AUDIENCE MEMBER 00:11
My name is Alan Rank from Pittsburgh.
I first want to thank Susan Jacques for returning the cocktail yesterday, and I hope she was rewarded with good sales at Borsheims. Question is regarding the fact that you don’t report details of anything under $750 million, and with the change of the values of small-cap in relation to large-cap, would that be something that Berkshire or individuals might try to look as opportunity with the small-cap premium shrinking, as it has? WARREN BUFFETT 00:50
We don’t worry about whether a stock is small-cap or large-cap except to the extent that by now we’ve gotten to a point where anything below a certain level just is not of interest to us because it can’t be material to our results, so — We never think of opportunities as existing because something is small-cap, or sectors, or all that, you know, what generally gets merchandised. So our cutoff point is set more or less at the point where we think it’s material. That’s not as defined by the SEC, we could have a higher limit. But we think when you get down below 2 percent of assets or thereabouts that the reporting of positions would not affect anybody’s calculation of intrinsic value or give them insights about the way we run the business, but it would be more for the people who were looking for things to piggyback on. And so we will move the cutoff point up as we go along. Because of our size, we will never be in companies that have capitalizations that, you know, of a half a billion or a billion dollars, because we just can’t put enough money in it. Occasionally we’ll be in one just by accident. But we’re looking at things that we can put $500 million in ourselves, at least. At 500 million, a 5 percent position has a $10 billion market cap. That limitation has hurt, will hurt, is hurting, our performance to some degree. You would — if Berkshire were exactly 1/100th of its present size in all respects, owning the operating businesses it did but all 1/100th the size, our prospects would be better than they are with the kind of money we have presently. Charlie? CHARLIE MUNGER 02:50
I’ve got nothing to add. WARREN BUFFETT 02:52
OK. Zone four, please.
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