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Sunday, March 30, 2008

Warren Buffett Invests Like a Girl

Warren Buffett Invests Like a Girl
By LouAnn DiCosmo (TMF Bling) March 20, 2008

101 Recommendations

For as long as I can remember, adding the phrase "like a girl" to the end of whatever you were saying was a put-down, an insult, something to come to fisticuffs over. Little boys the world over hated being told that they, for example, "threw like a girl." I'm not defending the statement, and as a member of the fairer sex, I certainly don't agree with its intent, but hey, that's been the case from the playground on up.

When it comes to investing, though, you could do a whole lot worse than learning to "invest like a girl." And that's why I'd bet Warren Buffett, chairman of Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B), wouldn't get offended if I told him to his face that he invests like a girl. In fact, he'd probably thank me (and perhaps slip me a box of See's Candies). Hang on to see why -- and stay tuned for our soon-to-be published book on this very topic.

What makes Buffett Buffett
What is it that makes Warren Buffett such a consistently phenomenal investor? Is it that he's zigging and zagging along with the market's every move? Is he trading all the time, buying this and selling that, racking up taxes and commissions all the while?

No, no -- what makes Warren Buffett the investor whom every investor wants to be like is that he approaches investing differently from the way most men do. He's patient and does thorough research. He waits for the right price to buy. He seeks to never sell the companies he invests in. He's the anti-trader, if you will.

Yep, you heard it here -- Warren Buffett invests like a girl. And that's a very good thing.

Women and investing
So how exactly do women invest? Check out these characteristics of female investors that distinguish them from their male counterparts.

* Women spend more time researching their investment choices than men do. This prevents them from chasing "hot" tips and trading on whims -- behavior that tends to weaken men's portfolios.
* Men trade 45% more often than women do, and although men are more confident investors, they tend to be overconfident. By trading more often -- and without enough research -- men reduce their net returns. But by trading less often, women get better returns and also save on transaction costs and capital gains taxes.
* A study by the University of California at Davis found that women's portfolios gained 1.4% more than men's portfolios did. What's more, single women did even better than single men, with 2.3% greater gains.
* Women tend to look at more than just numbers when deciding whether to invest in a company. They invest in companies they feel good about ethically and personally. And companies with good products, good services, and ethics tend to have better long-term prospects -- and face fewer lawsuits.

These are some of the traits that make female investors more like Buffett and less like frazzled, frenetic day traders, with their ties askew, hair on end, and eyes bleary. Patience and good decision-making help set women apart here.

Women also have a keen eye when it comes to identifying companies poised for greatness. They typically look beyond the shiniest, newest bio-techno-gadget and focus instead on retailers meeting their needs, on products that they can't live without, and on consumer goods they buy in their day-to-day lives. And that type of insight can pay off. Buffett's long-standing investments in Coca-Cola (NYSE: KO) and Gillette (now owned by Procter & Gamble (NYSE: PG)) meet this standard of easy-to-understand investments with competitive advantages.

Legendary fund manager Peter Lynch has famously credited his wife with discovering pantyhose maker Hanes, which at one point was Fidelity Magellan's largest holding. And he's also written about watching the shopping habits of his then-teenage daughters to discover investment ideas.

Shoot, even our own Bill Mann has told us that his wife shone the light on Swedish clothing phenom Hennes & Mauritz (OTC BB: HMRZF), better known as H&M, which went on to be a great performer for him.

Look at a company like recent Motley Fool Stock Advisor recommendation Coach (NYSE: COH), which started turning around several years ago thanks to fresh designs that drew customers in like moths to a flame. The stock's stumbled over the past year and remains beaten down today because of ongoing fears about the economy and the "strength of the consumer," but the fact remains that it's a solid, well-run business with desirable products and a growing market. I'll bet you could have talked to any number of female shoppers early on who could have clued you in that the company's products were much improved -- and that the financials couldn't be far behind.

So what if you're not a girl?
It's possible, dear reader, that you're of the male persuasion, but don't fret. By focusing on the traits that created superinvestor Warren Buffett -- patience, the willingness to dig deep, the ability to wait for the right price, and the desire to buy and hold instead of trade, trade, trade -- you can awaken the feminine side of your investment psyche. Consider it. Your portfolio will thank you for it.

RIP, Dith Pran

Actor Sam Waterston , Dith Pran and Sydney Schanberg. Waterson portrayed Sydney Schanberg in "The Killing Fields" (via the Star Ledger)

The name may not be familiar to some, but the gruesome legend of The Killing Fields sure is.

The photographer Dith Pran has passed away today.

Dith Pran, a photojournalist for The New York Times whose gruesome ordeal in the killing fields of Cambodia was re-created in a 1984 movie that gave him an eminence he tenaciously used to press for his people’s rights, died in New Brunswick, N.J., on Sunday. He was 65 and lived in Woodbridge, N.J.

The cause was pancreatic cancer, which had spread, said his friend Sydney H. Schanberg.

Mr. Dith saw his country descend into a living hell as he scraped and scrambled to survive the barbarous revolutionary regime of the Khmer Rouge from 1975 to 1979, when as many as two million Cambodians — a third of the population — were killed, experts estimate. Mr. Dith survived through nimbleness, guile and sheer desperation.

He had been a journalistic partner of Mr. Schanberg, a Times correspondent assigned to Southeast Asia. He translated, took notes and pictures, and helped Mr. Schanberg maneuver in a fast-changing milieu. With the fall of Phnom Penh in 1975, Mr. Schanberg was forced from the country, and Mr. Dith became a prisoner of the Khmer Rouge, the Cambodian Communists.

Mr. Schanberg wrote about Mr. Dith in newspaper articles and in The New York Times Magazine, in a 1980 cover article titled “The Death and Life of Dith Pran.” (A book by the same title appeared in 1985.) The story became the basis of the movie “The Killing Fields.”The film, directed by Roland JoffĂ©, portrayed Mr. Schanberg, played by Sam Waterston, arranging for Mr. Dith’s wife and children to be evacuated from Phnom Penh as danger mounted. Mr. Dith, portrayed by Dr. Haing S. Ngor (who won an Academy Award as best supporting actor), insisted on staying in Cambodia with Mr. Schanberg to keep reporting the news.

A dramatic moment, both in reality and cinematically, came when Mr. Dith saved Mr. Schanberg and other Western journalists from certain execution by talking fast and persuasively to the trigger-happy soldiers who had captured them.

Saturday, March 29, 2008

Seven Mysterious Disappearances

With all this talk of those kids who found the parachute that might be D.B. Cooper’s, it’s made me think about people who have randomly disappeared. I think it’s such a fascinating topic – and other people must too, or we wouldn’t still be talking about people such as Amelia Earhart and Mr. Cooper today.

In that spirit, I’ve found (not literally, of course) a few people whose disappearances have kept us guessing over the years. I know there are (sadly) plenty out there, but I tried to pick some of the vanishings I found most intriguing.
Virginia Dare, 1587

roanokeVirginia Dare is just one of the many people (87 men, 17 women and 11 children, to be exact) from the island of Roanoke who disappeared without a trace. What’s notable about Virginia, though, is that she was the first child of English parents to be born in the Americas. In fact, it is Virginia’s grandfather, John White, who discovered that the colony was missing. In 1587, John sailed back to England for supplies and assistance for the colony. When he returned in 1590, everything was gone except for the infamous “CROATOAN” carved on a tree.

Virginia is gone but not forgotten, though. Dare County, N.C. is named after her, as is the Virginia Dare Memorial Bridge that spans the Croatan Sound. Roanoke Island celebrates Virginia’s birthday every year with an Elizabethan Renaissance Fair.

Her legend has also been the subject of many imaginative writers – a couple of novels have her meeting Pocahontas and John Smith. The Daughter of Virginia Dare even portrays her as Pocahontas’ mother.

A 1965 novel titled Dare, Virginia and the other Lost Colonists have all of the Roanoke residents being abducted by aliens and settling on a planet called Dare.

In the Buffyverse, Virginia Dare is a vampire slayer known as the White Doe. The T.B. show Freakylinks shows us a demon Virginia who destroyed the other colonists. The picture above, by the way, is a map of the Roanoke area by John White. Can you believe no pictures of Virginia Dare from 1587 exist? (that’s a joke)
Theodosia Burr Alston, 1812

theoTheodosia was the daughter of Vice President Aaron Burr. She led a pretty charmed life until 1812 – prior to that, she was widely known as the most educated American woman of the day, she married a wealthy land owner and politician and had a son named after her father. In 1812, though, Theodosia was exhausted from appealing to people on her father’s behalf. He was acquitted of treason but decided it would be best to spend some time in Europe. Theo was arranging for his 1812 return when her son died. She was still recovering from the shock of that when she boarded the Patriot in the Georgetown, S.C. harbor to meet her father in New York. That wasn’t to happen, though – after boarding the ship, neither it nor Theodosia were ever seen again. Of course, most theories say that the boat went down in a storm. But some legends say the Patriot was captured by pirates, who made Theo and her shipmates walk the plank. Another version of this is that Theo was forced to become a pirate’s mistress.

The least believable of the theories, though, is the one that involves a Karankawa Indian chief. He supposedly found a ship wrecked on the shore and found Theo, chained to a bulkhead and naked except for a gold locket engraved with her name. He rescued her and she told him that she was the daughter of a very important man and that if the chief ever came across white men, he should give him the locket and explain what happened. She gave him her necklace and promptly died.
Benjamin Briggs and the passengers and crew of the Mary Celeste, 1872

briggsNot that a missing ship is anything to be blasĂ© about, but it wasn’t uncommon before modern technology was able to track ships. The Mary Celeste is interesting, though, because the ship was found – minus its passengers.

The Mary Celeste might have been cursed from the very beginning - the first captain died on her maiden voyage. She was launched on her last voyage on November 5, 1872, from Staten Island to Genoa, Italy. A month later the captain of the Dei Gratia, who knew Captain Benjamin Briggs, spotted the Mary Celeste drifting along toward the Strait of Gibraltar. Although the ship was just drifting, no distress signals were flying. Some of the Dei Gratia’s crew went to the Mary Celeste in a small boat and boarded it. It was wet, but in good condition. The lifeboat was missing and looked like it was intentionally launched. A six-month supply of food and water had been left behind, along with all of the ship’s paperwork except for the captain’s log.

The most plausible theory stems from the cargo the Mary Celeste had on board – more than 1,000 barrels of alcohol. When the abandoned ship was unloaded, nine of these barrels were found empty. The theory is that when the cargo hold was opened, the nine leaking barrels resulted in a rush of fumes that lead the captain to believe the ship was going to explode. He basically freaked out, ordered everyone into a lifeboat and forgot to secure the lifeboat to the ship (or the line broke).

Another theory is that the crew drank the alcohol, murdered the Captain and stole the lifeboat to escape.
Flannan Isles Lighthouse Keepers, 1900


In December of 1900, the lighthouse keepers on the Flannan Isles off the coast of Scotland vanished. It was first noted when a steamer passed the lighthouse on December 15 and noticed the light wasn’t working. This was reported, but apparently nothing was done until the relief keeper and a crew with provisions went to the lighthouse on December 26. When no one came out to greet them, they entered the lighthouse and found the entrance gate and main door both closed, the beds unmade, the clock stopped and an overturned chair in the kitchen. The island was thoroughly searched for the men and any clues as to their whereabouts, but the only thing that was found was some damage done by a storm. Although this might seem like a clue, the log left by the keepers showed that it happened before they disappeared.

The Northern Lighthouse Board concluded that the men had drowned and been swept out to sea. Rumors, though, had one keeper murdering the other two, then drowning himself out of guilt. A sea serpent was also a possibility, along with the prospect that they had been abducted by spies or attacked by a boat full of ghosts (the lifeboat full of the Mary Celeste crew, maybe?). Photo by Marc Calhoun
Dorothy Arnold, 1910

dorothy arnoldImagine the media frenzy if Paris Hilton went for a walk in L.A. and disappeared forever (we can dream, right?). That’s just what happened when Manhattan socialite Dorothy Arnold went for a stroll in Central Park (supposedly) on December 12, 1910.

Dorothy was the daughter of a wealthy perfume importer and the niece of an Associate Justice of the Supreme Court. Earlier that year, she had spent a week with a man that could have caused some embarrassment to the Arnold family, so instead of reporting her missing, her dad conducted his own investigation through the Pinkertons. Six weeks later, he gave in and called the police. The man she had been seeing, George Griscom, Jr., thought she might have committed suicide after her writing was rejected from a magazine. Friends thought she killed herself because Griscom wouldn’t marry her. And her dad thought she had been abducted in Central Park. Another rumor circulated that she had gotten pregnant and died during a botched abortion. So far, no one knows the truth for sure – no evidence of any sort has ever turned up. Photo from
Amelia Earhart, 1937

ameliaSet on circumnavigating the globe, Amelia Earhart took off in her Electra from Miami with navigator Fred Noonan on June 1, 1937. After numerous stops, they ended up in Lae, New Guinea on June 29. They had completed a good chunk of their trip – about 22,000 miles. Only 7,000 miles remained of the fateful journey. On July 2, the pair headed for Howland Island, which is where the trip took a turn for the worse: they fell out of contact and disappeared. Search efforts began only an hour after Amelia’s last communication.

Obviously, they were never found, despite a huge search effort involving $4 million, the Navy and the Coast Guard. Their efforts included a search of Gardner Island (now Nikumaroro) which had been uninhabited for more than four decades. Since then, artifacts have been uncovered on Nikumaroro including a piece of clear Plexiglass with the exact thickness and curvature as an Electra window and a size nine shoe that looked like the shoes Amelia wore.

We have to look at some of the theories surrounding her disappearance – they’re pretty interesting. Many thought she was perhaps a spy for FDR and the Japanese had something to do with her disappearance. For instance, in 1966, a CBS correspondent published a book that said Amelia and Fred were captured and executed when they crashed on Saipan Island. Another book was published including a daughter from a Japanese officer who claimed her father had executed Amelia himself.

A former Marine said that he and his fellow soldiers had opened a safe in Saipan, only to find Amelia’s briefcase. Another Marine said he actually guarded the plane in 1944 and then watched it being destroyed.
One author even claimed that Amelia actually completed the flight, returned to the U.S. and began living under an assumed name – Irene Bolam. The real Irene Bolam sued for $1.5 million and swore that she was not Amelia Earhart. Studies since then have shown that she was telling the truth.
D.B. Cooper, 1971

cooperJust in case you haven’t heard the D.B. Cooper story, here’s a little recap. In November 1971, D.B. Cooper (AKA Dan Cooper, neither of which are his real name) hijacked a plane, demanded a ransom of $200,000, and jumped out of the aircraft after he received it. He has never been found, but a few clues have popped up over the years. In 1980, a little boy found nearly $6,000 in rotting $20 bills on the banks of the Columbia River, which is in the area of where Cooper jumped. In 2007, the FBI announced that they were able to get some DNA from a tie Cooper left on the plane. And, most recently, some kids found an old parachute buried near Amboy, Washington.

The FBI doesn’t think Cooper survived the flight – when he jumped out, the plane was going through a bad storm with lots of cloud coverage. More than 400 troops from Fort Lewis helped survey the area on foot for any trace of Cooper, but no one found even a shred of evidence. Although the $20 bills given to Cooper were unmarked, the FBI was careful to assign a certain range of serial numbers. A newspaper in Portland offered $1,000 to the first person who could bring in one of these bills, hoping that Cooper was spending them, but not one ever turned up.

Friday, March 28, 2008

Arthur C. Clarke

For decades, the author of the science-fiction classics "2001: A Space Odyssey" and "Childhood's End" has exhibited an uncanny ability to see the future.

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By Frank Houston

"Any sufficiently advanced technology is indistinguishable from magic."
-- Clarke's Third Law

March 7, 2000 | The main character in the classic science-fiction story "The Time Machine" is known only as the Time Traveller. He travels aboard a machine of his own construction -- made of ebony, bronze and chrome -- far ahead in time, glimpsing the harrowing changes in store for humanity, and then returns home to the Victorian England of his creator, H.G. Wells, to relate his tale. At the end of the story, the Time Traveller enters the Time Machine again, equipped with his Kodak, and literally disappears into the future.

Since he began publishing in the 1940s, writer Arthur C. Clarke has been a modern-day Time Traveller whose mission has yielded far more practical results. With more than 80 books of science, fiction and nonfiction, Clarke has displayed an uncanny ability to see the future. In 1945, a year before the death of Wells and 12 years before Sputnik, Clarke predicted a global relay system of radio and television signals using geosynchronous satellites -- a communications revolution that began taking shape 20 years later. The first draft of the article "Can Rocket Stations Give Worldwide Radio Coverage?" is now in the Smithsonian.

"As far as the future is concerned, any political or sociological prediction is impossible," Clarke has said. "The only area where there is any possibility of success is the technological future." This is the future he has seen. In "2001: A Space Odyssey," his most widely recognized work (thanks to the Stanley Kubrick film), Clarke presages a space station (now under construction), videophones, laptops and e-mail. And he gives us one of the most impressive and enduring creations of his career: the HAL 9000 computer. Coming at a time when computers filled entire rooms, Clarke's prediction of a sentient computer was way ahead of its time -- and still is.

The machine that carries Clarke forward in time is his scientific imagination, fueled by clear, powerfully informed writing. Few writers in contemporary America can match Clarke's breadth, versatility and penetrating intellect. Because of his background in physics and mathematics and his dedication to "hard," fact-based science fiction, Clarke is the scientist's favorite sci-fi writer. Astronauts revere him too -- Neil Armstrong, in fact, had seen the Clarke and Kubrick depiction of a lunar base in "2001" just a year before he became the first man on the moon.

Sir Arthur Charles Clarke (he was knighted by Queen Elizabeth in 1998) was born in Minehead, Somerset, England, in 1917 but has lived in Colombo, Sri Lanka (formerly Ceylon), since 1956, when he developed an interest in undersea exploration and took up scuba diving and photography. He's been afflicted with post-polio syndrome since the 1980s, and although he can no longer walk without assistance, he still plays table tennis daily, leaning against the table, and is said to be a fierce competitor who gloats shamelessly in victory. He has many times documented his fervor for diving, which first led him to Sri Lanka, where he and his friend Mike Wilson started a scuba diving business a few decades ago. He and Wilson once discovered a 250-year-old wreck off the country's Great Basses Reef. Sadly, Clarke hasn't been able to dive in several years.

His seaside refuge in Colombo is a self-contained media center, work station and observatory that racks up a monthly telecommunications bill in excess of $1,000. The details of Clarke's personal life are closely guarded. He was married once, for less than a year in the early 1950s, and now lives in the large, walled compound with a Sri Lankan-Australian family he has "adopted" as his own and a Chihuahua named Pepsi.

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As a boy, Clarke mapped the moon using a homemade telescope and became fascinated with science fiction after seeing his first sci-fi magazine, "Amazing Stories," in 1928. Lacking the funds for higher education, he worked as a British Civil Service auditor from 1936 to 1941 and joined a new group that called itself the British Interplanetary Society.

After wartime service in the Royal Air Force, Clarke got his degree from King's College in London. Already he had obtained the services of literary agent Scott Meredith and was finding that his scientific writing was providing him with what he called "occasional jam" -- Clarke just "needed a more reliable source of bread and butter," as he recalled in a 1999 nonfiction compilation "Greetings, Carbon-Based Bipeds!" He got a job, thanks to a dean at the college, as assistant editor of Physics Abstracts, published by the Institute of Electrical Engineering. The budding author couldn't believe his luck: "All of the world's leading scientific journals passed over my desk, and I had to mark the ones that appeared important." The same year, 1948, Clarke wrote a short story called "The Sentinel," a seed that would grow into his most famous work.

Clarke made himself expert in all matters pertaining to the dawning Space Age. In a review of the 1950 film "Destination Moon," based on Robert Heinlein's story, Clarke wrote, "The exhaust velocity, mass ratio, and other technical details of the spaceship have obviously been worked out with great care." In an address to the British Interplanetary Society, "Space Travel in Fact and Fiction," Clarke discussed his literary forebears, adding the great astronomer Johannes Kepler to the list. Kepler, who discovered the laws governing the motion of the planets, also composed a story about a Moon voyage in 1643. Kepler would prove to be an ideal role model for Clarke. The Book-of-the-Month Club made Clarke's "Exploration of Space" a selection in June 1952 and the book became a bestseller. Its closing words offered a hint of the passions that would animate much of Clarke's career: "We stand now at the turning point between two eras. Behind us is a past to which we can never return ... The coming of the rocket brought to an end a million years of isolation ... the childhood of our race was over and history as we know it began."

Just a year later, Clarke published what many consider (to his annoyance) to be his finest novel, "Childhood's End," a dark tale of an alien occupation of Earth. According to Thomas Disch, author of "The Dreams Our Stuff Is Made Of: How Science Fiction Conquered the World," Clarke "never surpassed this tale of mankind self-destructing for its own transcendental good."

If the two works seemed to exist in yin-yang opposition, it was because Clarke's formidable intellect made for a complex optimism. As Clarke had said of Kepler, "He was both a scientist and a mystic." The fabulist in him was stimulated by the new frontier, but his inner scientist was guarded. In 1962 -- the same year John Glenn became the first American to orbit the Earth -- Clarke cautioned, "We'll never conquer space." The universe is too vast, and stories like "The Sentinel" and "Childhood's End" demonstrated his belief that, should there be intelligent life out there, it was likely far too advanced for human comprehension.

Clarke was prolific, publishing novels -- "Earthlight" (1955), "A Fall of Moondust" (1961) -- and collections of essays and lectures. Critics such as sci-fi editor David Pringle fault Clarke's characterization as "minimal, the dialogue embarrassingly stilted." But Pringle admits, "Clarke writes an unusually pure form of science fiction." Clarke's "City and the Stars," he writes, "succeeds in evoking a childlike sense of wonderment." The elegant novel, about the last city on Earth and a lone boy who yearns to escape, conforms "to popular science fiction stereotypes ... and moreover does it beautifully."

In April 1964, while in New York to work on a Time-Life book called "Man and Space," the Time Traveller was summoned to Trader Vic's in the Plaza Hotel to meet director Stanley Kubrick. Clarke joined Kubrick after the director, fresh from his success with "Dr. Strangelove," informed him of his desire to make "the proverbial really good science fiction movie." They used Clarke's short story "The Sentinel" as a launch pad. As it evolved, the theme of "2001: A Space Odyssey," "man's place in the pecking order of cosmic intelligence" (as Clarke later put it), would suit both men perfectly.

The pair were in some ways a classically mismatched odd couple -- English gentleman Arthur, who believes "no sane person is awake after 10 p.m., and no law-abiding one after midnight," Stanley the Bronxite with "a night-person pallor," as Clarke wrote in "Son of Dr. Strangelove" in 1972. But Stanley's genius and meticulous attention to detail dovetailed with Arthur's imagination and raw scientific knowledge. Diary entries from Clarke's journal seem to encapsulate the relationship:

July 11. Joined Stanley to discuss plot development, but spent almost all the time arguing about Cantor's Transfinite Groups ... I decide that he is a mathematical genius.

Sept. 28. Dreamed I was a robot, being rebuilt. Took two chapters to Stanley, who cooked me a fine steak, remarking, "Joe Levine [executive producer of Santa Claus Conquers the Martians] doesn't do this for his writers."

The dream foreshadows the HAL 9000. Kubrick breathed life into the sentient computer, but it was Clarke who provided HAL's soul. He was holed up in the Hotel Chelsea -- where diversions included visits from Allen Ginsberg, Arthur Miller, Andy Warhol and William S. Burroughs -- to write the story upon which Kubrick would base his screenplay. "2001" was published a few months after the film was released in the spring of 1968.

The film was a visual masterpiece, impeccably timed, but the novel is only slightly less opaque. Like other Clarke works, "2001" imagines extraterrestrials as an enlightening force on humanity, steering the species toward the development of intellect. The aliens leave an alarm -- the monolith -- on the moon to notify them the moment humanity is smart enough to find it; astronaut David Bowman, on the outskirts of the solar system, eventually makes contact. Bowman is reborn in the image of the alien: as a form of radiation, bodiless, able to travel beyond the speed of light. "2001" ends in a euphoric rush of hallucinatory imagery and Clarke's familiar refrain: "History as men knew it would be drawing to a close."

At Christmas, the Apollo 8 crew read from the book of Genesis as they orbited the moon, and later confided to Clarke that "they had been tempted to radio back the discovery of a large black monolith" on the dark side.

As for Clarke's continuing track record: Later, after the Apollo 13 crew barely survived the explosion of an onboard oxygen tank, Clarke received a report on the mishap from a NASA administrator with the inscription, "Just as you always said it would be, Arthur." And while "2001" the film carries the spaceship Discovery only as far as Jupiter, in the novel Clarke uses Jupiter's gravitational field to give the ship a boost in momentum, carrying it farther toward Saturn, a "slingshot" maneuver used for the first time 11 years later by Voyager II on its way to Neptune and beyond.

Clarke has often hit the moving target of the future with amazing precision, but part of his charm as a writer is that he doesn't take himself too seriously to admit his misses: "I'm already a little embarrassed to see that 'The Sands of Mars' (1951) contains the sentence, 'There are no mountains on Mars,'" he wrote in 1973. When a Sunday Times columnist offered a prize for the best alternative to the clunky new phrase "word processor" in 1986, "I submitted "word loom", which seems to have taken off like the proverbial lead balloon," Clarke writes.

The same year, and for the first time, Clarke entered into a novelistic collaboration, with NASA's former director of planning for the Viking missions to Mars, Gentry Lee, with whom he penned "Cradle" and three sequels to his novel "Rendezvous With Rama" even as he continued to grind out sequels to "2001": "2010: Odyssey Two," "2061: Odyssey Three" and "3001: the Final Odyssey," in which original astronaut Frank Poole (sent into the deep freeze of space by the homicidal HAL) is revived and given a crash course in human history by a device called the brain cap, which pumps information directly into the cerebral cortex. As an essayist, Clarke discusses the implications of science, but humanity -- its obsessions, aspirations and foibles -- is the underlying subject to which he continually returns. He has little patience for organized religion: "The rash assertion that 'God made man in His own image' is ticking like a time bomb at the foundation of many faiths," he writes in 1965, "and as the hierarchy of the universe is disclosed to us, we may have to recognize this chilling truth: if there are any gods whose chief concern is man, they cannot be very important gods." If you think that's harsh, you should hear what he has to say on the subjects of UFOs and astrology.

In "Credo," an essay published in 1991, Clarke lays out a belief system by distinguishing between two views of God: Alpha, who "rewards good and evil in some vaguely described afterlife," and Omega, "Creator of Everything ... a much more interesting character and not so easily dismissed." Clarke writes, "No intelligent person can contemplate the night sky without a sense of awe. The mind-boggling vista of exploding supernovae and hurtling galaxies does seem to require a certain amount of explaining."

But Clarke is always careful to educate rather than merely lecture. On the immensity of space he writes, "To obtain a mental picture of the nearest star, as compared with the distance to the nearest planet, you must imagine a world in which the closest object to you is only five feet away -- and then there is nothing else to see until you have travelled a thousand miles." On biological evolution: "We seldom stop to think that we are still creatures of the sea, able to leave it only because, from birth to death, we wear the water-filled space suits of our skins."

In 1975, the Indian government gave Clark his first satellite dish. Since then, appropriately enough, he has used the link on several occasions -- including millennium eve -- to address the world he helped to envision half a century ago.

The citizens of the future, Clarke has written, may be "like gods, because no gods imagined by our minds have ever possessed the powers they will command. But for all that, they may envy us, basking in the bright afterglow of Creation; for we knew the universe when it was young." Clarke has preserved his young state of mind; indeed, he often quotes his own epitaph: "He never grew up; but he never stopped growing."

Wednesday, March 5, 2008

Notes From Buffett Meeting 2/15/2008

Saturday, February 23, 2008
Notes From Buffett Meeting 2/15/2008

Note: Students from Emory's Goizueta Business School and McCombs School of Business at UT Austin were invited to come visit Mr. Buffett for a Q&A session. These notes were reproduced to the best of my ability as I heard and as I could recall them from a collection of mine and other students' notes. There is no guarantee that this was exactly what was said, but the intent was to preserve the spirit of the message. Enjoy.


With the popularity of "Fortune's Formula" and the Kelly Criterion, there seems to be a lot of debate in the value community regarding diversification vs. concentration. I know where you side in that discussion, but was curious if you could tell us more about your process for position sizing or averaging down.


I have 2 views on diversification. If you are a professional and have confidence, then I would advocate lots of concentration. For everyone else, if it’s not your game, participate in total diversification. The economy will do fine over time. Make sure you don’t buy at the wrong price or the wrong time. That’s what most people should do, buy a cheap index fund and slowly dollar cost average into it. If you try to be just a little bit smart, spending an hour a week investing, you’re liable to be really dumb.

If it’s your game, diversification doesn’t make sense. It’s crazy to put money into your 20th choice rather than your 1st choice. “Lebron James” analogy. If you have Lebron James on your team, don’t take him out of the game just to make room for someone else. If you have a harem of 40 women, you never really get to know any of them well.

Charlie and I operated mostly with 5 positions. If I were running 50, 100, 200 million, I would have 80% in 5 positions, with 25% for the largest. In 1964 I found a position I was willing to go heavier into, up to 40%. I told investors they could pull their money out. None did. The position was American Express after the Salad Oil Scandal. In 1951 I put the bulk of my net worth into GEICO. Later in 1998, LTCM was in trouble. With the spread between the on-the-run versus off-the-run 30 year Treasury bonds, I would have been willing to put 75% of my portfolio into it. There were various times I would have gone up to 75%, even in the past few years. If it’s your game and you really know your business, you can load up.

Over the past 50-60 years, Charlie and I have never permanently lost more than 2% of our personal worth on a position. We’ve suffered quotational loss, 50% movements. That’s why you should never borrow money. We don’t want to get into situations where anyone can pull the rug out from under our feet.

In stocks, it’s the only place where when things go on sale, people get unhappy. If I like a business, then it makes sense to buy more at 20 than at 30. If McDonalds reduces the price of hamburgers, I think it’s great.


What industry will be the next growth driver in the 21st century and what do you see that supports that?


We don’t worry too much about that. If you’d look at the 1930s, nobody could have predicted how much the automobile and airplane would transform the world. There were 2000 car companies, but now only 3 left in the US and they are hanging on barely. It was tremendous for society, but horrible for investors. Investors would have had to not only identify the right companies, but also identify the right time. The net wealth creation in airlines since Orville Wright has been next to zero. If a capitalist had been at Kitty Hawk and shot him down, would have done us a huge favor. Or look at TV manufacturers. There are hundreds of millions of TV’s, RCA & GE used to produce them, but now there are no American manufacturers left.

If you want a great business, take Coca-Cola. The product is unchanged, they sell 1.5 billion 8 ounce servings per day 122 years later. They have a moat; if you have a castle, someone’s going to come after you.

Gillette accounts for 70% of razor sales at 80% gross margins and it is the same over time. Men don’t change much. Shaving might be the only creative thing they do, like painting the Sistine Chapel.

Snickers has been the #1 candy bar for the past 40 years. If you gave me $1 billion to knock off Snickers, I can’t do it. That’s the test of a good business. You don’t knock off Coke or Gilette. Richard Branson is a marketing genius. He came in with Virgin Cola, we’re not sure what the name means, perhaps it turns you back into one, but he couldn’t knock off Coke. We look for wide moats around great economic castles. Growth is good too, but we prefer strong economics. In the upcoming annual report I have a section titled “The Great, the Good, and the Gruesome” where I talk about these.


How do you define happiness and what about your life makes you most happy? When you make good on an investment, do you allow yourself to enjoy that success by getting excited - and on the flip-side, when an investment turns down, do you find yourself equally disappointed - or do you try to remove emotion from your work, as much as possible?


I enjoy what I do, I tap dance to work every day. I work with people I love, doing what I love. The only thing I would pay to get rid of is firing people. I spend my time thinking about the future, not the past. The future is exciting. As Bertrand Russell says, “Success is getting what you want, happiness is wanting what you get.” I won the ovarian lottery the day I was born and so did all of you. We’re all successful, intelligent, educated. To focus on what you don’t have is a terrible mistake. With the gifts all of us have, if you are unhappy, it’s your own fault.

I know a woman in her 80’s, a Polish Jew woman forced into a concentration camp with her family but not all of them came out. She says, “I am slow to make friends because when I look at people, I have one question in mind; would they hide me?” If you get to be my age, or younger for that matter, and have a lot of people that would hide you, then you can feel pretty good about how you’ve lived your life. I know people on the Forbes 400 list whose children would not hide them. “He’s in the attic, he’s in the attic.” Some of them keep compensating by joining board seats or getting honorary degrees, but it doesn’t change the fact that no one will give a damn when they are gone. The most powerful force in the world is unconditional love. To horde it is a terrible mistake in life. The more you try to give it away, the more you get it back. At an individual level, it’s important to make sure that for the people that count to you, you count to them.

What if you could buy 10% of one of your classmates and their future earnings? You wouldn’t buy the ones with the highest IQ, the best grades, etc, but the most effective. You like people who are generous, go out of their way, straight shooters. Now imagine that you could short 10% of one of your classmates. This part is usually more fun as you start looking around the room. You wouldn’t choose the ones with the poorest grades. Look for people nobody wants to be around, that are obnoxious or like to take all the credit. If you have a 500 HP engine and only get 50 HP out of it, you’ll be beat by someone else that has a 300 HP engine but gets 250 HP output. The difference between potential and output comes from human qualities. You can make a list of the qualities you admire and those you despise. To turn the tables, think if this is the way I react to the qualities on the list, which is the way the world will react to me. You can learn to turn on those qualities you want and turn off those qualities you wish to avoid. The chains of habit are too light to be felt until they are too heavy to be broken. You can’t change at 60; the time to look at that list is now.


Why do you think that despite making your methods publicly available, that relatively few people have been able to emulate your success?


I asked Graham the same question. Everyone took his class at Columbia Business School. He used current examples, and by the end of the semester you would have a portfolio that would’ve made you money. Graham lived a life of sharing. He may have had more money hoarding, but lived happier because of it. The money’s just a figure in the paper, perhaps he would’ve died with 86 million instead of 42 million, but it doesn’t really matter. 90% of the people that took his class ended up doing something else.

At age 11 I started investing, purchasing three shares of Cities Service Preferred. I had read every book on investing in the Omaha library. I was really into charting and technical analysis. I loved it, but didn’t make any money from it. At 19 I read Graham’s “The Intelligent Investor” and it changed my world. Did Ben lose because I read his book? Maybe we competed and he made less money, but it didn’t matter to Graham.

The philosophy either takes immediately or it doesn’t at all. The reason gets down to temperament. People want to make money fast, but it doesn’t happen that way. Graham’s philosophy doesn’t promise enough for many people. You don’t know when it will happen, but you just wait for the fat pitches within your circle of competence. It’s not as exciting as guessing whether the stock price will go up the next day. Most investors in internet companies didn’t know the market cap. They were buying because they thought the stock would move, but if you asked them to write “I would buy XYZ company for $6 billion because”, they wouldn’t get halfway through the sentence. It’s the classic tortoise versus hare, bound to work over time. Charlie and I have educated competitors. Most don’t compete with us, though. It’s fine, we have more than enough money.


What qualities in managers set them apart as great leaders, in essence, where do you find the right balance between "hard" and "soft" skills?


We have 45 managers. Some of them we communicate with once a year, some once a month, some everyday. I usually have dinner with the Blumkins every month, and we go on vacation, because we’re friends. What we look for in managers is a passion for the business. They usually come to us. I’ve never bought from a financial seller. We can’t run the business so I am counting on them to behave well; we have very little in the form of contracts. The business needs to continue just the same after I hand them the check as before. My big question is whether he will still get up at 6 AM just the same with $500 million, and continue to send money to Omaha. I have to look them in the eye and decide whether they love the business or they love the money. It’s fine if they love the money, but they have to love the business more. Why do I come in at 7 every morning, can’t wait to get to work. It’s because I get to paint my own painting and I like applause.

We bought a jeweler, Ben Bridge. It was a 4th generation company, with over 100 stores. They were only interested in selling to us. The family didn’t want to sell to others, the employees didn’t want it. I never met him. He didn’t want to sell either, but the family needed it.

At Borsheims we have a woman from Zimbabwe. She didn’t even have the benefit of an MBA. We didn’t look at a resume, or grades, or HR recommendations, but were looking for passion and we’ll pay fairly because we don’t want the resent that comes with unfairness. We want people that will work regardless.

I got a fax from Pete at Forest River saying this is the type of business you would like to own. He didn’t want to worry about if he died tomorrow, and left his wife and daughter behind. After we made the deal, we had dinner and I brought up the topic of salary. I told him to name whatever number he wanted and I would sign the check. He asked me what I made. I told him $100,000 and he said he didn’t want to make more than me, so we settled on $100,000. Pete called yesterday, and said he wanted to make an offer for another business. We talked for five minutes, I gave him some advice, but I really give them a lot of freedom. I’ve spent $1.7 billion and I’ve never even been to the company, at least I hope it’s there.

I can’t look at this group and tell you which 3 are going to be great managers. I can see it after they’ve been doing it for a while. Look at Mrs. B. She had one son involved in the business and 3 daughters not involved. She wanted a way to fairly distribute the proceeds of the business and this solved her problem. She worked until she was 103, and died at 104. She lived two blocks from the store. She left price tags on the furniture at her home because it made her feel more comfortable, like she was in the store. She left Russia and landed in Fort Dodge, Iowa. She saved $500 for 16 years to start this business that has the top 2 furniture stores in the nation. You can’t hire those kinds of people, no matter what you pay them. We’ve been lucky that we’ve never lost a manager to competitors since 1965. Some retire, some were fired, but we give them the opportunity to paint their own canvas.


If you could have lunch with one person you have never met, who would it be and why?


I would have to say Isaac Newton or Benjamin Franklin. I’ve met a lot of interesting people and some uninteresting ones, too. The two men had a bigger grasp of the world they lived in. But I don’t think I would pass up an opportunity with Sophia Loren.


Mr. Buffett, do you believe that the Federal Reserve is fostering moral hazard thereby leading to the misallocation of capital and subsequent asset bubbles? If so, what are the long term risks?


There is always some introduction of moral hazard when government decides to act in favor of the common good versus letting someone fail. There was moral hazard with the bailout of LTCM and there is some aspect of that with the current situation. But it’s hard to measure because the consequences are 15-20 years out. During the 1987 market crash, Greenspan was new to the job and unsure of what would happen. The specialist system got hit, most of them operated on very little capital and were broke. The Fed provided them with more capital. Will that change future behavior? Maybe, but at the time it was the right call. It’s also resulted in the “Too Big to Fail” doctrine. The big banks, Freddie Mac, and Fannie Mae figured the US Government wouldn’t allow them to fail and the managements of those companies knew that. I would be disinclined to second guess the Fed, they have more information and are trying to do what’s right.


Given your business success, your immense fortune, and your celebrity status, how do you stay so down to earth and humble? Are there specific people or lessons you have learned throughout your life that enable you to maintain this outlook?


I was lucky to have the right heroes. Tell me who your heroes are and I’ll tell you how you’ll turn out to be. One of your most important jobs in life will be raising your children. They will learn more from you than they will in graduate school. My father was a huge influence, and later on Graham came along. I was also never let down by my heroes.

I had nothing to do with my own success. My father was a securities broker and after the Great Crash, he had no one to call. Consequently, I was born in 1930 in the United States during the time of one of the greatest capital markets. I was born with the wiring for capital asset allocation. I had the right wiring at the right time. Temperament is a large part of my wiring. I was naturally good at it, and I used some feedback to develop it better. There is nothing to be arrogant about. Gates says if I had been born earlier, I would’ve been some animal’s lunch. I can’t run, I can’t climb. I’d be talking about allocating capital and the animal would think, “Those are the kind that taste the best.” You have all won the ovarian lottery. There is no reason to feel guilty about it.

I have never given away a dime that has any meaning on how I live. There are people that go to church and they put money in the offering plate that truly makes a difference in how they will live their lives, what they will eat, what presents they will buy for their children. There’s no reason to get puffed up over things you didn’t control.


Due to the credit crisis and consequently large write-downs, banks have made it more difficult to lend healthy businesses capital for increasing efficiency, expansion, new projects, etc., thereby potentially becoming the primary agents restricting growth. What are your thoughts on liquidity in the marketplace and the possibly of it contributing to a recession? Also, do you see a potential for financial institutions not currently in the lending business stepping in to take advantage of the reduced supply of capital?


What we are seeing is a huge repricing and evaluation of risk, correcting for problems of the past. I don’t know of good credit propositions that are going unfulfilled. There’s lots of cheap credit for sensible deals, which I don’t define as anything that happened over the last 12, 18 months. A lot of things that didn’t make sense are being washed out of the system. It is painful for bad decisions. Comparatively, this is not a credit crunch. In 1982 the prime rate was 22% and money was very expensive. In the late 60’s, we made a sound deal there wasn’t any money to be had. That’s not the case now. The Fed has opened the window, and rates are down. It doesn’t mean there won’t be a major recession.


What are some of your biggest mistakes or regrets?


We’ve made lots of mistakes, but they don’t bother me. We’ve had no regrets. We are in the business of making many decisions and there are bound to be mistakes. There are $10 billion mistakes of omission that no one knows about; they don’t show up in the accounting. In 1994 we paid $400 worth of Berkshire stock for a shoe company. The company is now worth 0, but the stock is worth $3.5 billion. So now, I’m happy to see Berkshire go down since it reduces the size of my mistake. In 1973 Tom Murphy offered us NBC for $35 million, but we turned it down. That was a huge mistake of omission.

In my personal life, there are always things I could’ve done differently. But so many good things have happened. It just doesn’t pay to dwell on the bad things. Finding the right spouse is 90% of it. If you are lucky on health and lucky on your spouse, you are a long way home. Getting turned down by HBS was one of the best things that could have happened to me, bad luck can turn out to be good.


Could you comment on the current rise of sovereign wealth funds from the Middle East and Asia and how they are playing an increasing role in how corporations raise capital. Is competition from these sources for the cash flows of corporations affecting your investment strategies or opportunities?


Any competition is competition. The situation of sovereign wealth funds is interesting. A lot of it is China bashing, OPEC bashing and plays right into politician’s hands. Today, the US will buy $2 billion more from the world than they buy from us. In exchange we give them little pieces of paper and they have to buy assets. As long as we consume more than we produce we have to let the rest of the world invest in us. We created sovereign wealth funds and that $2 billion gains interest. US funds feel they can get the best terms from these foreign investors and lately, enticed them into buying equity. China wanted to buy Unocal, a 3rd rate oil producer with production overseas in places like India. US Congress went ape and 395 representatives signed an anti-Chinese resolution to block the deal. For 100 years the US companies went around buying the world’s assets and bribing officials, but told China they couldn’t buy Unocal. The Chinese took it, but they didn’t like it. It doesn’t make sense that we are buying foreign assets, and giving them pieces of paper and then telling them what they can’t do with that money. We have created them and I have no objection to them. I recommend an index fund for these sovereign wealth funds. It gives them exposure to the US market, but they won’t get taken by salespeople with bad deals. In economics you always want to say “And then what?”


Is the individual investor even capable of assessing the riskiness of securities given the large number of institutions/hedge funds in the market?


I don’t think there is much being overlooked now, but I’m forced to look at big things. That’s the advantage you have over me. A few years ago a friend of mine mentioned that I should look at Korea. We bought Posco for 3-4 times post-tax earnings. I found 20 other companies selling at 2-3 times earnings and strong balance sheets. I diversified because I didn’t know the Korean market as well. We are looking for the very unusual. Occasionally things will happen in a securities market that are extraordinary. I like shooting fish in a barrel, but I like to make sure the water’s drained out.

We had that situation a few years ago with the 30 year versus 29 ½ year Treasury bonds. Because of less liquidity, the off-the-run bonds were selling for 30 basis points less, which translates into 3% of principal value. LTCM entered the trade at 10 basis points originally, but they overleveraged and were forced to unwind the position. If you went long/short you could make money really quickly.

Markets are efficient most of the time about most things. But for these opportunities, nobody will tell you about them. They won’t be on CNBC and they won’t be in brokerage reports. You have to go find them yourself. In 1951, after I graduated from school, I used Moody’s and S&P manuals as my sources of information. I went through them page by page. I was like a basketball coach looking for 7-footers. I still have to find out if he’s coordinated, and can stay in school. But if someone comes up to me that’s 5’6” and says, “Wait ‘til you see me handle the ball”, I say “No thanks”. On page 1443 of Moody’s, I found Western Insurance Securities. It had earned $21.66 per share 2 years ago, and earned $29.09 last year. Over the past year the stock was selling for between $3 and $13 per share. I still had to do the work to make sure the earnings were valid. The markets will get it right eventually. But they are there. You don’t have to find too many. Finding 10 of these opportunities in your lifetime will make you so rich. But you can’t be wrong. You can’t have any zeroes. A list of big numbers multiplied by zero will equal zero. You can’t go back to “Go”.


What do you think of aggregate infrastructure investment to stimulate the economy?


I think the best way to stimulate the economy is to give money to the poor. They will spend it. Don’t give it to guys like me. Infrastructure investment makes sense, but we haven’t done it in a while and it won’t do anything for the next 6-12 months. Infrastructure is not big relative to GDP. We are a consumer-driven society, spending 106% of production.


Who do you think will be one of the next greatest investors and are you partial to favoring someone with a similar investment style as yours?


We just finished looking for someone. The Board has 3 candidates to replace me as CEO and 4 candidates to replace me as investor. They are all doing fine where they are, but they would be willing to come over to Berkshire for less pay.

In 1969, I wound up my partnership and I had to help people find someone to manage their money. I recommended Bill Ruane of Sequoia Fund, Sandy Gottesman, who is currently on the board at Berkshire, and Walter Schloss, who I wrote about in “The Superinvestors of Graham and Dodds-ville”. There’s no way they could miss.

But I don’t know many of the newer investors, they’re not my contemporaries. It’s not enough to just look at track records. They aren’t predictive and there will always be a few people that do well. I know guys who can make 50% a year with $5 million, but not with $1 billion. The problem with guys that do well is they attract so much money that it neutralizes their advantage. It’s hard to identify them, and even harder to make a deal to keep them from attracting other capital. It’s like betting on a 12 year old horse that won at 3 years old. It’s also important to avoid managers who use leverage. It’s the reason that investors with 160 IQs flame out.


At the Wesco annual meeting last year, Charlie said, "The best way to get success is to deserve success". Do you recall anything from your experience which best demonstrates how you were able to position yourself to deserve success, and do you have any advice for students on how they can position themselves to deserve success as well?


Behaving decent is a large part of it. Out of school I offered to work for Graham for free and he said I was overpriced. I tried to be useful and visible to him. I gave him stock tips and kept up with him. Almost always good things come from good behavior. Don’t keep score in life. Tom Murphy does not keep score. He keeps doing 20 things for me and I can only hope to return the favor. Keeping score is terrible in marriage and terrible in business. I put myself in the seller’s shoes. With most humans there is a great desire to reciprocate. If you do something for them, they will do 2X for you. How rare is it to work during lunch hours and be the first one there in the morning. You’ll get noticed if you do something extra. It’s good to have a willingness to pitch in when you aren’t going to get credit for it. Charlie and I partnered up in 1959. We always both think we’re right. We disagree but we’ve never fought. And we’ve never held past mistakes over each other’s heads. I recommend reading “Poor Charlie’s Almanack”. It’s amazing, has sold 50,000 copies and it’s still sold independently.


Have there been instances in your career where you have been tempted to deviate from your strategy and if so, how did you handle that?


I’m not that type. I’m not disciplined. I just naturally want to do things that make sense. In my personal life too, I don’t care what other rich people are doing. I don’t want a 405 foot boat just because someone else has a 400 foot boat. Some of my friends have big boats where 55 people are serving 14. Of those 55, some will be stealing from you, some will be sleeping with each other, and I just don’t want to deal with that. My friends have the boats, so I’m the ultimate freeloader. I don’t need multiple houses. If I wanted to do something wild & crazy I could do it, but Anna Nicole Smith is gone. Reminds me of the story of the 60 year old man that got a 25 year old to marry him. When his friends asked how he did it, he replied, “I told her I was 90.”


It seems that the worldwide trend is towards lower corporate tax rates. Do you think that the US risks becoming less competitive if it maintains its current corporate tax rate?


Relative to GDP, government taxation is 18.5% and spending is 20%, so we borrow the balance. The national debt should not be a scary topic and the fact that it’s gone up is fine as long as it’s proportional to GDP. Where do we get that 18.5%? There’s 2.7 trillion in government revenues. 2.2 trillion comes from individuals, and less than 1% of that comes from the estate tax. 1.1 trillion comes from income taxes, with payroll taxes consisting of 900 billion, but it’s capped at the first $100,000 of salary. We want a tax system that encourages greater prosperity, but it needs to take care of the family.

We did an informal office survey by looking at the total tax footprint versus the total income. I earned 46 million and paid a tax rate of 17.5%. My rate was the lowest, the average was 33%, and my cleaning lady paid 40%. The system is tilted towards the rich. The Forbes 400 total net worth has gone from 220 billion to 1.54 trillion, an increase of 7-to-1. You see in legislature that there is lobbying carried on by the powerful over issues such as the estate tax and carried interest for private equity investments. We need to flatten income and payroll taxes, and those making under $30,000 shouldn’t be bothered.

Let’s imagine that 24 hours before you are born, a genie comes to you and tells you devise a social and economic system. The only catch is that after you designed the system, you would choose a paper from a barrel which would determine your demographics. What objectives would you want? You need to devise a system that creates prosperity. It needs to be a meritocracy, to put the right people in the right place. It needs to have a strong education system, and throw off lots of goods and services. It also needs to not discriminate against women or minorities. Even though the per capita GDP is $47,000, 20% of the population makes less than $20,000. We need to eliminate that fear of sickness or old age. A tax code is the codification of a country’s values. But you can’t kill the golden goose of prosperity.


There is always mention that some of your success could be attributed to not buying in to the Wall Street mania b/c you are in Omaha—what importance do you give to balance as it pertains to work and life and what do you do to maintain your appropriate balance?


I have so much fun that it’s not work. I get to do what I want, where I want – on a boat, wherever. My wife was responsible for bringing up the children. Neither of us had problems with that arrangement, and it made sense from an Adam Smith “division of labor” perspective. It will be a much tougher choice for women, and always be somewhat unequal. In my own life I did virtually no social functions or meetings that I didn’t want to do. In my adult business life I have never had to make a choice of trading between professional and personal. I have simple pleasures. I play bridge online for 12 hours a week. Bill and I play, he’s “chalengr” and I’m “tbone”.

After a talk at Harvard, I told them to work for who they admired the most, so they all become self-employed. It’s important to go to work for someone or some organization you admire. I’ve not seen many males having to make tough choices. But women are the ones who have tough situations.

Posted by Dang Le


AlexG said...

Thanks for the link,very informative.
Great to get a small peak of the upcoming annual letter.
2/24/08 12:30 AM
Faro said...

Thanks for the effort in doing this. It's always worthwhile to read Buffett's thoughts and opinions.
2/24/08 2:38 AM
#2 said...

Thank you very much for sharing your conversations with the great man. There's some great stuff here.
2/24/08 5:04 AM
Richard said...

Excellent write up, thanks.
2/24/08 5:21 AM
George said...

Thank you for sharing your notes on this Buffett talk. There is always something new to be learned everytime Buffett speaks.
2/24/08 8:35 AM
zappa said...

Thanks a lot for sharing.

Don't you also love the big man's humor?
2/24/08 11:21 AM
Satish said...

Thanks Dang! This was a great read!
2/24/08 12:30 PM
Anonymous said...

2/24/08 2:22 PM
Anonymous said...

the white on black is hard to read
2/24/08 11:05 PM
Yoni said...

My name is Jonathan Liss and I am an editor at Seeking Alpha. We'd like to run your latest piece, Notes From Buffett Meeting" and discuss the possibility of you becoming a regular contributor to our site. Sorry I posted here - I couldn't find your contact info on your blog.

Please email if you are interested.
2/25/08 3:14 AM
Abhir said...

THanks a superb interview.... very informative and entertaining..Good to hear buffets words on position sizing...
2/25/08 1:39 PM
Anonymous said...

Great post. Thanks.

I just wanted to confirm Buffett said he would have put 75% into long off the run / short on the run 30 years. That's one of the positions LTCM had, but I gather Buffett was distinguihing his approach from that of LTCM because Bufett would have done it less leverage.
2/25/08 5:00 PM
Rick said...

Thanks so much for taking the time to record and post these notes.
2/25/08 5:31 PM
Nick said...

I enjoyed the interview; thank you for taking suck good notes!
2/25/08 11:22 PM
Vishal said...

Thanks for the conversation. It was quintessential Buffett. Excellent as always.
2/26/08 1:04 AM
bevsadmin said...

thanks for the post!
2/26/08 10:09 AM
doctorjo5 said...

thanks. Really great read.
2/26/08 10:14 AM
Topaz said...

Thanks for posting Mr. Buffett's words of wisdom.
2/26/08 12:57 PM
Anonymous said...

First time ever I care to comment.

Just beatiful :)
2/26/08 1:03 PM
John said...

2/26/08 2:06 PM
Antoine Hersen said...

Thanks, very interesting.
2/26/08 3:51 PM
Jay said...

Outstanding. I appreciate your putting this out there for public consumption.
2/26/08 3:59 PM
Rodolpho said...

Thanks for sharing
2/26/08 4:13 PM
William G. Cash said...

Great Interview!

UT Longhorns, that's wasup!

Austin, TX, baby!
2/26/08 4:44 PM
Anonymous said...

Thank you for taking notes, organizing, and sharing.
2/26/08 5:30 PM
Peter said...

great post and very inspirational my friend - I'm glad your blog is getting exposure.
2/26/08 6:33 PM
Geoff said...

Excellent post - good questions and great answers - truly amazing guy!
2/26/08 7:27 PM
Red said...

Thanks for the white on black, it doesn't hurt my eyes so much and is easy to read.
2/26/08 8:41 PM

Always refreshing to read/hear what Buffett says. He can wrap complex ideas in a simple package and that is his mastery.

Thanks for posting this.
2/27/08 1:44 AM
Steve Laz said...

Many thanks for putting this up. Nice to see Emory B-school students asking thoughtful and thought-provoking questions.
Emory alum '83B
2/27/08 9:58 AM
Inquisitor said...

Awesome. Best Buffett interview I've seen, great questions and great answers.
2/27/08 2:05 PM
rajan said...

Thanks Dang for the great service you have done
2/27/08 10:46 PM
Anonymous said...

Above and beyond the call of duty!

Thank you.

PS - I also prefer light (amber/green) text on black backround.
2/27/08 11:54 PM
Anonymous said...

good reading Dang. you made Digg front page.
2/28/08 8:15 AM
Tina said...

What a human being! I wish we had more of such lovely people on this planet. Thanks for providing such wonderful post.

2/28/08 8:47 AM
rtshinn said...

Thanks for the report!
I liked the quote "“Success is getting what you want, happiness is wanting what you get.”
2/28/08 9:39 AM
Anonymous said...

thanks for the post. great content.
2/28/08 9:49 AM
Anonymous said...

Thanks a million for sharing with us. Good Luck.
2/28/08 9:52 AM
Dubagunta said...

Thank you for compiling the notes and spreading the high values and principles of a great man.

Wishing you the very best.
2/28/08 9:53 AM
Anonymous said...

thanks for sharing this.
2/28/08 10:02 AM
Anonymous said...

Thanks for the effort, there is always something to learn from Buffett
2/28/08 1:21 PM
Vinay Menon said...

Thank you for posting. Great write-up.
2/28/08 1:43 PM
tanGent said...

Awesome post! This is what the internet is about: lightly filtered, direct, focused knowledge. Thanks!
2/28/08 1:45 PM
Anonymous said...

Pure gold. Every paragraph like gospel.
2/28/08 2:05 PM
Anonymous said...

Thank you for taking the time to write it up. It's the first thing I have read from Buffett, and I am very excited to keep continuing.
2/28/08 10:57 PM
Anonymous said...

Very impressive note taking. If you don't get called up for PA of the year, then I'm not here.
That was a great read and really appreciated.
2/28/08 11:44 PM
Anonymous said...

nice -
2/29/08 2:40 AM
Anonymous said...

Thanks so much for sharing the Buffett/Emory conversation. More than for the big money, I admire him as an incredibly good person with priorities totally in line. Buffett is so right about the 90% happy spouse thing.
I have been married 33 years to a wonderful man. (Both of us are healthy, too!!) We have raised two wonderful children who actually like us. Both of us are retired teachers, and we love traveling and doing things as a couple!! And.., through wise investing and making sensible decisions, we are also multi-millionaires! During our entire marriage, (including the lean years), we have paid off our credit cards in full every month and cash for all our cars. Our only debt? Our house mortgage! Our motto is old fashioned... if we don't have the money for something we want, we don't need it!
2/29/08 9:27 AM
bobk said...

Enjoyed reading his view on wealth and estate tax with his references to yachts. Have seen him on TV expounding on this. Makes you appreciate his wisdom and wish others were so benevolent and wise. Society doesn't benefit as much from 400 and 450 feet yachts as from education, progessive taxation, social equality and a better standard of living for all.
2/29/08 5:18 PM
chemical treatment centers said...

Great post.
3/1/08 6:02 AM
The Orange Paper said...

Some real good things to learn. It's awesome! Thanks for sharing these notes.
3/1/08 10:54 AM said...

wow, great to read, thanks! He's very direct and open about things, which is refreshing to read.

Here's my favorite quote from this, "Success is getting what you want, happiness is wanting what you get. I won the ovarian lottery the day I was born and so did all of you. We’re all successful, intelligent, educated. To focus on what you don’t have is a terrible mistake. With the gifts all of us have, if you are unhappy, it’s your own fault."

3/4/08 12:53 PM
Derrick Koay said...

Thank you for the posts. It really gives us the insight from the great investor Warren Buffet.
3/4/08 10:59 PM
Shopping Cart Software said...

Very interesting read.
3/5/08 4:11 PM

Monday, March 3, 2008

Tony Martin, still performing at age 95

Tony Martin, still performing at age 95 on 10/21/07. here he is, just about 5 months ago.
love the flashbacks showing the young Tony singing the same song.