going on there

and didn't like
the culture at all.

And shortly
after they got involved,
the thing exploded.

(phone ringing)
(clock ticking)

Warren:
In 1991 on a terrible day
in August,

I got a call,
and the two top officers
of Salomon

were on the other end,
and they said that--

that... "We have problem."

Announcer:
This is "NBC Nightly News."

Good evening.
It is the kind of scandal

that rocks Wall Street
and raises questions,

questions about the integrity
of our financial institutions.

Man: The giant securities firm
of Salomon Brothers
under investigation

for improper trading
of treasury bonds.

Man 2:
Salomon admitted
it exceeded the limit

of trading
in government bonds,

once by buying bonds
in the name of a customer

who didn't even know
about the deal.

Salomon Brothers
is under investigation
by the Treasury Department,

the Federal Reserve, the SEC,
and the Justice Department.

But more important than
the fate of the firm itself

is the impact
their actions could have

on the public trust
and on the credibility

of the American
market worldwide.

♪ ♪
(rain pattering)

Warren:
The company owed
$150 billion.

It owed more money
than any other private company

in the United States
at the time.

And that night I met
with the man that ran
the Federal Reserve of New York,

who was the sheriff
in effect, and I said, you know,

"I've never really owed
very much money before."

I said, "I've got
a little mortgage
on a house,

but 150 billion is
a little staggering."

And I was hoping he would say,
"Well, don't worry, Warren.

We'll give you
a few weeks to breathe."

And he-- he said to me,
"Prepare for any eventuality."

♪ ♪

Woman:
Earlier today,
the US Treasury Department

announced it had suspended
Salomon Brothers

from participating
in the auction of new issues.

Man:
It was one more jolt

for a scandal-scarred
Wall Street.

Loomis:
The Fed was
in effect saying,

"You're an evil force,
and we don't want you
trading our bonds."

(gavel pounds)

It was a huge turning point
for Warren.

And he believed that,
at that particular point,

his reputation
was on the line.

Gottesman:
Warren had 24 hours
to make up his mind

as to whether he was going
to go forward or just bow out.

And I think at that point,
Salomon Brothers could have
gone into bankruptcy.

And Warren stepped up
and took responsibility.

(people chattering)

Okay. I'm Warren Buffett.

I was... elected...

Interim Chairman
of Salomon, Inc.

a few hours ago at a board
of directors meeting.

Man:
Why was it necessary
for you to step in

and what is your mandate
of leadership?

I think that
it was necessary to step in

because I would do
whatever was needed,

dig out any bit
of information about what's
happened in the past,

and I would do everything
I could to make sure

that things
exactly right in the future.

Man 2:
Mr. Buffett,
are you satisfied that--

I had to convince the Treasury
that what was done in the past

was awful and stupid,
and they had every right
to be furious at us,

but this firm
employed 8,000 people,

and it was going
to go out of business

unless they let us
continue, basically.

♪ ♪

Warren believed that there was
a too-big-to-fail scenario.

The term was not used then,

but he believed
that Salomon was
too big to fail.

And if Salomon went down,

it would take
other important parts
of Wall Street with it.

♪ ♪

Warren:
We had this death knell
from the Treasury,

so I called the Treasury.

Nick Brady was
the Secretary.

I'm pleading for my life.

And I'm sure
my voice was cracking
and everything else,

and I said, "Nick, this is
the most important day
of my life."

And I really did feel
that it was going to be
a colossal disaster.

He wasn't sure
I was right at all--

in fact,
he probably thought
I was wrong--

but he knew that I felt
what I was saying.

So, the Treasury
modified its order,

and in effect, of course,

it was quite an endorsement.

It was huge.
(chuckles)

♪ ♪

Munger:
It saved Salomon.

Nick Brady went with Warren,
because he trusted him.

It shows how
having a good reputation
is really helpful in life.

(people chattering)

Warren:
I thank you for the opportunity

to appear
before this subcommittee.

I would like to start
by apologizing

for the acts that
have brought us here.

A nation has a right to expect
its rules and laws to be obeyed,

but I also have asked
every Salomon employee

to be his or her
own compliance officer.

After they first obey all rules,

I then want employees
to ask themselves

whether they are willing
to have any contemplated act

appear the next day
on the front page

of their local paper
to be read by their spouses,

children, and friends.

If they follow this test,

they need not fear
my other message to them:

Lose money for the firm,
and I will be understanding.

Lose a shred of reputation
for the firm,

and I will be ruthless.

I welcome your questions.

(birds chirping)

(chattering)

Warren:
It's been 50 years

since I formally took control
of Berkshire Hathaway,

and, step by step,
we've created something

that is kind of what I dreamt
we might create over time,

but it took a lot
of time to do it.

Never seemed like
we were making that much
progress on any one day,

but compound interest works.
(humphs)

Woman:
When you think
back 50 years ago

when you founded
this company,

did you ever imagine
it would be the fifth-largest
company in the world?

No, I-- I didn't,
but if I was thinking
about it,

I wouldn't have thought
in terms of being the fifth,

or the fourth,
or the third.

You would've wanted
number one.

Oh! I mean,
if you're gonna dream,
you might as well dream.

...two, three.
(cameras clicking)

(thudding)
Bill Gates wins.
Bill Gates wins.

Warren:
Well, a Berkshire Hathaway
shareholders meeting is

partly a fun festival.
It's sort of a Mardi Gras

for people
to come every year.
(chanting)

It's a chance for us
to have a lot of fun

and meet the people
that have entrusted us
with their money.

(chattering, cheering)

Munger:
Well, we used to have just
30 people in a cafeteria,

and now we have
this huge public spectacle.

(chattering)

Munger:
Celebration is
part of making

a group of people
work well together.

It's a celebration.

Warren:
♪ We are glad ♪
(guitar playing)

♪ You're here
at our meeting ♪

♪ Be sure to check out
our wares ♪

♪ We'll sell you See's Candy
and Dilly Bars ♪

♪ And insurance
for all of your cars ♪

♪ For its buy, buy,
buy all you see ♪

♪ At the Berkshire show! ♪

(flushes)

♪ ♪
(chattering)

Man:
All right! Woo!

He truly loves
to do what he does.

Love you, Warren!
(laughs)
Aw, yeah.

Loomis:
I think investors who own
Berkshire Hathaway,

they see themselves
as a part of a community.

Woman:
One, two, three.

There are more long-term holders
of Berkshire than any company.

People consider it a religion.

Man:
Okay, right here.
(laughs)

Warren:
They don't buy it
with the idea

they're gonna sell it
next week.

I think most of them buying it
with the intent of holding it
for their lifetime,

just like they'd buy a farm
or buy an apartment house.

At Berkshire, everybody gets
the same information

from the comprehensive
annual report.

We don't meet
with the analysts.

I'm not interested
in what an analyst thinks
about Berkshire.

I'm interested in what
the owners of Berkshire
think about Berkshire.

(chattering)

Munger:
He came out
of a private partnership

where people he knew
were trusting him.

And he had his relatives
in the partnership,

and they were not rich.

And as it got bigger,
he started treating

everybody else the way
he treated his relatives.

(chattering)

Warren:
In terms of our feeling

toward the people
who are shareholders,

we regard them
as our partners.

(cheering)
They're not some
faceless group of people.

And that's why
at the annual meeting,
I love seeing 40,000 of them.

It gives real meaning to what
we're doing every day.

Let's try.
♪ If you know... ♪

Men:
♪ Susie like I know Susie ♪

♪ Oh, oh, oh, what a gal ♪

We just have a lot of love
and respect for each other.

And that's never changed.

♪ Oh, oh... ♪
Susie: I don't go
to most things in Omaha,

because I think
Astrid lives there with him,

and that's for her to do.

And then we do
all kinds of things.

Susie Jr.:
Strange as it
may seem to people,

"I always think,
you know, "Who cares?

"If it's working
between the people
who are directly involved,

who cares
what anyone thinks?"

And my mother and Astrid
were very close, you know.

They really,
really loved each other,

and I think that my mother
was glad that she was there,

'cause she--
she loved my dad.

She wanted him
taken care of and happy,

and there's
no one better than Astrid.

She's just-- she loves
my dad. She wouldn't care
if he had one cent.

All:
♪ ...back where you belong ♪

Well, Astrid has lived
with me for a long time.

She's done wonders for me.

It worked well,
but I don't think it'll work

for lots of other people
necessarily.

Susie and I loved each other,
we admired each other,

and we were totally in sync
with what the other was doing,

but we were
two different individuals.

(waves crashing)
(gulls cawing)

♪ ♪

Susie:
The first time Warren
came out to San Francisco...

we took a walk,
and he looked around,

and he doesn't--
he's not very visual.

He was looking around,
and he said,

"This really is--
this is your city."

I am so drawn to color,
light, form, and nature,

that he thought
it was a good place for me.

Warren:
Over the years
I've developed

a better understanding
of human nature.

I can learn
a lot about investments
out of a book ,

but I don't think you can learn
as much about human beings.

You really need
some experiences,

and I'm wiser in that respect
than I was 40 or 50 years ago,

even though
I can't rattle off numbers

the same way
I used to be able to.

♪ ♪

Well, I think that what we do
reflects who we are,

and that's true for everybody
in this room.

And if you do the work I do,

you meet the best
human beings in the world.

People who
have made a choice

not to make money,
but to serve other
human beings.

I think it's the best kind
of life anyone could have.

I was with her in Arizona
at this "Fortune" Most Powerful
Women's Conference,

and she told me she had
a biopsy the day before,

and I didn't really think
much of it.

♪ ♪

Then we got home,
and the biopsy results
were not good.

It was stage four
oral cancer.

Howard:
I was on my way
to a board meeting in India,

and I remember
saying to her,

"I'll see you
when I get back."

And she rarely cried,

and she just
started crying and said,

"No, you need to stay here,

and you need to come out
for the operation."

Susie Jr.:
So we were all there,

and the day she was
going into the surgery,

that morning,
my dad...

It's funny, he--
there's some of it
he just can't--

you know, he just can't--

the thought
of something happening
to her was just, for him--

you know,
was just the worst thing
that could happen.

♪ ♪

Peter:
She knew it was going
to be really difficult.

She knew the recovery
was going to be brutal,

so I think that she had
that surgery for others.

(heart monitor beeping)

It was...
quite a big surgery.

She couldn't talk,
she couldn't swallow,
she couldn't eat.

But she came out,
and I really was with her

for the next
four months or so.

And my dad came out
every weekend.

♪ ♪

And in a few months
she was doing better.

She and my dad had gone
to Cody, Wyoming,

which they did every year
with a bunch of friends.

(phone ringing)

And my dad called.
This was, I don't know,
8:00 at night or something,

and he said,
"Something happened to Mom.

I'm in an ambulance.
You need to come."

Howard:
I actually thought something
had happened to my dad.

I don't know why I thought that,
but I-- I guess I thought

my mom had
had this recovery,

it was successful,
and why would anything
happen to her?

♪ ♪

It was horrible.

And a total shock.

You know, she'd been fine.

She'd been fine.
They went off to Cody,

she was fine,
and they were having dinner,

and you know,
she didn't feel well
after dinner,

(emotionally)
and... she had the stroke.

(heart monitor beeping)

We went into the hospital room,
and my dad was sitting there.

He'd been sitting there
all night, holding her hand.

I was so proud of him,

because when
it came down to it,

he knew what
he was supposed to do,

and he did it,
which was nothing.
(laughs)

♪ ♪

So my dad went to sleep,

and I sat with her.

And I just kept
putting my hand on her heart

to see if she was
breathing, and...

At one point, you know,
I didn't feel anything,

so I went out,
I got the nurse,

and I said,
"Can you come in here?"

And she said,
"No, she's gone."

So, I have to say one
of the worst moments of my life

was waking my dad up
to tell him that.

♪ ♪

Warren:
It's a very
strange thing, love.

You can't get rid of it.

If you try to give it out,
you get more back.

If you try
to hang onto it,
you lose it.

Susie...
really put me together.

She believed in me.

She-she-she--
she put me together.

And I would not only
have turned out to be
the person I turned out to be,

but I would not have--

I actually wouldn't
have been as successful
in business without that, and...

she made me more
of a whole person.

♪ ♪

Peter:
He went dark, essentially,
quiet and inward

for a certain amount
of time.

♪ ♪

You know, my dad is
a solitary guy,

and he had lived,
essentially, a solitary life
in a lot of ways.

I think it came down
to him figuring out

how he was gonna
get through this tunnel

and get out the other side.

In my head
at the time, I thought,

"God, I don't know
if he'll ever get out of bed."

But he did.

Welcome.
I'm Patty Stonesifer,

the CEO of the Bill
and Melinda Gates Foundation.

And we appreciate
you coming today,

especially since
I sent a very vague
and very late notice

to ask you to come
to a conversation
with Bill and Melinda

on the future on philanthropy.

So, lets get on with it.

I have the pleasure
of introducing a good man

whose great decision is
going to change the world,
Warren Buffett.

(applause)

♪ ♪

Man:
A remarkable decision tonight

from one of the richest men
in the world.

Mega-billionaire
Warren Buffett says

he is giving away most
of his fortune away
to charity.

Woman:
Buffett has pledged
to give away

the bulk of his fortune

to the Bill and Melinda Gates
Foundation

and giving more
than 15% of his money

to foundations started
by his three children
and his late wife, Susan.

Man 2:
One global health activist
called what Buffett did today

one of the most
remarkably selfless acts
that history will ever record.

That's a better hand than I get
at a Berkshire Hathaway meeting.
(laughter)

I'd like to thank you
for coming.

It-- it's a great day for me.
It's a great day for my family.

My wife Susie and I had planned
that whatever I made

would go back to society,

and, originally, I thought
she would outlive me

and that she'd make
a big decision on it.

But since her death,
I had to rethink

the best way to get
the money into society

and have it used
in the most effective way,

and I had a solution
staring me in the face.
(all laugh)

It was completely
out of the blue.
I mean amazing.

The largest single gift
ever given was

what he gave away that day.

I'd like to ask the people
representing those...

various foundations
to come out.

(applause)

The first three letters are
easy to sign, I just sign "Dad."

(laughter, applause)

♪ ♪

Howard:
When he wrote
the letter to us,

he put something
in that letter

that was
incredibly important to me,

which was exactly how
our foundation behaves,

which is,
if you're gonna try
to bat a thousand,

you won't do very many things
that are important.

But if you're willing
to basically strike out
a few times,

you can really change
something big.

I.C.C.N.! (laughs)
(people shout)

Warren:
Well, I feel terrific
about the fact

that my three children
each run a separate foundation

that combines
their special interests,

whether it's early education

or whether it's farming
in areas where people's
techniques for using

small plots of land could use
a lot of improvement.

All kinds of ways--
vaccines, you name it.

(speaking foreign language)

Man:
More powerful
than Buffett's gift

is the message he's sending
to other wealthy Americans,

that those who have
the least in this world

should benefit
from those who
have the most.

Warren:
In my entire lifetime,
everything that I've spent

will be quite a bit less
than one percent

of everything I've made.

The other 99% plus
will go to others,

because it has
no utility to me.

♪ ♪

So, it's silly for me
to not transfer that utility

to people who can use it.

It's doing me no good.

Susie Jr.:
I am so proud of what we do.

I almost cry
at every board meeting,

because I just think
she would be so proud.

And that is my biggest job,
in my opinion,

is to make sure
that every penny gets spent

the way she would
want it spent.

Susie:
Whoever you are in this life,
you don't want to think

you wasted a lot
of your energy, love,

and time
on something useless.

♪ ♪

I always thought
I'd marry a minister,
a doctor, or somebody

out doing
some valuable service

to human beings.

And the fact that
I married somebody who
makes just piles of money

is really the antithesis
of what I ever thought,

but I know what he is,

and... he is...

There's no finer human being
than who he is.

♪ ♪

Warren:
The truth is that I'm here

in my position
as a matter of luck.

Hey!
How are you doing, Grandpa?

Hey, Grandpa!
Okay.

Warren:
When I was born in 1930,

the odds were probably
40:1 against me being born
in the United States.

I did win the ovarian lottery
on that first day, and on top
of that, I was male.

Put that down
as another 50/50 shot

and now the odds are
80:1 against being born
a male in the United States,

and it was enormously
important in my whole life.

To think that that makes me
superior to anyone else

as a human being is just--
I can't follow that line
of reasoning.

Perfect!
Okay, good luck.

I think I was lucky
to have been standing
alongside Warren Buffett

while he was
becoming Warren Buffett.

He has developed
over the years.
He's broadened.

His values extend
through all of his life.

He wants to lead a life
that he and his father,

if his father
was still living,
would say was a good one.

♪ ♪

I think he's going
to end up in the history books
a hundred years from now.

I'm not sure what role
he's going to be assigned.

Will he be famous
for what he did as an investor

or as a philanthropist?

But Warren said
that his ambition in life
is to be a teacher.

Warren:
The world is
a great movie to watch,

but you don't want
to sleepwalk through life.

The important thing to do
is to look for the job

you would take
if you didn't need a job

and life is wonderful then.

I mean, you'll jump out
of bed in the morning

because you're really
looking forward to the day.

I have--
for over 60 years,

I've been able
to tap dance to work

just 'cause I'm doing
what I love doing and--

and I just feel
very, very lucky.

Okay, class dismissed.

(laughter)

♪ ♪

Night.

Kunhardt:
Do you fear death?

Warren:
No, I don't.

I've had a terrific life.
I feel-- you know,
it's gonna happen,

and I have no idea
what happens after it.

I'm an agnostic, so I--

you know, it may be
terribly interesting.

It may not be interesting
at all. We'll find out.

But physically,
I'm pretty well depreciated.

I'm getting down
to salvage value.

But it really doesn't make
any difference at all.

It doesn't interfere
with my work. It doesn't
interfere with my happiness.

It doesn't interfere
with my thinking.

♪ ♪

I don't feel any diminution
in my enjoyment of life

or enthusiasm
for life at all.

In fact, in a sense,
the game that I'm in

gets more interesting
all the time.

It's a competitive game.
It's a big game,

and I enjoyed
the game a lot.

(coins clinking)

♪ ♪

(scratching)

("Somewhere
Over the Rainbow" playing)

Warren:
♪ Somewhere over the rainbow ♪

♪ Way up high ♪

♪ There's a land
that I heard of ♪

♪ Once in a lullaby ♪

♪ Somewhere over the rainbow ♪

♪ Skies are blue ♪

♪ And the dreams ♪

♪ That you dare to dream ♪

♪ Really do come true ♪

♪ One day I'll wish
upon a star ♪

♪ And wake up where
the clouds ♪

♪ Are far behind me ♪

♪ Where troubles melt ♪

♪ Like lemon drops ♪

♪ Oh, way above ♪

♪ The chimney tops ♪

♪ That's where ♪

♪ You'll find me ♪

♪ Somewhere over the rainbow ♪

♪ Blue birds fly ♪

♪ Birds fly over the rainbow ♪

♪ Why then, oh, why can't I? ♪

(music continues)

♪ Somewhere over the rainbow ♪

♪ Blue birds fly ♪

♪ Birds fly over the rainbow ♪

♪ Why then, oh, why can't I? ♪

♪ If happy little bluebirds
fly beyond the rainbow ♪

♪ Why, oh, why ♪

♪ Can't I? ♪

Good night, Susan.