The David Rubenstein Show: Warren Buffett on His Early Career in Finance

to be able to buy a house, a kind of vacation home. I'm Bainbridge Island, near Seattle, and I said, Meg, anyone who calls and asks me if she has enough money, she has enough money, so I'm going to call that don. He didn't have it so he bought the house so Kate Graham invited some people to the house and she knew the elderly cases so she called Mary Gates and then Mary went to work with Bill to try to get him came to bill. so I'm not going there to be a stockbroker, something like that, yeah, and Mary wasn't very firm and she said you're coming and he said I'm not going.

They started negotiating hours and she said four hours and he said. an hour and this was back and forth and he came down and when we met we talked for about 11 hours straight without Peter, yes that was the beginning of the relationship, yes we got along well but you never bought any of his shares or just I never bought one. hundred shares just to keep track of what this young man was doing well and now he's on your board of directors, that's right, that's right, so the relationship has become very close and you also get involved with him in a lot of philanthropic things, oh yes, yes, we have.

It was a lot of fun talking, so let me ask you about the philanthropic things you've done with Bill and Melinda, that idea of ​​donating your money to someone else's foundation. Well, I had originally planned it for my first wife. We would take care of the disposition of everything we had and we came to that 120 conclusion and started something called the Buffett Foundation over 50 years ago, but it didn't make much money during those intervening years because I felt like it was compounded at a rate that I could give away thousands of millions per set of millions if I waited a while while she died in 2004 for that plan to go away and then I was faced with the question of how to give this money away. in a way that it reaches the people I love without me doing all the work, so one day you called Bill or Melinda and said: guess what I'm going to give you most of my fortune, what was their reaction?

It was so good. So elegant, actually, you know, I've been asked that I don't remember cl

early

, but at some point I didn't call them, it was done over the phone. I think good night and you didn't ask them. aptly named the Bill and Melinda Gates Foundation and Warren Buffett, you don't know what your name is, no, I didn't think that would do any good, so now you're on the board of the Bill Melinda Gates Foundation, that's true, but they run it . I'm going to give you actions, what would you say are some of the highlights? The agreements you are most proud of.

Let's take one he did recently. The biggest deal I ever did was Precision Castparts, about 37 billion dollars a day, yeah, it was 32 to 33 billion in cash and then we took on about 4 billion at that time, okay, so, how much you spend? 37 billion you spent a year studying the company no, how much time did you spend with the CEO? I met I think on July 1 of last year I was visiting certain shareholders and one of the colleagues in our office had had a position in the stock market on a few occasions, so it was an accident that I knew him if I had been playing golf or Something like that would never have happened, but I went in and I liked it.

I listened to him and talked for 30 minutes and then I told the guy in our office to call him tomorrow and tell him if he would like to receive a cash offer from Berkshire Hathaway, we would provide one and if he didn't want to receive one, you know, forget that we once called, that's how it was. Hire any health analysis from investment bankers. to help analyze the economics sometimes we are involved in the deal and we are perfectly willing to pay that commission once you told me a story about how an investment banker was hired by someone you were going to try to buy out, what happened So I said that we would pay $35 a share for an American energy company and they hired an investment banker and the investment guru came out and spent about a week and they stayed if they wanted to send a big bill.

In the end they told me: well, you have to increase the price so that we look good. I said I don't care too much if you look good, so they walked around the mall for about a week and finally called and ordered. He begged and said, you know, can't you raise your price a little so that we can send an invoice and receive proper payment for our services not rendered? So I said, okay, you can tell them we'll pay thirty-five dollars and five cents and you can tell you got every penny out of me, so that's what we paid. 35 or five.

I knew that you usually make a price and don't party and sometimes make hostile deals. No, no, I even say that Berkshire Hathaway was originally a hostile deal. but no, we're just not interested, it's not that hostile deals aren't necessarily bad, they are managers who should be replaced, but now people have to call you every day and tell you I have a deal for you, it's perfect and with what how frequently these deals are made. it never goes well, they don't call every day and we've made our Arkwright criteria pretty clear so there are relatively few who call and when someone calls I can usually tell within two or three minutes whether the deal is likely to happen or not. , there are only about half a dozen fillers and either you pass the filters or you don't, I was once told that you received a letter from someone in Israel that correctly said: I would like you to see my company now, what's the chance?

Someone from Israel sends you a company prospectus through the transom and you say you're going to buy it and you bought it, yes, we bought it, we gave, we bought eighty percent at that time for four billion and then he bought the 20 % remaining, but before you bought it, did you go to Israel to see the company? No, I didn't go to Israel. I hope you are there and you were absolutely satisfied with what you bought and you also bought one of the largest railways in the world, that is correct and it worked well, we just forgot, what was the theory behind buying a railway? because people thought they were kind of fossil like businesses, the railroad business had a bad century, they are like the Chicago company, they all have a Bad Century now, but finally the railroad industry was quite rationalized and modernized and the railroad business It's a good business, it's not a great business, but it is a good business and in the fall of 2009 we already owned a good amount. of the BNSF permit in North Santa Fe and the price looked like we could do it at a reasonable price, so that was on a Thursday and on Friday I said we would pay $100 a share if the directors were interested and then he consulted with the directors about The weekend and the following Sunday we signed a contract.

Someone from the White House called me and said, Would you mind putting a tax on your name? And I told him no, if all the diseases have taken over my question. I will take a taxi. David Rubenstein

show

. His view remains the best place in the world to invest in the United States. Well, it certainly has to be the best. He is the best I know and that is why he has been wonderful. I mean, no one has shorted the United States since 1776 and I've enjoyed it. that what happened subsequently, but we had about 2% or less slower growth in the last two years, do you think it is possible to grow three, four, five percent again in this economy; there will be a few years, but 2% growth yes Having a population growth of just under 1% means that in one generation, 25 years, call it, we will add perhaps 18 or 19 thousand dollars of GDP per capita for a family of four seventy-one.

Five thousand, sigh, so we're just getting started at that one percent, you know? My life has been a product of compound interest, it may be better to do it at higher rates, but if you already have a prosperous economy and we have the most prosperous economy the world has ever seen and you keep compounding it over time, people will live a long time. better in twenty years than they are now you have said that your secretary pays a higher tax rate than you do when counting payroll taxes yes that is true so you are in favor of changing that a few years ago someone from the White House, not the president I called and said they had read my views on taxes and they said, Would you mind having a tax named after you?

And I said, well, if all the diseases have been eliminated, why shouldn't I charge such and such a tax? I've touched on this, but I really believe that anyone who makes millions of dollars a year should have a combined payroll and income tax of at least 30 percent and in my office everyone in the office has that except me, right? how is it done? I think you became a Democrat when your dad was a big Republican and you live in a very conservative state. How do you think that evolved civil rights more than anything else? I mean, I didn't think about that when I was, you know, twelve.

I was or fourteen and I went to Atlas Steel and it was a black school just a few hundred yards away and I never realized how different life was for other people and then as I got to see more of the world, I just decided there were a lot of things that were unfair and the Democrats seem to be doing a little more about it. At Berkshire Hathaway, today you have an annual meeting that draws approximately 40,000 people. When you had your first annual meeting, how many people

show

ed up? In that pit we had 12, but you had to count my Aunt Katie and my Uncle Fred and a couple of managers.

We usually had about two outsiders and when you started at Berkshire Hathaway, did you ever in your wildest imagination think that you could build a company that would become one of the largest in the world was it in your plan, sir, no, I have always put one foot in front of the other, what would you like to have as a legacy? How do you think I would like to be the oldest man who ever lived, but no, I like teaching, so yes I have been a decent teacher and I have a lot of college students who come out every year and today there is something on your wish list that you would like to do and what you haven't done, I would have done it, you know, if there is something I would like to do, go, dad, money has no use, time is a use for me, but it is money in terms of earning.

Traveling is just making more houses or having a boat or something, it has no use to me, so suddenly there are a lot of you, other people, which is the reason for the Giving Pledge, what motivates you to continue running a company when most people your age. They're playing shuffleboard or relaxing or doing something, yes, they spend the entire week planning their haircut. I usually get to do what I love with the people I love every day. I mean, there is nothing better than that and that is why the greatest pleasure is your life, besides doing interviews like this, it is watching new companies that make investments, giving away money, what writing gives you the most pleasure, your grandchildren, everything is everything the above, I mean, but the truth is that I consider Berkshire Hathaway to be kind of like someone likes a painter to consider a painting, the difference is that the campus is unlimited, so there is no finish line in Berkshire and it's a game where you can continue to play whatever advice you give to someone who is a young investor who would like to emulate you what you would recommend they do to build something close to what you've done.

I think you should look for the job you would like to have if you didn't need a job. I mean, you are, you are. We'll probably only live once Shirley MacLaine may differ without our few people, but you don't want to sleepwalk through life and really whether you do X or 120 percent of you marry the right person and also find something you would do if you didn't need the money and I've had that job for 50 years or more and I got lucky and then I figured out

early

on what turned me on that way, but don't settle for something If possible, don't worry about making the most money this week or next month.

I mean, when I went there, I offered to work for Ben Graham. I said I'll work. for nothing and I met him, you know, I mean, just the idea was turning you on, so look, look, look for the job that caught fire, find a passion, David Rubin stuns you. I'm Mark Halperin and I'm John Heilemann with all due respect. For Team Trump, it looks like the Democrats think they have this in the bag on a day when the New York Times offers exciting details about a new Tribe Called Quest album, boo boo, tonight we're playing a theme song on the show that includes that of Donald Trump. change of tone and the Clinton campaign's blue state jam session, but first the polls accelerate, we can barely keep up with the avalanche of surveys of key state polls by Quinnipiac CNN and other organizations that flooded our inboxes today less than a week before Eid.

Florida remains a very close race in one poll Clinton is up by one point among likely voters and in the other she is up by two points in Ohio Donald Trump is ahead by five pointspercentages in North Carolina Clinton leads by three and in Pennsylvania Clinton leads by five points in one survey and four in another in Wisconsin, where Donald Trump campaigned yesterday and Mark Halperin was Clinton, he still has a six-point lead, while his lead in Colorado it has been reduced to three points, while in Virginia it has a five percent lead.