1962.06 Omaha news interview re: a stock drop
http://www.youtube.com/watch?v=REhg_bv7srM
- notice his more formal way of speaking compared to his current style of speaking. For example, he uses the phrases "it's not to be unexpected", "unusual factors", "a rather poor forecaster", "has not materialized", "self-generating mechanism". Someone might argue that people were more formal in the '60s, but you can listen to the interviewer's speaking style when asking the question and can clearly hear that Buffett is being more formal than the interviewer. I would guess that it's a result of Buffett not yet being as well-known as he is nowadays, and so he felt a need to put on a professional image.

1992.09.02 Talk @ Omaha Press Club Education Committee
http://www.youtube.com/watch?v=bZOMSYXIt0Y
38:30 - "I read everything...I spend about seven hours a day reading."

1992 article in TNR by Michael Lewis: "The Temptation of St. Warren"
http://www.tnr.com/article/politics/the ... -st-warren
- Lewis basically criticizes Buffett for hypocritically saving Salomon Brothers' CEO John Gutfreund from a LBO while also shouting about the evils of Wall St LBOs (which Salomon Brothers participated in).
- He also claims that Buffett's success was a result of random chance (EMH).
- He draws attention to Buffett's cultivation of a folksy good-natured guy, which serves Buffett's purposes. Straight out of Machiavelli: "Every one sees what you appear to be, few really know what you are, and those few dare not oppose themselves to the opinion of the many..."

1998 University of Florida Talk
https://www.youtube.com/watch?v=2MHIcabnjrA&t=23m14s
- Just like Mike Burry with Joel Greenblatt, Warren attracted the attention of big-shot Ben Graham by sending him investment ideas over the course of several years. Source:
24:14 - "...but I kept pestering him; I sold securities for three years, and I kept writing him and giving him ideas and doing all these things...finally I went to work for him for a couple of years."
- at 8:23 he says internet companies can't be valued b/c you don't know what's going to happen in the next 10 years. that's why he doesn't invest in them.
Q: But what if you're operating on a shorter timeline?
A: I think he would say that you would then become too susceptible to the ups and downs of the market; he invests in good businesses because he knows that he can hold onto the stock long enough to wait out long periods of low market prices; if you had an internet company and all of a sudden stocks became undervalued for 5-10 years, your business might disappear before things recovered.

http://www.youtube.com/watch?v=txYL_claSDU
- Awesome, awesome, awesome explanation of the importance of a business's reputation.

Short chat re: Gambling
http://www.youtube.com/watch?v=mChWRozpNyA
- He's against gambling b/c it's just redistribution of money with no net positive effect on society, and it causes a bunch of social problems (stealing, etc.)
- What I find strange is that he owns businesses that produce products like Coca-Cola and Frito-Lay chips that also depend on habit-forming behavior and produce problems (obesity). So my question for him would be, "At what point are long-term costs outweighed by short-term pleasure?"

2001 Talk at Terry College of Business
http://www.youtube.com/watch?v=2a9Lx9J8uSs
- he starts w/ some jokes about nebraska
- then he covers common issues:
1. go to work for people you really, really admire
2. Your CHARACTER is going to be the biggest factor in your success. BH looks for intelligence, initiative (energy), and integrity. He tells how Benjamin Franklin and Ben Graham both made a conscious effort of getting the character traits of people they most admired.
~13:30 - he looks for businesses where he can predict what the business will look like over the next 10 years (eg Wrigley's chewing gum). He gives the example of the auto industry, and says how it had 2,000 companies competing, and 3 winners, and that it's hard to tell who's going to come out on top. So you could be RIGHT about the impact that the industry would have, but have no idea who'll win. "...because the economic characteristics of the business were NOT easy to define."
~15:40 - He says a surer way to make money from these technology changes is to bet against the companies that are likely to lose ground. Ex: bet against horses when the auto comes out. He names three auto companies that were in the Dow 30 in the '30s(?) but eventually "got creamed".
~17 - he gives the second example of the plane industry. He gives that statistic of the aggregate profits being less than 0 over the 20th century, but isn't that pretty common among any profitable industry? What would that statistic be for the insurance industry (which Buffett invests in)? Or other industries that Buffett invests in?
~17:30 - he gives the other examples of TV and radio not having led to money
- 18:40 - "Understanding the economic characteristics of a business is different than predicting the fact that an industry is going to do wonderfully."
- 20:00 - Q: What's the intrinsic value of a company? A: Its future cash flows. A stock analyst's job is to change a stock into a bond (b/c a bond has a clear future payout, so the analyst is supposed to predict a stock's future payout). He gives an example of thinking about buying the ENTIRE coca-cola company for its current market price, and how that's a question of its future cash flows. He says he always imagines he's buying the entire company.
- 26:00 Q: Any discouraging moments in your career? Any advice for people to get through it? A: Buying BH was a mistake, even though he did buy it cheap. He explains his cigar-butt approach to investing. "Time is the friend of the wonderful business; time is the enemy of the lousy business." He says buying an airline was a dumb, dumb mistake, and he got lucky about the outcome. @29 he talks about how he lost $2k in an investment in a gas station when he was 20 years old, when his total wealth was $10k.
29:50 - he says the biggest mistakes by far were when he DIDN'T act, and not those mistakes where he DID act. ~31:25 - to act on a small scale when you've got a major opportunity is just as big a mistake as doing nothing. You've really got to seize those rare opportunities.
31:30 - he gives his punch card thought experiment
32:50 - Q: How do you know when to throw in the towel on an investment? A: When I started out I had way more ideas than money; he went through Moody's page-by-page twice. He found businesses he could understand that were selling at 1-2 times earnings. He says now BH has more money than ideas. He says now BH wouldn't sell the businesses even if they're offered 3 times the amount of money that the business is worth, b/c he doesn't want to break the relationships. He says if you could only pick one characteristic in a spouse to make a marriage last, it should be low expectations, and he wants his shareholders to have low expectations for the growth of BH, so he tells them he wouldn't sell BH's wholly-owned businesses if he was offered more money than they were worth.
37 - Q: What's BH's policy toward having its businesses use tax shelters? A: BH participates in a small way, but it isn't a big factor.
He's then asked about philanthropy
46-47 - He talks about how he was just lucky to be born in the US in the 20th century. I'm not so sure about that, b/c even if he was born in another country his behavior (going against the grain, looking for opportunities others are ignoring) could have risen him up. Like in The Good Earth.
48-57 - Q: What do you think the market will do in the aftermath of the tech stock bubble? A: [He gives a great account of the stock market in the 20th century; this is well worth watching many times]
~57 - Q: What's your opinion on Greenspan lowering interest rates? A: Greenspan is a smart guy who wants to do what's best for the US. The Fed's "brake" is way more powerful than its "gas pedal".
1:03:00 - Q: Advice for people who want to start a small business in an age of competition against huge corporations? A: Different businesses have an advantage from scale, and some businesses DON'T have any advantage from scale. He gives Wal-Mart as an example of a small guy going up against a huge established corporation (Sears) and crushing them.
1:05:00 - He tells the story of the Nebraska Furniture Mart
1:11:48 - You can't institutionalize the level of drive that the founder of the Nebraska Furniture Mart displayed, where the person thinks day-in and day-out how to win.

2005 Discussion w/ Bill Gates @ University of Nebraska

http://www.youtube.com/user/WarrenBuffe ... 4_jj843x2Q

- Warren stresses picking the right heroes; this reminds me of Sam Wyly talking about reading biographies of successful people to inspire himself, and reminds me of the inspiration and ideas I got from previous high-scorers while I was preparing for the LSAT.

2006 The One Percent (Documentary)
http://www.youtube.com/watch?v=HmlX3fLQrEc&t=50m18s
- Buffett apparently sent his step-granddaughter a letter saying "you are no longer a member of our family" because she talked to the filmmaker. She was the adopted daughter of Buffett's son, and the biological daughter of Buffett's son's ex-wife. But the film doesn't mention that second part.
- "I feel that who my grandfather is publicly--as a public figure--and who my grandfather--Warren Buffett--is as a grandfather, as a father, as a brother, as a son, are two completely different things." [I had gotten exactly the same sense from reading his biography]

2007.10.19 Interview
http://www.youtube.com/watch?v=RIKPu6eLnxY
- VERY interesting: he says he doesn't look at the market value of a company until he has already looked at the company's annual report and decided for himself what he thinks the company is worth. Otherwise the market value will influence him. "I didn't look at the price first. I look at the business first and try and figure out what it's worth, because if I look at the price first I'll get influenced by it."

2010 May - great interview with FCIC
http://fcic.law.stanford.edu/interviews/view/19
- the most important part of a business is pricing power; management isn't really as important. so buffett disagrees with phil fisher about the importance of scuttlebutt. buffett didn't meet with the management of moody's because he knew the business was a duopoly.
- at around 17:00 he seems to repeatedly dodge the question of when he knew about the bubble
- at around 18:00 he talks about how the '29 crash came from a sound premise that got distorted over time until "the price action takes over". the sound premise was Edgar Lawrence Smith's "Common Stocks as Long Term Investments"
- at around 25:00 he talks about a farmland bubble in the midwest that came about because of the inflation in the country at the time; i wonder what Burry and the other hedge fund managers investing in land right now would say about that
- 26:45 - On why he sold his Fannie Mae / Freddie Mac shares in 2000: "I was concerned about the management. [...] Anytime you have a large financial institution that starts promising regular earnings increases, you're going to have trouble. [...] If people are thinking that way they are going to do things that are unsound. [...] They were buying Phillip Morris bonds, trying to arbitrage the government's credit."
- at around 28:00 he talks about Freddie Mac "arbitraging the credit of the US government". not sure what that means, exactly.
- at around 34:00 he talks about CDS and the problem of derivatives with a long settlement period (ie how long out the insurance is for). selling insurance for a 30-year period is a bad idea b/c it's hard to judge what the world is going to look like.
- at around 39:00 he talks about how he defines speculation vs investing vs gambling. he says the key to investing is looking at the income from the asset itself, while speculation is concerned with the "price action". if you care whether the stock market is open in the next year or few years, you're probably speculating. Gambling is participating in a transaction that doesn't have to be part of the system. For example, betting on the outcome of a football game doesn't need to happen in order for the football game to go on. However, if you're betting on the price of October wheat, that wheat DOES need to get sold and it does need to have a price determined.
- at 50-52 he says that the people at the top of the financial institutions should have "draconian" downside if the place gets into trouble. Kyle Bass mentions a similar idea when he talks about Swiss bankers being personally liable for the debts of the banks they run.
- at around 58-59 he mentions the same idea i've come to: that market systems can lead to unequal compensation between different fields in which people are working just as hard as each other and are just as smart. it's why finance is much more lucrative than law, and why working as a garbage man in the US is much more lucrative than working as a garbage man in mexico.
- at around 1:00:00 he mentions that it's really hard for financial companies to retain talent b/c it's so easy for people to go to another company (eg what Michael Lewis talks about in Liar's Poker about Salomon Brothers)
-1:34 - He thinks owning a home can be a great thing; it's a great way for the average Joe to short the dollar.

2011? Interview
In the clip below he mentions a benefit of apprenticeship: being INSPIRED by the person you're working for. he was inspired by Ben Graham:
"...I got inspired working for [Ben Graham], just being around him every day"
http://www.youtube.com/watch?v=mXbPxMJY3PE&t=1m27s

2012 - CNBC - The Billionaire Next Door Goes Global
http://www.youtube.com/watch?v=gGikba87 ... ure=g-vrec
- there's actually a lot of great stuff in this video
- 11:30 - he references the idea of the world going "flat", which suggests he read Thomas Friedman's book

2014.02.24 - Fortune - Buffett's annual letter: What you can learn from my real estate investments
- Good stuff
2016.11.02 - Bloomberg - Buffett Talks His Early Career in Finance and Advice for Investors on 'The David Rubenstein Show'
- Great info here.
- Nugget: When selling the pinball machines to barber shops, he and his partner pretended to be working for an older man, and when they needed to take an unpopular position, they'd say they'd "bring it up with Mr. so-and-so".
- He sent a letter to Graham and Dodd after learning that they taught at Columbia and asked if they could help him get into the school.
- He said that by the time he started working for Graham he already had the book practically memorized.
- He said that working for Graham didn't actually teach him that much (beyond what he'd already learned from Graham's book); the big benefit was the inspiration it gave him.
- He thought about going to law school after coming back to Omaha after working for Graham!

Books

Buffett: The Making of an American Capitalist

This is a great book.

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Mentions of the Book
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Michael Burry:
"Warren Buffet was an inspiration for me go to into money management. And I largely patterned my early career after what I'd read about him in 'The Making of An American Capitalist' by Roger Lowenstein, which I thought was a phenomenal book."

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General Observations
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- Warren is far, far more secretive than Mike Burry; although Mike Burry did well from his subprime bet, he didn't make out nearly as well as he could have, primarily because too many people knew what he was doing: Mike was dealing directly with the banks who he wanted to buy the insurance from, so it was obvious to anyone who heard about it that he had something up his sleeve. Warren, by contrast, would make all of his stock purchases through a broker who was told to be absolutely secretive about who he was buying them for (so nobody knows when Buffett is buying a particular stock). Mike was also too willing to explain to people his reasoning (he wrote a long letter to investors explaining his reasoning, which you can find online), which led to other fund managers copying his idea once they were convinced. And his willingness to explain his ideas to his investors cost him b/c they got panicked and demanded their money back, which forced him to reduce the size of his bet and just gave him a lot of grief in general. Buffett refused to accept money from anyone who did not follow his terms (in which Buffett did not have to disclose what he was doing with their money); if Mike had done the same thing he might have been better off, although it may have been harder to get people to accept those terms.

******************
Chronology of Success
******************

His dad was a stock market investor who went broke after the depression (when Warren was very young) and that seems to have instilled in Warren a love of investing and an overwhelming desire to be rich. He grew up hanging around his dad and his dad's company, and was obsessed with and really good with numbers from a young age (memorizing the populations of the capitals of every state).

He got LOTS of business experience as a kid; the book lists lots of ventures Buffett started (more than in any other biography I've read). Ex: as a child he would play Monopoly "for what seemed forever" (3); at five he set up a gum stand and sold Chiclets, and later lemonade (in a location with more traffic) (4); he would crawl on the floor and hunt for discarded winning tickets at a local racetrack (4); he would carry golf clubs at a nearby country club (4); he would gather used-but-marketable golf balls and sell them (4); at six he would buy cans of soda and resell it door-to-door for a profit (10); at eleven he bought his first stocks, rode them through a dip, and then sold them at a profit later (12-13); he and a friend developed a tipping system for people who bet on horses, and would sell copies of their tips for a given race (13); at twelve he worked in his grandfather's grocery store (19); at thirteen he got a job delivering papers for the Washington Post, and then other newspapers as well (21-23); he saved every penny and at fourteen invested $1,200 in forty acres of Nebraska farmland (23). As a senior he bought a used pinball machine for $25 (~$250 in 2011 dollars), had his friend fix it up, and they put it in a nearby barber shop (the barber took 20%) (24-25). They got $14 the first day, and expanded by buying more machines from $25-75 and putting them in more locations until they were making $50 a week (~$500 in 2011 dollars). Warren "kept the books and typed a monthly financial statement", while his friend would repair the machines when they broke (which was frequently); they would pretend that they were just the hired hands for a larger operation in order to guard against the mob or intimidation from the barbers.

He went to Wharton for undergrad but transferred back to Nebraska b/c he wasn't getting anything from it (he'd already read "100 books" and complained about knowing more than the professors).

After undergrad he applied to business schools; he was rejected by Harvard but accepted by Columbia, where it just-so-happens Ben Graham was teaching. Buffett ended up becoming the best student Graham had ever had (Buffett got the only A+ Graham ever gave in 20+ years of teaching).

After b-school he worked on Wall Street for 3 years before going to work for Graham for a couple of years.

After working for Graham he moved back to Nebraska and started raising money from all the rich people he could find (friends, friends of friends) to manage. His only fee was 25% of all returns ABOVE the 6% that the money would have earned in a bank account. So if you gave him $100 and in a year he had $126 for you, he would say you got the $106 and then he takes 25% of the $20 on top of that, or $5.

*************
Stuff Mentioned
*************

- 16 - One Thousand Ways to Make $1,000 was apparently Warren's favorite book as a kid. Amazingly enough it's available for purchase on Amazon, probably because of its connection to Warren.
- 88-89 - he read and agreed with Bertrand Russell while in his 30s

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