Hello. My name is Larry Whitman (PH) from Minot, North Dakota. You have both talked today about the shrinking universe of stocks you could purchase, less margin of safety than ever, and a higher opportunity cost. And you’ve also talked about looking to, potentially, purchase your great companies that you already have at reasonable prices. And so I wonder if by talking so positively about some of your stocks — in particular Disney, such as in the ’95 annual report when you talked about actually telling everyone that you were buying more shares on the open market and, again, at the ’97 meeting — at their meeting — when you talked about maybe not selling the shares — those were both opportunities, maybe, when Disney may have dropped, because of such things as increased debt, or even people’s concern about the Ovitz compensation package. And I just wondered if that may hurt your ability to buy these great companies at reasonable prices by talking so positively about them when, in fact, maybe you could buy them at lower prices when people get irrational. WARREN BUFFETT
Yeah. You’re saying that — which I probably agree with — that if we would say the world is going to hell at Coke or Disney or Gillette — (laughs) — we might be better off, in terms of being able to buy more stock. But, you know, I got asked the question at Disney and I answered it. And that’s my general approach, that — I think it’s usually a bad mistake to sell your interest in wonderful businesses. I don’t think people find them that often. And I think they get hung up, if they’ve sold them at X that they want to buy them back at 90 percent of X, or 85 percent of X, so they’ll never go back in at 105 percent of X. I think, on balance, if you are in a business that you understand and you think it’s a really outstanding business, that the presumption should be that you just hold it and don’t worry. And if it goes down 25 percent in price or 30 percent in price, if you have more money available, buy more. And if you don’t, you know, so what? Just look at the business and judge how it’s doing. But there’s no question. I mean, we try not to talk very much about the businesses, except maybe to use them as an illustration in a teaching mode or something of the sort. We’re not touting anything. And I did try to stick those precautions in when I do talk about them as being wonderful businesses, so people don’t take it as an unqualified buy recommendation or something of the sort. But we won’t try and put any spin on any — when we’re talking about businesses generally. We may not talk about them at all. You know, if we’re buying something, we might be — particularly if no one knows that we’ve been in that stock at all — we might be somewhat quiet about the fact. But we don’t want to talk down something in order to buy it. Charlie? CHARLIE MUNGER
Well, I always — Jerry Newman, as I understand it, didn’t like Ben Graham giving all these courses explaining what Newman and Graham were doing, and — But Graham’s attitude was that he was a professor first. And if he made just slightly less money by being very accurate in what he taught, why so be it. And I think it’s fair to say that Warren has assimilated a bit of that ethos. And I think it’s all to the good. And if it costs us a tiny, little bit of money from time to time, there are probably compensating benefits. And if there aren’t, it’s probably the right way to behave anyway. WARREN BUFFETT
Charlie, if you were in a less charitable mood, I might point out I didn’t behave that way till I got rich. (Laughter and applause) Actually, I used to teach a course at what was then the University of Omaha. And we’d use all these current examples. And things were cheap then — (laughs) — that nobody paid any attention.
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Just follow your own values.
(There is no right or wrong answer to it)