mr buffett how can i make 30 billion dollars [Music] start young charlie's always said that the big thing about it is we started building this little snowball on top of a very long hill so we started 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 the trick is to have a very long hill which means either starting very young or living to be very old and 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 ten thousand dollars to invest i'd i'd start with eas i would start going right through companies and 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 and as charlie has said earlier it won't be like doing that in 1951 when you could leave through and find all kinds of things that just left off the page at you but that's the only
way to do it i mean you have to buy businesses or little pieces of businesses called stocks and you have to buy them at attractive prices and 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 if i were working with a small amount of money the universe would be huge compared to the universe of possible ideas i work with now you mentioned that 56 to 69 was the best period actually my best period was before that was
from right after i met ben graham in 19 early 1951 but from the end of 1950 through the next 10 years actually returns averaged about 50 percent a year and i think they were 37 points better than the dow per year something like that but that i was working with a tiny tiny tiny amount of money and so i would pour through volumes of businesses and i would find one or two that i could put ten thousand dollars into or fifteen thousand dollars into that was just ridicul they were ridiculously cheap and obviously as the
money increased the universe of possible ideas started shrinking dramatically the times were also better for doing it in that time but i think that i think if you're working with a small amount of money with exactly the same background that charlie and i have and same ideas same whatever ability we have you know i think you can make very significant sums but you but as soon as you start getting the money up into the millions many millions the curve on expectable results falls off just dramatically but that's that's the nature of it when you get
up to things you can put millions of dollars into you've got a lot of competition looking at that and they're not looking as i did when i started when i started i went through the pages of the manuals page by page i probably went through twenty thousand pages uh in the moody's industrial transportation banks and finance manuals and i did it twice and i actually you know looked at every business i didn't look very hard at some well that's not a practical way to invest tens or hundreds of millions of dollars so i would say
if you're working with a small sum of money and you're really interested in the business and willing to do the work you can you will find something if you were you there's no question about in my mind you will find some things that promise very large returns compared to what we will be able to uh deliver with large sums of money is business school worth it depends on the person much more than it depends on the school some people are going to get a lot out of advanced education and some people are going to get
very little and i don't even think it's important that every person go to college at all we have all kinds of jobs at 70 or so thousand a year 80 000 a year that college training is not abuse and i actually was not keen on going to college myself yeah my dad kind of jollied me into it he could get me to do anything but i knew i could have a good time i liked investing and i could read the books you know it's a big commitment to take four years and the cost involved and
maybe the loans involved and everything i think depending on what your interests are in life i don't think it's for everybody i think it's for a lot of people but there ought to be a reason you're going and i didn't really see much reason there's nothing like following your passion i mean i love what i do obviously and i've loved it the whole time i've done it charlie it's the same way we have managers you know they come some of them went to business school some of them didn't you know they they're all types but
the common factor they're successful the common factor is they love what they do you know and you've got to find that in life and some people are very lucky in finding it very early i would you know i was dumb luck that my father happened to be in the securities business so when i would go to his office there were a lot of books to read and i got entranced with that but you know if they'd been in some other occupation i think i would have read those books eventually but it would have been a
lot later so if you find something that turns you on my guess is you're going to do very well and the beauty of it is in a sense there's not that much competition there are not a lot of people out there that are going to be running faster than you in the race that you elect uh to get into and uh if you haven't found it yet you may well have found it but if you haven't found it yet you know you've got to keep looking and we've got 70 plus managers you know some of
them some of them didn't we had one guy that didn't go to high school even didn't they charlie and rosner oh yeah he quit in fourth grade i think but uh well mrs b never went to school a day in her life you know and when you go out to the furniture mart i hope you go out this evening we expect to set a record today in sales what you are looking at on those 78 acres you know is the largest home furnishing store about 400 million sales largest store in the united states and it
comes from 500 of capital paid in by a woman that never went to school a day in her life couldn't read or write i mean she loved what she was doing and you know i tell the story this is a true story uh when she was in well into her 90s she invited me over to her house for dinner that was very unusual had a very nice house six or seven blocks away from the store and i went into the house and the sofa the chairs the lamp the dining room table they all had little
green price tags hanging down it made her feel at home and i said to her mrs b you are my kind of woman yeah forget sophia iran already i mean this is my kind of woman she loved it you know and she loved it all her life and just think of what that produced i mean it just it's incredible i mean now one time my dad used to quote emerson that the power that lies within you is new in nature you know and basically the power that was within mrs b was new in nature and
over a lifetime it produced amazing things so find find your passion and then don't let anything stop you the biggest mistakes are the ones that actually don't show up they're the mistakes of omission rather than commission we've never lost that much money on any one investment but it's the things that i knew enough to do that i didn't do we have missed profits of as much as you know maybe 10 billion dollars in things that i knew enough to do and i didn't do now the fact i didn't buy microsoft way back uh is not
a foregone opportunity because i didn't know enough to make that decision but there have been other investments where i didn't know enough to make the decision and for one reason or another i either didn't do it at all or i did it on a small scale i was sucking my thumb when i should have been writing checks you know basically and and you know those don't show up yeah there's no place where it shows missed opportunities but i've i've missed some big ones i will take a person graduating from college and assuming their normal shape
and everything i will be glad to pay them you know probably fifty thousand dollars for ten percent of all their earnings for the rest of their lives well if i'm willing to pay them ten percent for fifty thousand for ten percent that means they're worth five hundred thousand if they haven't got a dime in their pocket as long as they've got a good mind and a good body well if you're interested in business i definitely think you ought to learn all the accounting you can't by the time you're in your early twenties accounting is the
language of business now that doesn't mean it's a perfect language so you have to know the limitations of that language as well as all aspects of it so i would advise you to learn accounting and i would advise you to be in terms of part-time employment or anything else work at a number of businesses there's nothing like seeing how business operates to uh build your judgment in the future about businesses when you understand what kind of things are very competitive and what kind of things are less competitive and why that works that way all of
that adds to your knowledge so i would do a lot of reading if you're interested in investments i would a i would take the accounting courses i do a lot of reading about investments and i would get as much business experience i would talk business with people that are in business to find out what they think makes their operation tick or where they have problems and why i just think you just kind of sop it up every place that you can 70 years ago i was in high school almost a third as long as the
country has been around and when i was in high school i really only had two things on my mind girls and cars and and it wasn't doing very well with girls so we'll talk about cars but let's 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 uh 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 you're not going to get only one car in your lifetime but you're going to 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 the key is to certainly in
terms of your personal life the most important decision you'll make is the spouse that most of you will likely have and it's very important to surround yourself with people who are the better than you are you are going to move in the direction of the people you associate with so i i've been enormously lucky in that respect i mean i've i've just had teachers and friends and a spouse that really was a better person i was and i had enough sense to learn from these people that that life went better if you behave better yourself
and uh it took a while the uh so i i advise you to seek out as your partner in business your partner in life whatever it may be look for the people that actually uh are examples to you rather than somebody that you think you need to straighten out yourself and simple rules like that delighting customers working through other people associating with people that will will cause you to move in a better path than you might otherwise have they will take you so far in life that it's hard to believe
