okay zone five please good afternoon Mr Buffett and Mr Munger my name is Grant Morgan I'm here from New York City early you had acknowledged that it is a more difficult investment and business environment today than it was when you first started out my question is if you were starting out again today in your early 30s what would you do differently or the same in today's environment to replicate your success in short Mr Buffett but how can I make $30 billion start young Charlie's always said that the the big thing about it is we we
uh started building this little snowball on top of a very long hill so we started at a very early age and rolling the snowball down and of course the snowball the nature of compound interest is it behaves like a snowball of sticky snow and and uh the trick is to have a very long hill which means either starting very young or living very to be very old the you know I would do it exactly the same way if I were doing it in the investment world I mean if I were getting out of school today
and I had $10,000 to invest i' I'd start with the A's I would start I would start going right through companies and I I probably would focus on smaller companies because I would be working with smaller sums and there's more chance that something is overlooked in that Arena uh and as Charlie has said earlier it won't be like doing that in 19 uh 51 when you could Le through and find all kinds of things that that just Le off the page at you but that's the only way to do it I mean you have to
buy businesses and you or little pieces of businesses called stocks and you have to buy them at attractive prices and and you have to buy them in you have to buy into good businesses and that advice will be the same 100 years from now in terms of investing that's that's what it's all about and you can't expect anybody else to do it for you I mean that people will not they will not tell you about uh uh wonderful little Investments there's it's it's not the way the investment business is set up when I first visited
Geico in January of 1951 and I that rest of that year I subsequently went down to Blan company and uh actually the um to one other firm that was a leading firm that was a leading guy and company that was a leading analyst in insurance and you know I thought i' discovered this wonderful thing and i' see what these great investment houses that specialized in Insurance stock said and they said I I didn't know what I was talking about you know it wasn't of any interest to them you've got to follow your own you know
you you've got to learn what you what you know and what you don't know and within the arena of what you know you have to just you have to you have to pursue it very vigorously and and act on it when you find it and you can't look around for people to agree with you you can't look look around for people to even know what you're talking about you know you have to you have to uh you have to think for yourself and if you do you'll find things Charlie yeah the the hard part of
the process for most people is the first $100,000 if you have a standing start at zero getting together $100,000 is a long struggle and for most people and I would argue that the people who get there relatively quickly are helped if they're passionate about being rational very eager and opportunistic and uh steadily underspend their income grossly I think those three factors are are very helpful oh inherit children kids inheriting money yeah well we we have a minority Viewpoint down here in the front [Music] [Applause] row I think my views on that subject changed when I
was about 18 until that point I thought it would have been a great idea the uh no I I am quite a believer in a uh meritocracy and I think a part of part of that is uh not having people start way way ahead of other people in life based on whether they were lucky enough to come from the right womb or not so I've never been uh big on the idea that either Society benefited or in many cases the kids although I think that's much more problematic but uh by the fact that great transfers
of wealth will go from one generation to another I you know I I would rather I would rather see the degree of talent possessed by individuals determined the resources they command in this world and their ability to influence other people's lives and command the labor of other people and all of that than than any divine right of the womb so it's Charlie has a somewhat different view on that yeah I am a little more willing to let the world take the succeeding Generations down it's he I don't think they need much help Charlie believes in
passing it along long as you're sure they're going to blow it okay so go ahead if you stop to think Warren of the great fortunes of your if you go back to 1900 1870 and you know name me the people that have vast power because they are in the fourth generation in that family some of them are living awfully well but they are not running the world I would say the Rockefeller family had considerably more influence than if their their name had been uh you know just plain rock well I think that's true but but
you're picking probably the strongest single family of the pce and now that it's dispersed among 60 or 70 or 80 rockerfeller it uh I think it's true there were four or five Brothers there that had an unusual share of worldly influence I must say in that case I think they handled it very well good afternoon and thank you my name is Paul worth I'm From Witch talk Kansas and my question is as follows for the consumer franchise companies that Burkshire owns Coca-Cola and Gillette in particular in which emerging markets do you see the greatest 10-year
potential for unit sales growth and what economic political or soci social changes are precipitating that growth secondly do you believe that the US market cap as a percent of the Worlds at 53% is near its Zenith and which countries do you believe will likely show the greatest percent growth in total market cap well I wish I had the answers the U the first question though obviously when you're dealing with something like cus is is raw numbers I mean there's huge potential in a country you know the largest country in the world in a China where
the per capita consumption is very low but it's growing very fast so it's very easy for me to predict and probably be right absence some tremendous up people or some real surprise that that China would be the fastest growth Market among countries of any size in the world uh uh for Coke from this level but that's that's based on the fact that you just got a huge number of people that clearly like the product that are starting from a very low base and where a lot more bottling infrastructure is going to be needed but which
will be supplied to uh facilitate that growth um with Gillette it's a little different and people are already shaving what you do is you upgrade the Shaving experience that they have so you have you have great differences in the quality of the blades uh available shaving systems when you get into the more advanced ones and they they trade up and they get a much more enjoyable uh shaving experience uh they get better shaves than was the case when they were forced to rely on the lowest pric product but both of those companies have tremendous opportunities
as the prosperity around the world uh as the standard of living growth and and and there's just no doubt in my mind that in the blade and razor business for Gillette which is only a third of their business but I would almost guarantee you that 10 or 20 years from now both of those companies will be doing a lot more business in in their in those areas I named uh than currently and you know it we don't find tuned a lot more than that I mean that you know I I do not sit and work
out try and work out country by country what's going to happen with a A gillet or coke uh it it it would be a waste of time I wouldn't know the answer or anyway but but I'm I'm prettyy sure of the conclusion that that both of them will prosper a great deal and I would hate to be competing with either one of them here or anywhere else in the world I mean they they have the winning hand Charlie well I'd agree with everything you said and I'd like to add that if if I knew for
sure that the United States share of worldwide market capitalization was going to go from 53% down to 40% I wouldn't know how to make money out of that Insight by running around buying foreign Securities yeah we just don't operate on that basis with the and I mean you know a few years ago emerging markets were all the rage and and every institution in the country was getting promoted by somebody who said I'm going to run an Emerging Markets fund and they felt they had to participate in it and their advisers told them they had to
participate we regard that all as nonsense you know and uh in the end you just have to think for yourself about what you know and what you don't know and and and and go where that leads you and you don't do it by buying into things with with names on them or sectors or country funds or that stuff you know that those that's merchandise that's designed to sell the people and it's usually is sold to people at the wrong time yeah our game is to find a few intelligent things to do it's not to stay
up on every damn thing that's going on in the whole world good afternoon Wes Thurman from Stanford California you mentioned earlier about the power of the brands on the internet and I really can't think of a better brand at least in my name uh as the birkshire haway brand and I guess going forward have you thought about ways to to use that Berkshire hathway name you know further on the internet to capitalize on the the reputation you've built over the past decades yeah I I that's a very good point and it's it is something that
could be of real value uh it's already probably of some value to us with with the brands that we're associated with I mean I I I do think that that executive jet or the Net Jets program associated with Burkshire hathway that that uh bores associated with birkshire haway brire haway life associated with Berkshire haway I think those brands are enhanced by the association with Berkshire as some of other other brands would be but I think that's got a long way to go I think you're dead right on that that the the internet reinforces the necessity
for trust in dealing with people I mean you are you're getting further and further removed from the face-to-face dealing where where you can go back to the store the next day or look at the person who sold it to the next day and and and and get an adjustment or something of the sort you're really having to place more and more trust in somebody you're never going to see and I think you're right that that Berkshire hathway if it behaves itself properly can get a reputation for trust that uh uh will be far greater than
that possessed by the average company and that when we properly associate that with uh with some of our brands that those brands will be enhanced by the Association so I I uh no I I I've thought a lot about what you're talking about there and and so of our managers and it's something that we intend to capitalize on in the future it's rather interesting I mean if you look at the companies that do business with people where there's no face-to-face interaction either with the company itself for some intermediary like a retailer or anything of the
sort I mean you've got Dell computer now you have amazon.com but uh Geico is doing business with um now 3.7 million policy holders and it'll do for the year is out it'll be close to 4 and a half million and probably 4 billion 8 or so of business with people that have have never uh met anyone from GEICO they've talked to someone on the phone uh but we are one of the largest companies in the United States in terms of doing business on a direct to Consumer basis we're doing it with people who on average
are paying us $1,200 a year or thereabouts for a promise so we have a connection that people that talk about the Amazon of the world where people are buying X dollar worth of books we have a much more direct connection with people who tend to renew with us year after year that is based on trust I mean it's not based on the on The Neighbor Next Door who is who they can go to if they have a problem it's based on the fact they trust this company that's in back in the District of Columbia Washington
uh to perform in the future and that's that's a huge asset and it's growing daily I mean we are adding policy holders every day who are who are signing up with us who have never met anybody from the company and that already I mean it's a very big asset it will be uh many times bigger in my view 10 years from now the birkshire Hathaway umbrella that that gets involved in one company after another like that that people trust I mean we can be in an awful lot of homes uh over the years and as
more and more business becomes done on an indirect basis or or a direct basis with the consumer uh the power of that uh in my view should grow and we just have to be very smart about how we uh maximize that growth Charlie uh nothing to add okay Zone one
