he’s the chairman CEO and largest
shareholder of Berkshire Hathaway he’s
considered to be one of the world’s most
successful investors if you want to
learn about investment strategies you
want to learn from Warren Buffett mentor
me Warren when you look at the future
there’s also the argument made that that
this is something that goes with your
philosophy today get out of cash and get
into assets because we don’t know what’s
going to happen to the dollar well cash
is always a bad investment but when
people said cash is king a year ago I
mean that’s crazy
I mean cash wasn’t producing anything
and it was sure to go down in value over
time I know that you always want to be
sure you have enough I mean it’s like
oxygen you’re one of the shirts around
you know but you don’t even have you
don’t have excess of a possible around
and cash we will always have enough cash
around but anytime we have surplus cash
around I’m unhappy I mean I would much
rather have good businesses than cash
and we found a chance in the last year
there abouts to deploy we came in with
something over 40 billion a campaign
we’ve got about 20 billion now and we’ve
had some earnings so we put a lot of
cash to work and I like that no I’d much
rather own a good business than have
cash and it is a hedge against the
dollar well you can say all assets are a
hedge against a dollar I mean but that
all you know is that the dollar is going
to be worth less 10 20 30 years from now
I say worth less not worthless but it
will be you know and that’s true of
almost every currency that like a big of
huh the question is how much it
depreciates in value but cash cash is
not a place that no why for that well
because always gonna be worth less
because we’ll we’ll print more of them
in relation to the amount of goods that
are moving you know if we if we dropped
if we drop the million dollars of cash
into every household in the United
States today everybody feel very good
except the people that invest in things
that were denominated dollars
yeah exactly there will be no tendency
toward deflation in this country over
time or virtually an attendance story
inflation absolutely important thing is
to decide what is to be able to define
which ones you can come to an
intelligent decision on and which ones
are beyond your capacity to evaluate you
don’t have to be right about thousands
and thousands of thousands of
competition you only have to be right
about a company couple I met bill gates
on July 5th 1991 we arrived Seattle and
bill said you’ve got to have a computer
and I said why and he said well he said
you can do your income tax on it I said
I don’t have any income Bircher doesn’t
pay a dividend he said well you can keep
track of your portfolio I said I only
have one stock I said I did I mean he
says it’s going to change everything and
I said well will it change whether
people chew gum and he said well
probably not and I said what will change
what kind of gum they’d show and I said
well then I’ll stick to chewing gum and
you stick to computers how bad I don’t
have to understand all kinds of but
there’s all kinds of business I don’t
understand but there’s thousands of
opportunities there I did understand the
Bank of America you know and uh and I’ll
be able I’m able to do that I’m able to
understand some given percentage but Ted
Williams wrote a book called the science
of hitting and in the science of hitting
he’s got a diagram shows him at the
plate and he’s got the strike zone
divided in the seventy seven squares
each the size of a baseball and he says
if I only swing it pitches in my sweet
zone which he shows there and he has
what his batting average would be which
is four hundred if he had to swing at
low outside pitches but still in the in
the strike zone
his average would be 230 he said the
most important thing in hitting is
waiting for the right pitch now he was
at a disadvantage because if the count
was oh and two or one and two or so on
even if that ball was down where he was
only about two thirty he had to swing at
it in investing there’s no called
strikes people can throw Microsoft out
and you know you name it any any stock
General Motors and I don’t have to swing
and nobody’s going to call me out on
call strikes I only get a strike call if
I swing at a pitch and mess so I can
wait there and look at thousands of
companies day after day and only when I
see something I understand and when I
like the price of which is selling then
if I swing if I if I had it fine if I
miss it’s it’s it’s a strike but it’s an
enormous ly advantageous game and it’s a
terrible mistake to think you have to
have an opinion on everything you only
have to have an opinion on a few things
in fact I’ve told students if when they
got out of school they got a punch card
with 20 punches on it and that’s all the
investment decisions they got to make in
their entire life they would get very
rich because they would think very hard
about each one and you don’t need 20
right decisions to get very rich you
know four or five will probably do it
over time so I don’t worry too much
about the things I don’t understand if
you understand some of these businesses
that are coming along and can spot
things on if you can spot on Amazon for
example I mean it’s a tremendous
accomplishment what Jeff Bezos has done
and I tip my hat to me is a wonderful
businessman he’s a good guy too
but could I have anticipated that he
would be the success and ten others
wouldn’t be I’m not good enough to do
that but I done fortunately I don’t have
to you know I don’t have to form an
opinion on on Amazon and I did I did
form an opinion on the Bank of America
and I form of opinion on coca-cola
I mean coca-cola has been around since
1886
there’s 1.8 billion 1.8 billion 8 ounce
servings of coca-cola products sold
every day now if you take one penny and
get one penny extra that’s 18 million
dollars a day and 18 million times 365
is 7 billion 3 less 730 billion or 6
billion 570 million dollars so annually
6 billion 570 million dollars from one
penny do you think coca-cola is worth a
penny more than you know Jo’s Cola I
think so so I
you know and I’ve got about 127 years of
history would indicate it so those are
the kind of decisions I like to make and
you may have an entirely different field
of expertise than I would have and
probably much more up to date in terms
of the kind of businesses that we’re
seeing about and you can get very rich
if you just understand a few of them and
understand their future the real test of
whether you would like it as an
investment is whether you would be happy
if it never got quoted again and just in
terms of what the asset did for you but
that doesn’t I would say this about gold
if you took all the gold in the world it
would it would roughly make a cube 67
feet on a side so if you took all the
gold in the world we could have a cube
we went down there 67 feet 67 feet high
and that would be the whole thing now
for that same cube of gold it would be
worth at today’s market prices about
seven trillion dollars that’s probably
about a third of the value of all the
stocks in the United States so you can
have a choice of owning a third of all
the stocks in the United States or you
can have a choice of owning a little
block of gold which can’t do anything
but kind of shine there and make you
feel like my desert Croesus or something
of the sort now for seven trillion
dollars there are roughly a billion farm
acres of farmland in the United States
they’re valued at about two and a half
trillion dollars it’s about half the
continental United States this farmland
you could have all the farm line in the
United States you could have about seven
Exxon Mobil’s
and you can have a trillion dollars of
walking-around money and if you offered
me the choice of looking at some 67 foot
a cube of gold and looking at it all day
you know I’m an attachment font fondling
it occasionally you know and then saying
you know do something for me and it says
I don’t do anything I just stand here
look pretty and
and the alternative to that was to have
all the farmland of the country
everything cotton corn soybeans seven
ExxonMobil’s just think of that and a
trillion dollars of walking-around money
I you know they maybe call me crazy but
haha I’ll take the farmland of the Exxon
Mobil’s what’s your advice about that
you can’t constantly sit there and wait
and say oh it’s going to go higher so I
go high we don’t even think about that
what we think about is how much is it
selling for how much do we think it’s
worth when we bought it at 35 billion
effectively I felt the company was
probably worth at least a hundred
billion how did it come to your
attention how do you find a stuff like
PetroChina I sit there in my office and
I read an annual report which
fortunately was in English and it
described a very good company and told
about the oil reserves followed by three
findings all about the chemicals
everything else and I sat there and read
it and I thought to myself this company
is worth about a hundred billion now I
didn’t look at the price first I look at
the business first and try and figure
out what it’s worth because if I look at
the price first I’ll get influenced by
that so I look at that look at the
company first I try to value it and I
look at the price and if the price is
way less than what I’ve just valued that
I’m going to buy it how do you value it
well I that’s that’s the trick but it’s
it’s essentially what I would pay for
the whole business if I could buy it how
do you know when to throw in the towel
on an investment or business when you
throw in the towel on an investment or
business business yeah well you’d what
you know you do it too late I’ve done I
I went the textile business by accident
in 1965 and I threw it at all about
twenty years later and that was about
twenty years too late the there’s a
great tendency to want to hold on
justify old decisions I mean it’s a
human human trait and what when you
really know you’ve got a bad business is
when you have a good manager and you’re
getting bad results I mean it when you
when you’re getting bad results with a
bad manager you still have to examine
the question of whether you know you can
get better results if you got a better
manager usually you can’t you know I’ve
said in the past you know that when a
when a management with a reputation
for excellence Encounters of business
with a reputation for bad economics it’s
the reputation of the business that
remains intact and and I’ve proved that
many times there are businesses that are
just plain tough you know and there’s
the copy there there may be too many
competitors but there’s reasons why they
don’t drop out there’s reasons well we
we started out in textiles and we made
over half of the the linings for men’s
suits in the country and we we went
through World War two and got awards and
and sears roebuck named us their
supplier of the year and all of that
sort of thing and then we’d say what
we’d like to increase the price of of
these linings a quarter of a cent a yard
and services we got of your miners ten
other guys that’ll sell it to us of the
old price that and nobody ever went into
a Sears store and said I’d like a a blue
Serge Serge a blue shirt Serge suit with
a half away lining it didn’t exist we
had no connection to the consumer and
there are lots of lousy businesses you
know and there’s lots of wonderful
businesses and or my job over the years
has been to try and figure out which is
which and I’ve made plenty of mistakes I
bought a company called extra shoes in
the early 90s I paid four hundred plus
million dollars for it and it made money
before I bought it
but you know as soon as I bought it they
pulled some switch or something I
immediately started losing money and and
it was because of foreign competition so
under it was because I owned I don’t
know ah and it went to zero and the
worst thing was that I paid for it in
stock so that 400 million in stock I
gave at the time is now worth about five
billion so it so every time Berkshire
stock goes down I feel a little bit
better because of my opportunity lost on
this business but you know when I looked
at Dexter shoe they had a good position
in retailers they turned out good shoes
they had a great workforce all kinds of
things but I just forgot one thing that
that they weren’t going to make shoes in
the United States anymore
so you make you make mistakes and it
does
okay to recognize quickly when you made
them if you’ve got a good person running
a business in it isn’t making any money
you know you’re in the wrong business
and and you’ve got to face up to that
generally speaking investing in yourself
is the best thing you can do anything
that improves your own talent so nobody
can take it away from me they can run up
huge deficits and the dollar can become
worth far less you can have all kinds of
things happen but if you’ve got talents
yourself and you’ve maximized your
talent you’ve got a terrific asset and
that does mean everybody should go to
college but it it doesn’t mean that any
way you find to improve communication
skills are enormous ly important I mean
I took a Dale Carnegie course that I
paid $100 for and it was worth a college
degree at least I thought it was maybe
this interview will cook a lot of ice
laughs thank you guys so much for
watching
I made the mentor me series because I
wanted to spend a little bit more time
with super successful people and I hope
some of their magic pixie dust rubs off
on us
so I’d love to know what you thought of
this video and what lessons you learned
that you’re going to apply to your life
and how I’m really curious to find out
leaving the comments below
I’ll join the discussion thank you so
much for watching you can you to believe
and I’ll see you soon
shareholder of Berkshire Hathaway he’s
considered to be one of the world’s most
successful investors if you want to
learn about investment strategies you
want to learn from Warren Buffett mentor
me Warren when you look at the future
there’s also the argument made that that
this is something that goes with your
philosophy today get out of cash and get
into assets because we don’t know what’s
going to happen to the dollar well cash
is always a bad investment but when
people said cash is king a year ago I
mean that’s crazy
I mean cash wasn’t producing anything
and it was sure to go down in value over
time I know that you always want to be
sure you have enough I mean it’s like
oxygen you’re one of the shirts around
you know but you don’t even have you
don’t have excess of a possible around
and cash we will always have enough cash
around but anytime we have surplus cash
around I’m unhappy I mean I would much
rather have good businesses than cash
and we found a chance in the last year
there abouts to deploy we came in with
something over 40 billion a campaign
we’ve got about 20 billion now and we’ve
had some earnings so we put a lot of
cash to work and I like that no I’d much
rather own a good business than have
cash and it is a hedge against the
dollar well you can say all assets are a
hedge against a dollar I mean but that
all you know is that the dollar is going
to be worth less 10 20 30 years from now
I say worth less not worthless but it
will be you know and that’s true of
almost every currency that like a big of
huh the question is how much it
depreciates in value but cash cash is
not a place that no why for that well
because always gonna be worth less
because we’ll we’ll print more of them
in relation to the amount of goods that
are moving you know if we if we dropped
if we drop the million dollars of cash
into every household in the United
States today everybody feel very good
except the people that invest in things
that were denominated dollars
yeah exactly there will be no tendency
toward deflation in this country over
time or virtually an attendance story
inflation absolutely important thing is
to decide what is to be able to define
which ones you can come to an
intelligent decision on and which ones
are beyond your capacity to evaluate you
don’t have to be right about thousands
and thousands of thousands of
competition you only have to be right
about a company couple I met bill gates
on July 5th 1991 we arrived Seattle and
bill said you’ve got to have a computer
and I said why and he said well he said
you can do your income tax on it I said
I don’t have any income Bircher doesn’t
pay a dividend he said well you can keep
track of your portfolio I said I only
have one stock I said I did I mean he
says it’s going to change everything and
I said well will it change whether
people chew gum and he said well
probably not and I said what will change
what kind of gum they’d show and I said
well then I’ll stick to chewing gum and
you stick to computers how bad I don’t
have to understand all kinds of but
there’s all kinds of business I don’t
understand but there’s thousands of
opportunities there I did understand the
Bank of America you know and uh and I’ll
be able I’m able to do that I’m able to
understand some given percentage but Ted
Williams wrote a book called the science
of hitting and in the science of hitting
he’s got a diagram shows him at the
plate and he’s got the strike zone
divided in the seventy seven squares
each the size of a baseball and he says
if I only swing it pitches in my sweet
zone which he shows there and he has
what his batting average would be which
is four hundred if he had to swing at
low outside pitches but still in the in
the strike zone
his average would be 230 he said the
most important thing in hitting is
waiting for the right pitch now he was
at a disadvantage because if the count
was oh and two or one and two or so on
even if that ball was down where he was
only about two thirty he had to swing at
it in investing there’s no called
strikes people can throw Microsoft out
and you know you name it any any stock
General Motors and I don’t have to swing
and nobody’s going to call me out on
call strikes I only get a strike call if
I swing at a pitch and mess so I can
wait there and look at thousands of
companies day after day and only when I
see something I understand and when I
like the price of which is selling then
if I swing if I if I had it fine if I
miss it’s it’s it’s a strike but it’s an
enormous ly advantageous game and it’s a
terrible mistake to think you have to
have an opinion on everything you only
have to have an opinion on a few things
in fact I’ve told students if when they
got out of school they got a punch card
with 20 punches on it and that’s all the
investment decisions they got to make in
their entire life they would get very
rich because they would think very hard
about each one and you don’t need 20
right decisions to get very rich you
know four or five will probably do it
over time so I don’t worry too much
about the things I don’t understand if
you understand some of these businesses
that are coming along and can spot
things on if you can spot on Amazon for
example I mean it’s a tremendous
accomplishment what Jeff Bezos has done
and I tip my hat to me is a wonderful
businessman he’s a good guy too
but could I have anticipated that he
would be the success and ten others
wouldn’t be I’m not good enough to do
that but I done fortunately I don’t have
to you know I don’t have to form an
opinion on on Amazon and I did I did
form an opinion on the Bank of America
and I form of opinion on coca-cola
I mean coca-cola has been around since
1886
there’s 1.8 billion 1.8 billion 8 ounce
servings of coca-cola products sold
every day now if you take one penny and
get one penny extra that’s 18 million
dollars a day and 18 million times 365
is 7 billion 3 less 730 billion or 6
billion 570 million dollars so annually
6 billion 570 million dollars from one
penny do you think coca-cola is worth a
penny more than you know Jo’s Cola I
think so so I
you know and I’ve got about 127 years of
history would indicate it so those are
the kind of decisions I like to make and
you may have an entirely different field
of expertise than I would have and
probably much more up to date in terms
of the kind of businesses that we’re
seeing about and you can get very rich
if you just understand a few of them and
understand their future the real test of
whether you would like it as an
investment is whether you would be happy
if it never got quoted again and just in
terms of what the asset did for you but
that doesn’t I would say this about gold
if you took all the gold in the world it
would it would roughly make a cube 67
feet on a side so if you took all the
gold in the world we could have a cube
we went down there 67 feet 67 feet high
and that would be the whole thing now
for that same cube of gold it would be
worth at today’s market prices about
seven trillion dollars that’s probably
about a third of the value of all the
stocks in the United States so you can
have a choice of owning a third of all
the stocks in the United States or you
can have a choice of owning a little
block of gold which can’t do anything
but kind of shine there and make you
feel like my desert Croesus or something
of the sort now for seven trillion
dollars there are roughly a billion farm
acres of farmland in the United States
they’re valued at about two and a half
trillion dollars it’s about half the
continental United States this farmland
you could have all the farm line in the
United States you could have about seven
Exxon Mobil’s
and you can have a trillion dollars of
walking-around money and if you offered
me the choice of looking at some 67 foot
a cube of gold and looking at it all day
you know I’m an attachment font fondling
it occasionally you know and then saying
you know do something for me and it says
I don’t do anything I just stand here
look pretty and
and the alternative to that was to have
all the farmland of the country
everything cotton corn soybeans seven
ExxonMobil’s just think of that and a
trillion dollars of walking-around money
I you know they maybe call me crazy but
haha I’ll take the farmland of the Exxon
Mobil’s what’s your advice about that
you can’t constantly sit there and wait
and say oh it’s going to go higher so I
go high we don’t even think about that
what we think about is how much is it
selling for how much do we think it’s
worth when we bought it at 35 billion
effectively I felt the company was
probably worth at least a hundred
billion how did it come to your
attention how do you find a stuff like
PetroChina I sit there in my office and
I read an annual report which
fortunately was in English and it
described a very good company and told
about the oil reserves followed by three
findings all about the chemicals
everything else and I sat there and read
it and I thought to myself this company
is worth about a hundred billion now I
didn’t look at the price first I look at
the business first and try and figure
out what it’s worth because if I look at
the price first I’ll get influenced by
that so I look at that look at the
company first I try to value it and I
look at the price and if the price is
way less than what I’ve just valued that
I’m going to buy it how do you value it
well I that’s that’s the trick but it’s
it’s essentially what I would pay for
the whole business if I could buy it how
do you know when to throw in the towel
on an investment or business when you
throw in the towel on an investment or
business business yeah well you’d what
you know you do it too late I’ve done I
I went the textile business by accident
in 1965 and I threw it at all about
twenty years later and that was about
twenty years too late the there’s a
great tendency to want to hold on
justify old decisions I mean it’s a
human human trait and what when you
really know you’ve got a bad business is
when you have a good manager and you’re
getting bad results I mean it when you
when you’re getting bad results with a
bad manager you still have to examine
the question of whether you know you can
get better results if you got a better
manager usually you can’t you know I’ve
said in the past you know that when a
when a management with a reputation
for excellence Encounters of business
with a reputation for bad economics it’s
the reputation of the business that
remains intact and and I’ve proved that
many times there are businesses that are
just plain tough you know and there’s
the copy there there may be too many
competitors but there’s reasons why they
don’t drop out there’s reasons well we
we started out in textiles and we made
over half of the the linings for men’s
suits in the country and we we went
through World War two and got awards and
and sears roebuck named us their
supplier of the year and all of that
sort of thing and then we’d say what
we’d like to increase the price of of
these linings a quarter of a cent a yard
and services we got of your miners ten
other guys that’ll sell it to us of the
old price that and nobody ever went into
a Sears store and said I’d like a a blue
Serge Serge a blue shirt Serge suit with
a half away lining it didn’t exist we
had no connection to the consumer and
there are lots of lousy businesses you
know and there’s lots of wonderful
businesses and or my job over the years
has been to try and figure out which is
which and I’ve made plenty of mistakes I
bought a company called extra shoes in
the early 90s I paid four hundred plus
million dollars for it and it made money
before I bought it
but you know as soon as I bought it they
pulled some switch or something I
immediately started losing money and and
it was because of foreign competition so
under it was because I owned I don’t
know ah and it went to zero and the
worst thing was that I paid for it in
stock so that 400 million in stock I
gave at the time is now worth about five
billion so it so every time Berkshire
stock goes down I feel a little bit
better because of my opportunity lost on
this business but you know when I looked
at Dexter shoe they had a good position
in retailers they turned out good shoes
they had a great workforce all kinds of
things but I just forgot one thing that
that they weren’t going to make shoes in
the United States anymore
so you make you make mistakes and it
does
okay to recognize quickly when you made
them if you’ve got a good person running
a business in it isn’t making any money
you know you’re in the wrong business
and and you’ve got to face up to that
generally speaking investing in yourself
is the best thing you can do anything
that improves your own talent so nobody
can take it away from me they can run up
huge deficits and the dollar can become
worth far less you can have all kinds of
things happen but if you’ve got talents
yourself and you’ve maximized your
talent you’ve got a terrific asset and
that does mean everybody should go to
college but it it doesn’t mean that any
way you find to improve communication
skills are enormous ly important I mean
I took a Dale Carnegie course that I
paid $100 for and it was worth a college
degree at least I thought it was maybe
this interview will cook a lot of ice
laughs thank you guys so much for
watching
I made the mentor me series because I
wanted to spend a little bit more time
with super successful people and I hope
some of their magic pixie dust rubs off
on us
so I’d love to know what you thought of
this video and what lessons you learned
that you’re going to apply to your life
and how I’m really curious to find out
leaving the comments below
I’ll join the discussion thank you so
much for watching you can you to believe
and I’ll see you soon
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