I’m Eric Butler (PH) from Menlo Park, California. A couple of questions, one serious, one not quite. Considering Berkshire Hathaway is well run at low cost, and is diversified, why should anyone do anything but put all their money into Berkshire Hathaway instead of maintaining a diversified portfolio? And in some of these hagiographic kind of biographies, it’s apparent that you have other investments yourself beyond Berkshire Hathaway. The second question I had, is there any significance to the fact that the Omaha World-Herald does not include Berkshire Hathaway in its stock tables on any day? Is this a sign that they do not honor profits? WARREN BUFFETT
(Laughs) No, they — actually, they have a separate little table called Midlands — I think it’s entitled Midlands Investment. But they pick out about 50 stocks that are of particular interest to people in this area, and they lift those from the regular table and put it in this separate table, which is usually on a second page right following the main stock table. So they give us our just due on that, but you do have to — you should look in a different table for that. Second question about putting all your money in, I’ve got 99 percent of my money in Berkshire. But it was bought at a different price. (Laughter) And Charlie’s was bought a little cheaper, too, I think. So you know, we like the idea of having it all in there, but we don’t recommend that people do that because it’s — you will get very low-cost management. What we hope — well we hope is that from this point forward, that that cost does not reflect its value. But the price at which you enter is very important. You do get a great group of businesses. You get a lot of great operating managers. You get very reasonable costs. But that is fairly widely recognized now compared to the past, and people pay more for it than they used to. I’m still very comfortable with it, and I think Charlie’s comfortable with it, too. But everyone has to make up their own mind about price. Charlie? CHARLIE MUNGER
Yeah. Eventually, if the success continues and we have more of this hagiography, the stock will get to such a high price that it’s no longer sensible at all to buy. We hope we dampen that process as we go along. And of course, there’s always the very substantial chance that we’ll just fail to meet expectations due to the vicissitudes of life. WARREN BUFFETT
Falling on our face is what we call it. (Laughter)
~ Please visit the site above for full video of Berkshire Hathaway Annual Meeting.
1. The entry price is very important.
-A good business can be a bad investment, if you pay too much for it-
2. Widely recognized stocks; people tend to pay more for it than they used to.
-In other words, the investment return will not be as great as before-