来源：http://www.omaha.com/
8:59
Barbara Soderlin (OWH): Fruit of the Loom ad features a stunt woman fighting crime in her underwear.
8:59
Barbara Soderlin (OWH): "You can't underestimate the power of positive underwear."
9:00
Barbara Soderlin (OWH): Clip from 2013 Invest in Yourself 5K in Omaha
Barbara Soderlin (OWH): 剪辑从2013投资自己5K在奥马哈
9:00
Barbara Soderlin (OWH): "It is a beautiful March day in May"
Barbara Soderlin (OWH):“这是五月里的明媚三月天”
9:00
Barbara Soderlin (OWH): (Good thing the weather's better this May)
Barbara Soderlin (OWH):（好事情是这个五月天气更好）
9:00
Barbara Soderlin (OWH): WB fires the starting pistol and people are jogging through #Omaha
Barbara Soderlin (OWH): WB扣动开始的发令手枪，人们慢跑通过#奥马哈
9:01
Barbara Soderlin (OWH): They're going by the World-Herald! I like the guy in the WB fuzzy-eyebrow glasses.
Barbara Soderlin (OWH):他们正经过世界先驱报！我喜欢WB模糊眉毛眼镜里的那家伙。
9:05
Barbara Soderlin (OWH): WB: Clip from Salomon Bros. scandal. Buffett testifying before Congress. "My job is to deal with both the past and the future." (Buffett took control in 1991.) "I want the right words and I want the full range of internal controls. I ask every S employee to be his or her own compliance officer." Asks whether they would have their actions be published on the front page of their local newspaper. "Lose money for the firm and I will be understanding; lose a shred of reputation and I will be ruthless."
Barbara Soderlin (OWH): WB:从所罗门兄弟丑闻剪接。巴菲特在国会作证。“我的工作是同时应对过去和未来。”（巴菲特控制在1991。）“我想说的话，我想要全方位的内部控制。我要求每一个员工是他或她自己的合规官。” 问他们是否会有他们的行动被刊登在当地报纸的头版。“让公司亏钱，我可以理解；失去一点名声，我会无情的。”
9:07
BorsheimsBRK@borsheimsbrkNew post: How Berkshire Weekend Went From 12 Shareholders to 38,000 Shareholders bit.ly/1n8qOvf #brk2014
BorsheimsBRK@borsheimsbrkNew post: 伯克希尔周末如何从12位股东到38000股东bit.ly/1n8qovf # brk2014
9:09
Barbara Soderlin (OWH): Scene: Hollywood Boulevard restaurant.
Barbara Soderlin (OWH): Scene:好莱坞大道饭店。
Piano playing softly.
钢琴演奏柔和
Paul Anka" "Today is a very very special day. I'm singing (My Way) with a very special man, one that we all know and love, Mr. Warren Buffett."
9:09
Barbara Soderlin (OWH): Paul and WB:
WB: Paul, a plane's too fast, greyhound's a blast, the drive relaxes.
PA: Yes, but I'll take the bus, when you pay more taxes."
PA: I wish I were there in your great city.
9:10
Barbara Soderlin (OWH): WB: My way, first may I saw, I pray each day, for Charlie Munger.. Who needs the gym, when next to him, I feel younger.
9:10
Barbara Soderlin (OWH): PA: A midas touch with all that you do
WB: Guess you've not heard of Dexter Shoe
9:11
Barbara Soderlin (OWH): PA: I must say, that Berkshire Hathaway, it seems every day, business is fun here
WB: The true brain, guts and glue, Debbie that's you, you get things done here. You see, we all agree, she's royalty, queen of our palace, heeding each call, Deb does it all
PA: Warren, except for Dallas (!)
9:11
Barbara Soderlin (OWH): WB: To our owners, like Michael Sam, you all came out
9:12
Barbara Soderlin (OWH): Both: It's been a ball, singing this, our waaaay!
9:12
Barbara Soderlin (OWH): OK, now they have disco lights going and are playing YMCA
9:12
Barbara Soderlin (OWH): Berkshire, was a textile mill, until Warren, put his hand on the till!
9:13
Barbara Soderlin (OWH): We love the managers of BRK-A!
We love the managers of BRK-B-ee!
9:13
Barbara Soderlin (OWH): Showing photos of all managers/CEOs
9:14
Barbara Soderlin (OWH): "Value, ti's the way we invest. With the margin, of safety we're never stressed. And so Berkshire helps us feather our nest."
9:14
Barbara Soderlin (OWH): People are dancing in the aisles with the UNL cheerleaders.
9:14
Barbara Soderlin (OWH): Warren is dancing on the floor in the spotlight.
9:15
Barbara Soderlin (OWH): Now he's going back backstage.
9:15
Barbara Soderlin (OWH): "Geico, sells insurance for cars, try DQ, for your next Dilly Bar..."
9:16
Barbara Soderlin (OWH): The Gecko is hugging/high-fiving shareholders.
9:18
Barbara Soderlin (OWH): Movie is wrapping up now. Disco lights still flashing tho.
9:19
Barbara Soderlin (OWH): Here come Warren and Charlie on stage to big applause/standing O.
9:19
Barbara Soderlin (OWH): WB introduces "two very special guests"
9:20
Barbara Soderlin (OWH): WB: Will my friend Paul Anka please stand up.
9:20
Barbara Soderlin (OWH): WB: We're available for weddings and funerals and bar mitzvahs.
9:20
Becky Quick@BeckyQuickEvery seat take, even behind the stage. MT @jtouw @CNBCnow @alexcrippen @andrewrsorkin
9:21
Barbara Soderlin (OWH): WB: Other special guest: "There's a young woman who had a baby, a young boy named Brady in September. She has marshalled together 400+people from our various companies. I just want to say a special thanks to the woman we all love and especially me, Kerry Silva."
9:23
Barbara Soderlin (OWH): WB introduces the board of directors to the loudest applause we've heard so far this a.m.
9:23
Barbara Soderlin (OWH): That's Carrie Sova, meeting planner. Apologies Carrie.
9:24
Barbara Soderlin (OWH): Now showing Q1 earnings slides.
9:25
Barbara Soderlin (OWH): "Our insurance business now has a float of $77B. And that $77B is ours to invest."
9:25
Barbara Soderlin (OWH): "The insurance business is marvelous for us."
9:27
Barbara Soderlin (OWH): "We always advise you to pay no attention to quarterly or annual realized gains or losses in securities. ...
We just try to manage the money as well as we can and we let the chips fall where they may."
9:28
Barbara Soderlin (OWH): Shareholder proposal on dividends:
WB: "Subliminal suggestion that I was so rich that I could live in this grand style to which I've become accustomed."
9:29
Barbara Soderlin (OWH): Slide says 97.07 percent of Class A shares, or 93 percent excluding WB's shares, voted against issuing a dividend.
9:30
Barbara Soderlin (OWH): WB: "You might say to yourself, those are Warren and all his rich friends, all the plutocrats."
But, he says, the B share holders, 96.83 percent voted against. A vote of 45 to 1.
9:30
Becky Quick@BeckyQuickOn proxy vote for BRKA dividend, Class A shares:1% in favor, 97% against. Buffett: "You might suspect I stuffed the ballot box, and I did."
9:30
Barbara Soderlin (OWH): "I'm not sure that there's any company in the world that would get quite that vote."
9:31
Barbara Soderlin (OWH): Relection of WB as a director:
2.95 percent of B shares against/withheld
97.05 percent for
9:31
Barbara Soderlin (OWH): "With that, we're going to do the questioning as we always do."
Journalists on one side, analysts on the other, shareholders in the audience. Will alternate among the groups until noon.
9:32
Barbara Soderlin (OWH): Carol Loomis of Fortune:
9:32
Barbara Soderlin (OWH): "W and Charlie got no hint of what we are going to ask, tho they read the news like we do."
9:33
Barbara Soderlin (OWH): Why did he engage in "very strange, un-Buffett like behavior" on Coke abstention.
9:34
Barbara Soderlin (OWH): WB: The proposal was made by a shareholder who'd owned shares for a long time and was opposed to the option program. his calculations, of the dilution were wildly off. ... But we did talk, or I did talk, to Muhtar Kent, and I informed him that we were going to abstain. I told him that we admired enormously the Coca Cola Company.
Barbara Soderlin (OWH): WB:这个建议是一位长期持股的股东提出的，反对选择程序。他的计算，稀释得很厉害。但是我们的确谈到，或者我谈到，对Muhtar Kent，然后我告诉他我们将要放弃。我告诉他，我们非常钦佩可口可乐公司。
9:35
Barbara Soderlin (OWH): Told him the plan was "excessive." Muhtar and I had a very good discussion right here in Omaha as a matter of fact.
Barbara Soderlin (OWH):：告诉他这个计划“过了。” 事实上Muhtar 和我有一个很好的讨论在奥马哈。
9:36
Barbara Soderlin (OWH): WB: "I think that in terms of having an effect on the Coca Cola compensation practices, ... that that was the most effective way of behaving for Berkshire. We made a very clear statement about the excessiveness of the plan and at the same time we in no way went to war with Coca Cola."
9:36
Barbara Soderlin (OWH): "I don't think going to war is a very good idea in most situations."
9:36
Barbara Soderlin (OWH): "I think the best result for the CC Co. was achieved by our abstention and we will see what happens in terms of compensation."
9:37
Barbara Soderlin (OWH): Charlie: "I think you handled the whole situation very well." Laughter.
9:37
Barbara Soderlin (OWH): WB: "Charlie was the only person with whom I talked over the abstention before. ... We agreed on the course of action."
9:37
Becky Quick@BeckyQuickBuffett on Coke vote: "I don't think going to war is a very good idea in most cases."
9:38
Barbara Soderlin (OWH): WB: Calculating dilution: CC has regularly repurchased shares thru options and the share count has come down somewhat.
But plan to issue options: "That's a lot of shares"
9:39
Barbara Soderlin (OWH): WB: Doing some share-issuance math.
9:40
Alex Crippen@alexcrippen Retweeted by Becky Quick Munger: "I think you handled the whole situation very well." Buffett: "And Charlie remains vice-chairman!" #BRK2014
9:40
Barbara Soderlin (OWH): WB: The company when that is done gets a tax deduction, for $10B, at present tax rates that would result in $3.5B less tax. If you take $20 B of proceeds from exercise of options: The CC Co. receives $23.5 B.
They would be able to buy 391 million shares.
"The dilution... would be 2.5 percent. It's a far cry from the numbers that were getting tossed around."
9:41
Barbara Soderlin (OWH): Questioner:
Berk has a track record of buying successful companies and leaving them alone. Could Berkshire use 3G's methods? Hire a 3G manager to run a BRK subsidiary?
9:42
Barbara Soderlin (OWH): WB: I don't think the two blend very well. I think 3G does a magnificent job of running a business. There's no question it's a different style from BRK and I don't think it would pay to try and blend the two. I think we will see more opportunities to partner with 3G and I think we're very likely to jump at those opportunities.
9:43
Barbara Soderlin (OWH): WB: We're very likely to partner with them. No blending of the two though.
"We've got a system that works very well for us."
9:43
Barbara Soderlin (OWH): WB: "It goes well beyond my lifetime." "But we welcome the chance to join with 3G."
Charlie: "I don't think we've ever had a policy that loved overstaffing."
9:44
Barbara Soderlin (OWH): WB: Do not wish to enforce on every subsidiary as to whether they have too many people or not.
9:44
Barbara Soderlin (OWH): WB: Overwhelmingly, they're managed on a lean basis. "We encourage by example, but we do not encourage by edict."
9:46
Barbara Soderlin (OWH): Shareholder Q: Doug Merrill from Denver
President's approval rating at 40 percent. "Steve Wynn said Obama is the biggest wet blanket to the economy.
You have Obama's ear: The train's going in the wrong direction. Can you conduct Obama to change the train's direction?"
9:46
Barbara Soderlin (OWH): Laughter/applause.
9:46
Barbara Soderlin (OWH): WB: "I don't agree with a number of things you've said there. American business is doing extraordinarily well.
Many of the American people are not."
9:47
Barbara Soderlin (OWH): WB: "Anybody that thinks American business is not doing well should look at corporate profits."
9:47
Barbara Soderlin (OWH): WB: "American business earnings on net tangible assets which is the way to measure profitability overall, it's basically the envy of the world."
9:47
Barbara Soderlin (OWH): WB: "Our tax rates now for corporations are far lower (than in the past)."
9:48
Barbara Soderlin (OWH): Charlie: Silence. (laughter).
"I'm going to avoid this one."
9:48
Barbara Soderlin (OWH): WB: "And people complain about me abstaining."
9:49
Barbara Soderlin (OWH): Q: via Becky Quick: You've stated that if management wasn't capable of delivering a better return than the index, then management wasn't doing the job. Are you changing the yardstick?
9:49
Barbara Soderlin (OWH): WB: Reading from shareholder letter.
"It was obvious that if you have 5 strong years in a row, we will not beat the S&P."
9:50
Barbara Soderlin (OWH): WB: Despite things mentioned about Pres. Obama, the stock market seems to have done very well.
We will underperform in up years.
9:50
Barbara Soderlin (OWH): WB: In any cycle, we will overperform.
9:51
Barbara Soderlin (OWH): Charlie: We should remember that Warren's standard talks about net worth of BRK increasing after corporate taxes.
The indexes aren't paying any taxes. Warren has set a ridiculously tough standard.
9:51
Barbara Soderlin (OWH): "If this is failure, I want more of it." -- Charlie
9:52
Barbara Soderlin (OWH): Question on BRK's intrinsic value: What actions can BRK take to narrow the discount? Would you ever consider an IPO of Berkshire's independent operating units.
9:53
Barbara Soderlin (OWH): WB: No.
Charlie and I really devote considerable effort to explaining which of our businesses, where there's really a significant discrepancy between book value and the true value or intrinsic value of the business.
9:53
Barbara Soderlin (OWH): WB: We've said we are willing and eager to buy stock at 120 percent of book value.
9:54
Barbara Soderlin (OWH): WB: If you ask Charlie and me to write down a figure as we sit here as to the intrinsic value of BRK, we would probably be within 5 percent of each other, but we would not be within 1 percent of each other.
9:54
Barbara Soderlin (OWH): WB: Small units do not have big impact on overall intrinsic value.
9:55
Barbara Soderlin (OWH): Big values are in RR, insurance, utility businesses.
9:55
Barbara Soderlin (OWH): We try to tell you exactly the numbers, and use the words that we use when we're thinking about those businesses ourselves. We only believe in repurchasing shares when we can do so at a significant discount.
9:56
Barbara Soderlin (OWH): WB: "If you buy a dollar bill for 90 cents, you are doing your shareholders a favor. If you buy it for $1.10 you are doing them no favor at all."
9:56
Comment From Guest
will berkshire split the A shares
9:57
Barbara Soderlin (OWH): Charlie: "The stock will eventually go over intrinsic value whether we like it or not."
9:59
Barbara Soderlin (OWH): Question: Man from L.A. Berkshire is known for buying full companies but earlier in your careers that was not known. Acquisitions are disruptive to employees. Q: What do you do to gain the trust of founders or owners of the companies you have bought out in the past?
WB: "Well, we've kept our word to them. We have to be very careful what we promise."
9:59
Barbara Soderlin (OWH): WB: Can't promise no layoffs, but can promise not to sell the business unless serious problems.
10:00
Barbara Soderlin (OWH): WB: We keep some businesses that you would not get a passing grade in business school for keeping them.
10:00
Barbara Soderlin (OWH): WB: "If we behaved differently, the word would get around."
10:01
Barbara Soderlin (OWH): WB: Have had to get rid of only a few businesses.
"We promise the managers that they are going to continue to run their businesses."
10:02
Barbara Soderlin (OWH): WB: "A private equity firm is going to be totally unimpressed with what's in the back of our annual report."
But -- for a family business -- "Some of those people care about where their business goes."
10:03
Barbara Soderlin (OWH): We do have a unique asset in BRK. "As long as we behave properly we will maintain that asset. And really no one else will have much luck in competing with us."
10:04
Barbara Soderlin (OWH): Q via Andrew Ross Sorkin: Tough corporate governance questions:
Your son Howard serves on the board of Coke, and voted to support pay package.
"How can we count on Howard to defend the culture of Berkshire?"
10:06
Barbara Soderlin (OWH): WB: "The nature of boards are such that they're part business organizations and part social organizations. People behave in some ways with their business brain and they behave in some ways with their social brain."
"I don't think I've ever seen a comp committee come in and get a dissenting vote." in all his years of board service.
10:06
Barbara Soderlin (OWH): "It's almost unheard of to question."
10:06
Barbara Soderlin (OWH): Clearing his throat.
10:06
Barbara Soderlin (OWH): Says board service is cushy. "That is not independence."
10:07
Barbara Soderlin (OWH): "They do not look for Dobermans. They look for cocker spaniels and then they make sure the tails are wagging."
10:07
Barbara Soderlin (OWH): "My son Howard, in fact my other two children as well if they were involved, they would have a dedication to the culture of BRK which is clearly defined."
10:08
Barbara Soderlin (OWH): Board chairman does not select CEO or set compensation. He is there to facilitate a change.
10:08
Barbara Soderlin (OWH): "Howard is the perfect guy to carry that out."
10:08
Barbara Soderlin (OWH): WB says he has voted for comp plans that were far from what he would have designed himself. "That is the way boards work."
10:08
Becky Quick@BeckyQuickBuffett on how boards are chosen: "They do not look for Dobermans. They look for cocker spaniels & then they make sure the tails r wagging."
10:10
Barbara Soderlin (OWH): WB: "If you are in any social organization, if you keep belching at the dinner table, you'll be eating in the kitchen."
10:11
Barbara Soderlin (OWH): Greg Warren of Morningstar: Question: Berkshire has generated outsized returns, but size of operations will limit those in the future. What do you believe BRK's cost of capital is? How much confidence that future allocators will be able to generate outsized returns?
10:12
Barbara Soderlin (OWH): WB: "There's no question size is an anchor to performance."
With a market cap of $300 plus Billion, "it just isn't doable."
10:13
Barbara Soderlin (OWH): WB: "If we keep putting billions in and those billions are worth... more than what we're putting in, we'll keep doing it."
10:14
Barbara Soderlin (OWH): WB: Has never seen a CEO who wanted to do a deal where the CFO didn't come in and say it exceeded the cost of capital. "We think we can evaluate businesses and we know the capital we have available."
10:15
Barbara Soderlin (OWH): WB: "We are constantly measuring that opportunity cost."
Charlie: "A phrase like cost of capital ... we just don't use it."
"The answer is perfectly simple: We're right and they're wrong."
WB: "I look good compared to him, don't I?"
10:16
Barbara Soderlin (OWH): Questioner from Denton, Texas, near new furniture mart:
It appears you were able to purchase this business for roughly 85 percent of book value or 2x earnings. Can you comment on the environment in Omaha that enabled you to purchase this wonderful business for that price?
10:18
Barbara Soderlin (OWH): WB: He paid 11 or 12 times after-tax earnings. Bought 80 percent of the company. $60 million purchase price was 100 percent value. The $60 million would have been more than book at the time. Not way more. A multiple of 11 or 12 x earnings. Sales were $100 million. Pre-tax margins in 7 percent range. 4.5 after tax.
"It was not a bargain purchase. It was a great business. It was a wonderful opportunity to join as fine a family as I've ever met."
10:19
Barbara Soderlin (OWH): "I never asked her for an audit."
"Now if you want to talk about bargain purchases we should talk about going out to the Nebraska Furniture Mart."
10:19
Barbara Soderlin (OWH): Sales are up 7 percent this week so far over last year's record sales at NFM.
$7.8 million sales Tuesday alone.
10:20
Barbara Soderlin (OWH): WB was in the Dallas store location last week. "It's a plot of land like you wouldn't believe." oohs and aahs from audience.
WB predicts it will double the volume of any other furniture store in the world.
10:22
Barbara Soderlin (OWH): Carol Loomis question, from an Oklahoma shareholder: About WB's will instructions to put 90 percent of his wife's cash in an S&P 500 index fund.
Why not into Berkshire shares? this might imply that you expect the index fund to outperform BRK in the future.
10:22
Barbara Soderlin (OWH): WB: "That letter didn't come from Vanguard by any chance?"
10:23
Barbara Soderlin (OWH): WB: Reminds shareholders that his shares in BRK will go to charity when he dies. Over 12 years after his estate is closed. My views on BRK at least until 12 years after my death, are as bullish as ever.
10:24
Barbara Soderlin (OWH): WB: On his wife's situation: "That is not a question of maximizing capital. It's just a question of total 100 percent peace of mind on something that can't get a bad result."
"It is not designed for her to get even larger amounts of capital."
10:25
Barbara Soderlin (OWH): Charlie: Warren is "peculiar" on how he distributes money. "I think he's entitled to do what he damn pleases."
10:26
Barbara Soderlin (OWH): Question: BNSF is doing well, but UP doing better and operating more smoothly for customers. Shed light on divergent results? Was BNSF too aggressive in signing up new business? Overdid it on capacity of business?
10:27
Barbara Soderlin (OWH): WB: No question we've had a lot of service problems particularly on our northern route. We have been spending more money than UP and they spend a lot.
10:27
Barbara Soderlin (OWH): WB: Boom in Bakken Shale - -have a lot of trains running there that weren't running five years ago. Says cold weather was an issue.
10:28
Barbara Soderlin (OWH): Matt Rose, BNSF chairman: It's the geographic nature of our franchise. The oil came a lot faster than we expected.
10:28
Barbara Soderlin (OWH): Rose: I have never seen winter weather like that. We had 83 inches of snow in Chicago. Many days below zero in Minnesota.
10:29
Barbara Soderlin (OWH): Rose: When we get to zero to 10 below, things just don't work.
Now, "The railroad is coming back and we're making significant investments to be able to handle all the business out there."
10:30
Barbara Soderlin (OWH): WB: Will have 52 unit trains of fertilizer headed to N.D. in time for planting season. We take it seriously.
10:30
Barbara Soderlin (OWH): WB: "Our earnings will in my view very likely be a lot better."
10:30
Barbara Soderlin (OWH): WB: Dealing with 22,000 miles of track. Says Chicago is a weak link, with bottlenecks, weather.
10:32
Barbara Soderlin (OWH): Question: Guy from Omaha: Question on use of natural gas to generate electricity. Natural gas storage has declined. "How do our companies assure that they have an adequate supply of natural gas" and if the price increases, how do we assure we can sell electricity at a satisfactory ROI?
10:34
Barbara Soderlin (OWH): Greg Abel of BRK energy unit: 39 percent renewable energy in Iowa.
"As we continue to manage these multiple resources there's clearly a way to meet the needs of our customers."
10:34
Barbara Soderlin (OWH): "We're well-positioned to service our customers long term and equally protect the financials of the underlying businesses." -- Abel
10:37
Barbara Soderlin (OWH): Question on successor: Any discussion on replacing Munger? "Will the company continue to be led by a dynamic duo?"
WB: "Charlie, he's my canary in the coal mine." Charlie now 90. "I find it very encouraging how he's handling middle age."
10:37
Becky Quick@BeckyQuickBuffett on Munger: "Charlie is my canary in a coal mine. Charlie turned 90, and he's doing marvelously in middle age."
10:37
Barbara Soderlin (OWH): WB: "I do think it's very likely that whoever replaces me as CEO probably has over the years, ... they'll develop somebody that they work with very closely. It's a great way to operate. BRK is better off because the two of us have worked together.
10:39
Barbara Soderlin (OWH): WB: "I would be very surprised that if a few years after my successor takes over, there isn't some relationship or partnership that enhances the CEO's not only achievements, but the fun they have. But so far, nobody's brought up in the meetings any successor to Charlie. I have a hard time thinking of anyboyd that could be a successor to Charlie."
10:39
Barbara Soderlin (OWH): Charlie: "Most 90-year-old men are gone soon enough."
10:41
Barbara Soderlin (OWH): WB: Says he has a letter on file from each manager telling him what he should do if something happens to them tonight.
10:42
Barbara Soderlin (OWH): Question from Minnesota guy: Buffett said in 2009 that if he was required to invest his total net worth in one company, it would be Wells Fargo.
What would it be today?
10:42
Comment From Guest
michael McLaughlin omaha
10:42
Barbara Soderlin (OWH): WB: "It's a great question, but it's not going to get an answer."
Charlie agrees.
10:43
Barbara Soderlin (OWH): Andrew Ross Sorkin question: Why don't BRK's proxies list compensation for more of its managers/executives?
10:43
Comment From Guest
Quantify the advantage that BRN has over other rail roads because it doesn't pay dividends that leave it's organization. And is that true for the utilities?
10:44
Barbara Soderlin (OWH): Q: and how much should the next CEO of BRK get paid?
Answer on compensation listing:
WB: Says he will write about that in next year's annual report.
10:45
Barbara Soderlin (OWH): WB: Says BRK is following SEC rules on proxy requirements.
"But Andrew, in my sporting mood, I would say Comcast probably has some people they employ that make a lot more money, that would exceed the people they list in the proxy statement."
10:45
Barbara Soderlin (OWH): WB says it could have a negative effect on negotiating salaries. Shareholders of Comcast would be hurt if you published the 5 highest salaries paid at the subsidiaries.
10:48
Barbara Soderlin (OWH): Charlie: Says companies are better off without "adding to the culture of envy in America."
10:48
Barbara Soderlin (OWH): WB: "There's no CEO that looks at proxy statements and comes away thinking, I should get paid less."
10:52
Barbara Soderlin (OWH): Discussing BH Energy:
WB: "I hope that more possible deals for BH Energy come along and I think they will. We may invest many many billions there."
(By contrast, investments in the RR business will be to improve the RR.)
10:53
Barbara Soderlin (OWH): WB: "We always will have $20B around BRK. We never will be dependent on the kindness of strangers. We don't count on bank lines."
10:54
Barbara Soderlin (OWH): WB
"Cash or available credit is a lot like oxygen. If it's absent, it's the only thing you notice. We don't want to be in that position."
10:55
Barbara Soderlin (OWH): WB: Expects to spend more money later this year. But don't feel a "compulsion" to use the cash just because it's there.
10:57
Barbara Soderlin (OWH): Question from John Norwood of West Des Moines: Please don't move the meeting to Dallas. "I've got my system worked out,"
1. Allocation of capital -- how much cash comes up to the mother ship.
2. "You and Charlie, do you ever fight or argue over how you manage your partnership of two."
10:57
Barbara Soderlin (OWH): WB: "We've disagreed on a lot of things, and it's never led, and never will, lead to an argument. We argue with other people but it hasn't occurred."
10:58
Barbara Soderlin (OWH): When he called Charlie about the Coke vote: "We felt alike."
10:58
Barbara Soderlin (OWH): Charlie: "That's one of the problems: when one of us misses it, the other is likely to, too."
10:59
Barbara Soderlin (OWH): WB: "I'm probably a little more inclined to action, wouldn't you say, Charlie?'
C: "Well, you once called me the abominable no-man."
11:00
Barbara Soderlin (OWH): WB on cash: The cash wouldn't be making more money at the parent company than it is at the subsidiaries.
"I know where the cash is and I know when we're going to need cash."
11:01
Barbara Soderlin (OWH): "We're not big disciplinarians of our subsidiaries day by day. ... There's one company I'm thinking of that, I've never been there."
11:01
Omaha World-Herald@OWHnews Retweeted by Cole Epley Charlie Munger says Buffett "once called me the abominable no-man." @barbarasoderlin's live coverage has it all: bit.ly/Sk2CK1
11:02
Barbara Soderlin (OWH): Question via Carol: In an interview in April 2014, Warren said, I hope we will get questions that probe at our weak points. Question: What are your weak points?
11:05
Barbara Soderlin (OWH): WB: "We are very disciplined in some ways, and by ordinary business standards we're sloppy in other ways. A clear weak point of mine would be, I'm slow to make personnel changes. I like the managers we have. Charlie and I had a wonderful friend, couldn't have been a better guy. ... How long would you say we went beyond where somebody else would have acted in that case?"
He doesn't really answer.
Charlie: Says we shouldn't sweep money from companies like it's blood.
WB: We've waited too long on managers, though.
C: Sure, you and I participated in taking one manager directly from the office into an Alzheimer's home.
(Paraphrasing here.. it's a bit hard to hear.)
11:07
Barbara Soderlin (OWH): WB: There may be downsides to their style, but: "What they won't be able to measure is how much on the positive side we have achieved with dozens and dozens of people because we gave them that same sort of leeway."
No HR Department at Berkshire.
"That would be almost unthinkable to other companies."
11:07
Barbara Soderlin (OWH): Charlie: "By the standards of the rest of the world, we over-trust." But he notes it's working.
11:08
Barbara Soderlin (OWH): Charlie thinks too many internal controls will "do more harm than good."
11:08
Barbara Soderlin (OWH): Question on Sees Candy: Profit growth has stalled. Why successful in 70s, 80s, 90s, but not in this millennium?
11:09
Barbara Soderlin (OWH): WB: "The boxed chocolate business is basically not growing."
Decades ago, most major cities had lots of chocolate/candy shops.
11:10
Barbara Soderlin (OWH): WB: "Boxed chocolates have lost position dramatically. Primarily I would guess to solid snacks of one sort or another." "Sees has done remarkably well, far better than any chocolate company in the country."
11:11
Barbara Soderlin (OWH): "We can't do much about increasing the size of the market." Have tried moving out of Sees' California geography.
11:11
Barbara Soderlin (OWH): WB: "It doesn't travel that well."
11:12
Barbara Soderlin (OWH): WB: Discusses regional preferences on chocolate.
"We've done very very well in Sees. It not only has provided us with earnings we've used to buy other businesses; ... but it opened my eyes to the power of brands and probably you could say that we made a lot of money in Coca Cola because we bought Sees."
11:13
Barbara Soderlin (OWH): Bought Sees in 1972.
Charlie: Sees -- "Its main contribution to Berkshire was ignorance removal."
11:13
Barbara Soderlin (OWH): Charlie: "What we knew originally wasn't enough. We were pretty damn stupid when we bought Sees."
Says the secret to BRK is "ignorance removal."
"The nice thing left is we have a lot of ignorance left to remove."
11:17
Barbara Soderlin (OWH): Question: Bank of America's Tier 1 equity ratio?
"That error they made does not bother me. We work on our fingers."
"You do the best you can."
That error did not affect their GAAP reported numbers. "It doesn't change my feeling about the BofA or its management one iota."
11:18
Barbara Soderlin (OWH): Becky Quick question: Question from Madison on NetJets:
What are the current prospects for NetJets?
11:18
Barbara Soderlin (OWH): WB: "It's a perfectly decent business." Peaked in new unit volume coincident with stock market in 2007/2008.
11:19
Barbara Soderlin (OWH): WB: Demand fell off, contracts ran out in 2011/2012; a lot of customers did not renew until about the last six or eight months.
"It is not a huge growth business at all. It's a very large size business." Has 60 percent of market share.
11:20
Barbara Soderlin (OWH): "I don't see the market being double or triple the present size." Will soon expand to China but that's a very long-range play.
11:20
Barbara Soderlin (OWH): Flight hours have picked up in last 6-12 months. Owners using the planes more.
11:20
Barbara Soderlin (OWH): A satisfactory business but doesn't expect much growth.
11:21
Barbara Soderlin (OWH): Q: How large of an acquisition is BRK comfortable targeting? Can the big holdings be a source of funds?
11:21
Barbara Soderlin (OWH): WB: "Our goal is to buy really good businesses and big businesses and businesses where we like the managers and businesses we think we can grow over time."
11:22
Barbara Soderlin (OWH): Wants to add earning power to BRK. "If the opportunities were large enough and we needed to raise some money, we can dip into a huge reservoir of securities and still have a huge investments thereafter. It hasn't come to that."
11:22
Barbara Soderlin (OWH): Has $40B+ of capital and willing to take it to $20B.
11:24
Barbara Soderlin (OWH): Charlie: Acquisitions have been and will be "irregular."
WB: People think they get turned on by stock buying.
"What really turns us on is finding a business we want to buy that fits well with BRK and that will be earning money for BRK years from now."
11:26
Barbara Soderlin (OWH): Question from Italy: Increasing leverage for BRK -- wants a discussion. Why not go out and ask for several billion in bonds with a long maturity and maybe even with some earlier ... callable option, an make a good use of it?
11:27
Barbara Soderlin (OWH): WB: Says it's a good question. Says they can generate funds through flow, not equity. "We don't like the idea of operating a very conservatively leveraged company and then changing courses, so the people who bought bonds rated AA find themselves with much lower rated bonds."
Don't mind leveraging the RR or utility businesses more, though.
11:27
Barbara Soderlin (OWH): "Both of them could withstand a lot more debt."
11:29
Barbara Soderlin (OWH): WB:
"If we see a really good $50B deal we'll figure out a way to do it."
11:30
Barbara Soderlin (OWH): Question from Illinois: On climate change. BNSF hauls coal; its profits could shrink if coal burning is curtailed. How do their investments align with the risks and opportunities posed by climate change?
11:31
Barbara Soderlin (OWH): WB: Says insurance business doesn't operate in the "time period" that climate change will operate over.
Low year-to-year change.
11:32
Barbara Soderlin (OWH): "We will continue to develop alternative sources of energy."
"We're happy to carry the coal, but beyond that we are a common carrier." -- other goods they can carry, and are by law required to carry the fright offered to them.
11:33
Barbara Soderlin (OWH): Doesn't think climate change should be a factor in the decision making process.
Charlie: Thinks people are "over-climbing" when they say they know how climate change affect business.
Charlie: "The people who think they know exactly what's going to happen .. are mostly talking through their hats."
11:33
Barbara Soderlin (OWH): Charlie: Says the company is "beautifully positioned" to make money on wind, solar energy.
11:35
Barbara Soderlin (OWH): Question: Todd and Ted: How much are these lieutenants managing, and how much will their roles expand? When can we expect to see them join WB and Charlie up on stage?
11:35
Barbara Soderlin (OWH): WB: They are managing a little over $7B. Will be handing more in the future.
11:36
Barbara Soderlin (OWH): WB: "They're both terrific additions to BRK beyond their investment skills. They know a whole lot about business. They know a whole lot about management."
11:38
Barbara Soderlin (OWH): Question from Toronto on "Bubbles" : If you were running the Fed, what would be your policy with respect to interest rates?
11:38
Barbara Soderlin (OWH): WB: "I don't think I would be doing much differently."
11:39
Barbara Soderlin (OWH): "Ben Bernanke was a hero both at the time of the crash or the panic, and subsequently, I think he is a very smart man, he handled things very well."
11:40
Barbara Soderlin (OWH): WB says many members of the Fed did not understand how serious things were. Gives credit to Bernanke since he was not getting a unanimous view from those around him.
11:40
Barbara Soderlin (OWH): "From everything I've seen of Janet Yellen, I feel the same about her."
But does not know what will happen if you keep rates close to zero for so long.
11:42
Barbara Soderlin (OWH): WB: "This is not a bubble situation at all that we're living in, but it is an unusual situation we're living in."
11:43
Barbara Soderlin (OWH): Question: No credentialed bear? Even when your businesses include independent businesses including bricks and chocolates? Will successors be able to manage the diverse businesses so well?
11:43
Barbara Soderlin (OWH): WB: "The model has worked well for America" if you consider the Dow Jones industrials as "one company."
11:44
Barbara Soderlin (OWH): WB: "Owning a group of good businesses is not a terrible business plan."
11:45
Barbara Soderlin (OWH): WB: "I think our business plan makes nothing but sense, to own a great group of businesses, outstanding managers, conservatively capitalized, with one enormous advantage most people don't understand: capitalism is about the allocation of capita. We have a system at BRK where we can allocate capital with out tax consequences."
11:46
Barbara Soderlin (OWH): WB: "There's nobody else really better situated to do that than BRK. But it has to be applied with business like principles rather than with stock promotion principles."
11:48
Barbara Soderlin (OWH): Charlie: Differences between BRK and other conglomerates -- "They were hell-bent to buy something or other quite regularly and we don't feel any compulston to buy."
Closer to Mellon brothers than Gulf & Western.
"I don't think we're a standard conglomerate."
11:49
Barbara Soderlin (OWH): Q: What is Forest River (RV manufacturing firm) doing differently from Thor (a competitor)?
11:50
Barbara Soderlin (OWH): WB: Says the owner bought it out of bankruptcy, rebuilt it, then approached WB about selling. "We've lived happily ever after."
"I've never been to Forest River." It's based in Indiana. "I hope it's there."
11:51
Barbara Soderlin (OWH): Now a $4B business. WB has had only 3-4 phone calls with the owner. WB doesn't know much about competition with Thor. "It would be tough to compete with Pete under any circumstances." His IT dept. has only six people.
"It's his company. I couldn''t run an RV company."
11:53
Barbara Soderlin (OWH): Question from Toronto resident about oil sands industry, and its impact on BRK:
11:54
Barbara Soderlin (OWH): WB: "It's not a huge impact. We have a crane business at Marmon that does a lot of business in oil development."
"We will soon have a transmission operation that will cover 85 percent of Alberta."
"Oil sands are huge. We own some Exxon Mobil."
11:56
Barbara Soderlin (OWH): Are moving 700K barrels a day of crude oil. Rail is 2x as fast at moving oil than pipelines. But are in the crude pipeline business in a small way through ownership of an additive producer that helps oil flow faster thru pipelines.
"I think the oil sands are an important asset for mankind obviously. ... But I don't think it will dramatically change anything at BRK."
11:57
Barbara Soderlin (OWH): Noon now.
Warren gives an update on his bet over hedge funds vs. S&P index.
11:57
Barbara Soderlin (OWH): "It's getting to be more fun to give these results every year."
11:58
Barbara Soderlin (OWH): Six years into the bet.
Cumulative results: 43.8 percent growth for index; 12.5 percent for the hedge funds.
11:58
Barbara Soderlin (OWH): WB: S&P has beat hedge funds each of last five years.
11:59
Barbara Soderlin (OWH): WB: The wager $ is now invested in BRK stock and the prize will be more than $1 million.
12:00
Barbara Soderlin (OWH): Meeting is now on a break until 1 p.m. I am going to grab some lunch and will be back in a bit with more updates. -- Barbara
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