Each year Warren writes his managers and asks them to decline all speech requests without checking with him. Mr. Buffett does not accept speaking requests from me, either.
Warren Buffett does not have an email address. Please note that since he receives 250 - 300 letters per day, unsolicited investment proposals go unanswered. Correspondence regarding charitable gift requests also receive NO response and are best sent to the Bill and Melinda Gates Foundation. Any communication to the Bill and Melinda Gates Foundation mentioning a referral from me is not read.
Warren likes to tease that he plans to retire 5 years after his death and then conduct regular séances with his board of directors. Actually he is born to do what he is doing, does it for the smallest salary [$100,000] of any of the Fortune 500 CEOs, without any stock options or without ever selling a single share of his stock, and has the type of job [allocating capital and finding, selecting and keeping talented managers] that is actually done better with a few gray hairs.
I have written a separate chapter in The Warren Buffett CEO titled Berkshire Post Buffett detailing what selection criteria the board of directors may consider when choosing Warren's successor(s). A possible but not likely candidate is mentioned, along with the criteria for selection.
Best to check his website for all things related to Warren Buffett. Start by reading his annual letters to shareholders and make a note to attend the mother of all annual meetings, the first Saturday in May in the heartland of Capitalism, Omaha, Nebraska.
Warren's job will be divided into three. One person, most likely a Buffett family member and his son Howard, will be named chairman of the board to maintain the unique family style corporate culture. Another, most likely someone like Lou Simpson of GEICO, will be named CEO in charge of capital operations. And another will be named CEO of operations. This CEO business model is already successfully in place at GEICO Auto Insurance.
Each is paid a cash salary and additional compensation based on the profits of their individual business. If the business manager owned the business before selling to Berkshire, he or she may continue to own as much as 20 percent of the business and enjoy an annual earnings distribution. Stock options are never used as management compensation and the measurement and focus is on what is going on inside the business, particularly earnings and changes in book value.
Q. I am perplexed in Buffett's investment in Level 3 because it runs contrary to everything he has ever written and said and there is not predictability to Level 3 in any way. Even if you ask LVLT CEO James Crowe he will say that he does not know what his business will look like one year out in the future and thus there is no visibility. Why would Warren make an investment in an enterprise where technology changes the business everyday? I know he likes to bet on CEOs (thanks to your book) but this business is really tough. If he were to make a technology investment it would be Microsoft, which certainly has much more visibility. What are your thoughts?
A. My take on Level 3 is Warren bought a convertible bond paying an attractive rate of interest that has already doubled in value. This is the same way he got into many other investments, e.g. Gillette, US Air. The Buffett CEO in this case is Walter Scott. Without him I doubt he would have done the deal. If you remember Walter brought him the MidAmerican deal which is now one the largest and most profitable divisions of Berkshire. MidAmerican, in two short years, has revenue of $6 billion and earnings of $300 million. It is already larger than the flight services division. Energy, at the right price, may become the second largest component of BRK. He bought LVLT at the maximum point of pessimism and at $100 million it only represents the equivalent of one week's cash flow for BRK. Remember this is a high yield bond not an equity investment, although at Warren's option it may become one. What is amazing is that for about the same amount of money he bought the largest furniture store chain in Texas and no one ever talks about that purchase. LVLT fascinates most people because of the Walter Scott connection, technology relationship, the apparent contradiction to Warren’s investment principles and the fact that so many Omaha and Berkshire shareholders have lost 90 cents of every dollar invested in this company.
No, Berkshire Hathaway is a conglomerate made up of over 100 wholly owned subsidiaries as well as a handful of partly owned common stocks. It has significant property and casualty insurance businesses, cash and fixed income investments.
No. Berkshire Hathaway is listed on the New York Stock Exchange under symbol brka and brkb. The B shares trade and are worth 1/1500th the economic value of the A shares. As an example, if the A shares trade for $150,000 then the B shares will trade for $100. You must purchase and sell your shares through a NYSE licensed online, discount or full service stockbroker.
Warren Buffett is in the process of donating the bulk of his estate to the Bill and Melinda Gates Foundation. The majority of his Berkshire stock (5 percent of his wealth each year over the next 20 years) is being transferred to the Gates Foundation. The Susan Thompson Buffett Foundation sponsors an outstanding Omaha public teacher (K - 12) awards each year as well as a scholarship program for Nebraska college students. Each of Warren's three children also have their own foundations. Eldest daughter Susan A. Buffett's charity is called The Sherwood Foundation and is focused on children and family welfare in low income neighborhoods in Omaha. Howard G. Buffett Foundation is targeting global environmental and conservation needs. Peter Buffett with his NoVo Foundation is currently evaluating how they will distribute their funds to change, alter and invent. Warren's sister Doris also has her own Sunshine Lady Foundation which focuses on solving domestic violence. Read How Buffett's Giveaway Will Work.
From 1956 to 1969 Warren Buffett managed the Buffett partnership which gave him 25% of the profits after a 6% guaranteed return to his partners. With that arrangement Warren was able to generate $25 million in net worth, most of which was invested in Berkshire Hathaway. However Mr. Buffett kept 1% of his money outside of Berkshire. That portfolio estimated at $400 million generates over $40 million per year in annual income. Which is how he and his family affords to fly as many as 300 hours per year on wholly owned subsidiary NetJets planes. As a side note, Warren personally pays for the use of the jet.
A. Sorry I do not handle any correspondence for Mr. Buffett. Do not write or request from Warren Buffett “any proposal to speak, make contributions, intercede with the Gates Foundation, etc.”, or any other business transactions under my name. Mr. Buffett does not accept any correspondence, calls, emails, text messages or any other forms of communication under the guise of a referral from me. Please do not feel “It can’t hurt to ask.” Your request will not be read.
They are listed in every BH annual report immediately following Warren Buffett's Annual Letter to Shareholders:
BERKSHIRE HATHAWAY INC. ACQUISITION CRITERIA. We are eager to hear from principals or their representatives about businesses that meet all of the following criteria: (1) Large purchases (at least $75 million of pre-tax earnings unless the business will fit into one of our existing units), (2) Demonstrated consistent earning power (future projections are of no interest to us, nor are “turnaround” situations), (3) Businesses earning good returns on equity while employing little or no debt, (4) Management in place (we can’t supply it), (5) Simple businesses (if there’s lots of technology, we won’t understand it), (6) An offering price (we don’t want to waste our time or that of the seller by talking, even preliminarily, about a transaction when price is unknown).
The larger the company, the greater will be our interest: We would like to make an acquisition in the $5-20 billion range.
We are not interested, however, in receiving suggestions about purchases we might make in the general stock market.
We will not engage in unfriendly takeovers. We can promise complete confidentiality and a very fast answer – customarily within five minutes – as to whether we’re interested. We prefer to buy for cash, but will consider issuing stock when we receive as much in intrinsic business value as we give.
We don’t participate in auctions.
Charlie and I frequently get approached about acquisitions that don’t come close to meeting our tests: We’ve found that if you advertise an interest in buying collies, a lot of people will call hoping to sell you their cocker spaniels. A line from a country song expresses our feeling about new ventures, turnarounds, or auction-like sales: “When the phone don’t ring, you’ll know it’s me.”
To my knowledge Mr. Buffett does not make individual donations. Instead he makes annual contributions to five designated foundations (Bill and Melinda Gates, his late wife and his three children) and then each of them makes grants according to their stated mission. He does not read requests that use my name as a referral.
Yes Mr. Buffett did say the above quote on solving the deficit.[Video]
— He did NOT say everything else contained in the chain email. Nor would he ask anyone to forward this email. Its one of the reasons Mr. Buffett does video interviews so that he cannot be misquoted. One tip off that the email wasn't from him is 'Buffet' is mispelled.
Mr. Buffett also supports Simpson-Bowles, which is a bi-partisan proposal to raise revenue and lower spending.[Video resource]
A. The best way is to enroll into a MBA program. Mr. Buffett welcomes to his office in Omaha, Nebraska, graduate business students from 45 universities six times throughout the year. He answers questions for 90 minutes and then treats the visiting students to lunch. Tours are arranged to visit local wholly owned businesses including Nebraska Furniture Mart and Borsheims Jewelry. Each college is permitted to send 20 students, however 30 percent or more must be women. Best to contact his office for more details. Another way to see Mr. Buffett, although it is unlikely that you will meet him, is to attend his annual meeting, usually held on the first Saturday in May. More details can be found at www.berkshirehathaway.com
A. With 24 people at the home office in Omaha, job opportunities and openings are not likely. Suggest applying to one of the many subsidiaries of Berkshire Hathaway: http://berkshirehathaway.com/subs/sublinks.html Additionally, Mr. Buffett does not accept job referrals or requests that use my name.
A. The best way to learn more about the investment strategies of Warren Buffett is to read The Intelligent Investor, a book written by his college professor, Benjamin Graham. Also reading Mr. Buffett’s annual letter to shareholders found on his company’s website berkshirehathaway.com will help you understand his investment and management philosophies. Sorry I do not provide private introductions to Mr. Buffett. Good luck with your investments and business career.
A. Best to write a letter to Mr. Warren Buffett (remember it is spelled with two t's) and request to be included in one of his monthly college Q & A sessions. Recommend using your University letterhead. Mr. Buffett’s office mailing address is found here http://berkshirehathaway.com/
Include your email address for a response. He requires a maximum of 20 graduate students per university and requires 1/3 or 7 female students to be included. If invited, your group will be permitted 2 questions and will have the opportunity to tour a few of his Omaha based businesses.
Here are several google searches for 'College Visit with Buffett': https://www.google.com/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=college%20visit%20with%20Buffett
Here is an example of how one college (Arizona) handled the invitation which included using a local Omaha travel company: http://ugrad.eller.arizona.edu/events/buffett/
Good luck with your request.
A. You will find Berkshire’s acquisition criteria in every annual report immediately following Warren Buffett’s letters to his shareholders: http://berkshirehathaway.com/2013ar/2013ar.pdf"BERKSHIRE HATHAWAY INC. ACQUISITION CRITERIA
We are eager to hear from principals or their representatives about businesses that meet all of the following criteria:
(1) Large purchases (at least $75 million of pre-tax earnings unless the business will fit into one of our existing units), (2) Demonstrated consistent earning power (future projections are of no interest to us, nor are “turnaround” situations), (3) Businesses earning good returns on equity while employing little or no debt, (4) Management in place (we can’t supply it), (5) Simple businesses (if there’s lots of technology, we won’t understand it), (6) An offering price (we don’t want to waste our time or that of the seller by talking, even preliminarily, about a transaction when price is unknown).
The larger the company, the greater will be our interest: We would like to make an acquisition in the $5-20 billion range. We are not interested, however, in receiving suggestions about purchases we might make in the general stock market.
We will not engage in unfriendly takeovers. We can promise complete confidentiality and a very fast answer – customarily within five minutes – as to whether we’re interested. We prefer to buy for cash, but will consider issuing stock when we receive as much in intrinsic business value as we give. We don’t participate in auctions.
Charlie and I frequently get approached about acquisitions that don’t come close to meeting our tests: We’ve found that if you advertise an interest in buying collies, a lot of people will call hoping to sell you their cocker spaniels. A line from a country song expresses our feeling about new ventures, turnarounds, or auction-like sales: 'When the phone don’t ring, you’ll know it’s me.' "
A. Sorry I do not sponsor or invest in new or existing business ideas, nor do I donate or respond to charitable requests.
A. Suggest visiting your local brokerage office (like Fidelity, Schwab, TD Ameritrade). They are licensed and trained to help beneficiaries sell or transfer stock.
Alternatively you can call Berkshire stock transfer agent: Wells Fargo Bank, N.A., P. O. Box 64854, St. Paul, MN 55164-0854 serves as Transfer Agent and Registrar for the Company’s common stock. Correspondence may be directed to Wells Fargo at the address indicated or at wellsfargo.com/shareownerservices. Telephone inquiries should be directed to the Shareowner Relations Department at 1-877-602-7411 between 7:00 A.M. and 7:00 P.M. Central Time. Certificates for re-issue or transfer should be directed to the Transfer Department at the address indicated.
A. You'll enjoy Omaha during the Berkshire weekend, usually the first Saturday in May. Best place to find Warren Buffett is during the official Berkshire related events, beginning Friday night at Borsheims, Saturday at the annual meeting and Nebraska Furniture Mart's BBQ dinner and Sunday playing bridge (often with Bill Gates) at Borsheims. Remember to bring your meeting credentials and enjoy discounts from assorted Berkshire subsidiaries. Here's a link to a recent shareholders guide that will likely be very similar agenda each year http://berkshirehathaway.com/meet01/VisGuide2014.pdf
A. I asked myself, “Who is the best at investing and is he or she available to invest for me?” I quickly discovered that it was Warren Buffett. I read Roger Lowenstein’s biography, Buffett: The Making of An American Capitalist, and it made a lot of sense. Buffett says value investing is a quick inoculation — you either get it in the first 10 minutes or you don’t. So I bought shares and read the Berkshire Hathaway Owner’s Manual. In 1996, I attended my first annual meeting and haven’t missed one since. What I heard was someone speaking the truth about Wall Street, investing, finance, the stockmarket, life, philanthropy, inheritance, wealth, success. Buffett says, “Wall Street will sell you anything that you’re willing to buy. Wall Street is a legal pickpocket of the average investor.” Speaking the truth in a commonsense folksy Midwestern way really resonated with me and thousands more, which is why attendance has grown every year since. I first met Warren at a local Omaha Dairy Queen outlet after he bought it in 1998. At the end of that year, I decided as a challenge to myself to log on to The Motley Fool (fool.com) where they have a discussion board dedicated to everything Berkshire. Under the pseudonym “simple-investor”, I stated that I could come up with 101 reasons to own Berkshire. Each day I logged on and posted a new reason. After 101 days, I completed my challenge. Those posts became my first book, 101 Reasons to Own the World’s Greatest Investment: Warren Buffett’s Berkshire Hathaway, which launched my career as a Buffett follower.
A. That it is possible to become wealthy without compromising your principles. His example of living in Middle America, far away from Wall Street and Silicon Valley, and investing for the long term in sensible, durable goods and services. And you can do this from wherever in the world you sit. His investment philosophy is simple — first, figure out how to value a business and, second, how to understand stock prices. Buffett’s method is value investing — figure out what an investment is worth, discount it back to today and attempt to buy it cheaper. You should also not invest in stocks if you don’t know how to think about market prices — to buy when everyone else is selling and sell when everyone else is buying. Or as Warren says, “Be greedy when everyone else is fearful and be fearful when everyone else is greedy.”
A. The primary reason over 40,000 people attend from all over the world is to learn from a man with credibility speaking the truth. Warren has created his wealth and many of his shareholders’ wealth by investing in small pieces of other people’s businesses, first through the stockmarket and then buying the business in its entirety. Warren is educating his shareholders on how they can do the same. Warren along with his partner, Charlie Munger, answers unedited questions for six hours. Their recall of facts, figures and details is mind-blowing.
A. He is still investing the same way for nearly 70 years. As a teenager, Warren had an epiphany when he read Benjamin Graham’s The Intelligent Investor. He has often said it is the only book an investor needs to read. The three lessons he took away are these: (1) Remember that stocks represent pieces of the business. Stocks are not symbols in your newspaper or electronic blips on your computer screen. When investors begin to think like an owner of a business, they forget about trading in and out of the market and naturally become long-term owners. (2) Graham’s concept of Mr Market, an investor’s manic-depressed virtual partner. When Mr Market is manic, he wants twice as much as you think the business is worth — a perfect time to sell your shares. And when he’s depressed, he wants half as much as what you think the business is worth — a perfect time to buy. Most investors make the mistake of letting Mr Market be their master, feeling bad when the market is down and jubilant when the market is rising. Warren says, “Mr Market should be your servant instead of your master.” (3) The important concept of margin of safety — only buy things that are trading below their value. Buffett has never deviated from these three rules. He is about buying wonderful businesses run by top-notch managers at a fair price instead of a mediocre business at a wonderful price.
A. During the last market crash, Buffett really showed his genius. He lent money to many large corporations, including Goldman Sachs and Bank of America. Berkshire received above-market interest payments on the loans and in addition got stock warrants, giving it the right to buy stock at deeply discounted current prices. More recently Berkshire bought Heinz Ketchup along with a Brazilian partner and merged it with Kraft Foods. In 2010, many people questioned Buffett’s purchase of one of the largest railroads in the US, Burlington Northern Santa Fe, now his most profitable subsidiary. Along with his investments in electrical generation plants and distribution across the US and in Britain, he has transformed his holding company from an insurance company to a conglomerate with the majority of earnings coming from diverse industries. Berkshire Hathaway is now becoming a household name, owning the second-largest real estate brokerage company in the US.
A. Berkshire Hathaway is like a starfish. You will be able to cut out the head and the parts will regenerate themselves. After Buffett “retires”, his roles as chairman, chief executive and chief investment officer will be split into three parts. Berkshire’s non-executive chairman is most likely to be his oldest son, Howard, whose sole job is to protect the unique culture of Berkshire. The CEO in charge of operations is most likely someone already managing a subsidiary. These include Ajit Jain of Berkshire Hathsay Reinsurance, Matt Rose of Burlington Northern railroad, and Greg Abel, MidAmerican Energy Holdings. The CEO of capital allocation, responsible for reinvesting $US2 billion in monthly cashflow to headquarters, is likely to be divided between Ted Weschler and Todd Combs.
A. Warren Buffett is a value investor (buying stocks/businesses below their intrinsic value) and a values manager (only doing business with high character managers). Buffett is an investor who focuses on what he can take out of an investment over its useful life discounted back to today and always attempts to buy it cheaper. Buffett’s conglomerate (America’s 2nd largest by revenue) has over 100 wholly owned subsidiaries with 370,000 employees but only 25 people at headquarters. His business philosophy is to leave managers alone without meetings, budgets, management contracts, or any interference from Buffett or HQ.
A. His annual shareholder letter is the most widely read letter with over 1 million downloads. His annual meeting (called Woodstock for Capitalists) attracts 40,000 shareholders, guests and media from all over the world. Another 12 million watch the 7 hour meeting online. Many investment managers and corporate chiefs admire his business acumen and travel to his hometown to seek his wisdom. Warren Buffett is without peer. When Buffett talks, people listen.
A. His ability to access insurance float (now more than $100 billion) to reinvest in wholly owned and partly owned through the stock market. The Berkshire culture to never sell a subsidiary, to centralize capital allocation, allow subsidiaries to use their own unique business systems with zero interference from HQ, fair management compensation plans, treating shareholders like partners, to act quickly on ever deal, to pass up back deals, to have the Rock of Gibraltar balance sheet with available cash to invest when the market crashes, to pay cash for quality businesses instead of issuing stock and to attract a unique set of business owners who would only sell to Berkshire.
A. Having built vast wealth for his family and himself along with over a million shareholders by simply investing in other people’s businesses has made him a financial and business rock star to the world. By advising Presidents and Congressmen to do the right thing and tax the 400 richest Americans the same as the middle class has endeared him to millions. Simply by encouraging 170 other billionaires around the globe to give back at least half of their fortunes have become a remarkable legacy.
A. Upon his retirement (which he defines as 5 years after his death) Mr. Buffett’s job will be split into three parts ; Non-Executive Chairman of the Board (most likely his son Howard), CEO in charge of operations (Vice Chair Charlie Munger has suggested Ajit Jain or Greg Abel), and CIO (Ted Weschler and Todd Combs).
A. That’s like asking who is the younger or next Nelson Mandela, Abraham Lincoln, or Mahatma Gandhi. I’ve spoken on 5 continents in over 20 countries and I have yet to find anyone close to Buffett’s genius and unique skill set. His ability to compute numbers without the aid of a computer or calculator, the skill to measure up a person’s character from thousands of miles away, and the rational approach to investment and business may never be found in one person again. Like all great athletes, Buffett makes it look easy.
A. Every investment scheme seems to seek the approval of the world’s greatest investor. Investing in cyber currency is diametrically opposed to Warren Buffett’s investment principles.
In his 2011 letter to shareholders, Buffett wrote about three investment methods available to all investors. Subtiled The Basic Choices for Investors and the One We Strongly Prefer (http://berkshirehathaway.com/letters/2011ltr.pdf) Warren also summarized his comments on investing in productive (good) versus non-productive (bad) versus currency based (ugly) investing in Fortune Magazine: http://fortune.com/2012/02/09/warren-buffett-why-stocks-beat-gold-and-bonds/ A few years ago at his shareholders’ meeting he was asked about Bitcoin and he said he is sticking to USA and government backed currency.
With my limited understanding of cyber currency, it seems as though it will always have a public relations problem as the preferred ransom payment for those operating outside the law. Haven't found one organization or person yet, who likes the ransomware cyber crooks demands, always with difficult to trace cyber currency payoffs. With the inability to control, monitor, legislate and print, global governments will always likely oppose cyber currency as a way of evading taxes and their legal system. But the biggest risk in my opinion is the ease of cyber currency manipulation of anyone with access to $200 - 300 million cash. Seems too easy to pump and dump schemes and bad guys operating without any government protections or recourse. There are many paths to financial success including non-productive and currency based investing. Cyber currency is just outside Warren Buffett's circle of competence.
A. Warren Buffett suggests an easy investment option for most people and one that he advises his estate for the benefit of his wife after his death. A simple low cost index fund should earn you on average 10 percent a year and double every 7.2 years as long as you hold it for a decade or more. He advises Vanguard although Fidelity, Schwab and others offer very competitive low cost index funds:
Here's the quote, from page 20 of his 2014 annual letter to Berkshire shareholders. After all of his Berkshire shares are distributed to charity, take the cash, Buffett says, and just buy index funds: My advice to the trustee couldn't be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (I suggest Vanguard's.) I believe the trust's long-term results from this policy will be superior to those attained by most investors — whether pension funds, institutions or individuals — who employ high-fee managers.