Warren Buffett | Financial Future Of America's Youth & How To Stay Out Of Debt

testing 1 million two million three months running well I would like to talk to you about your

financial

future

and I hope those figures become applicable to all of you as we move forward and I would like to start by posing a problem for you and instead I'm just going to talk for a couple of minutes and we'll do Q&A because what we want to do is talk about what's on your mind, but I'd like you to think about this just for a second if as we're walking out of here today I said I'd like to buy 10% of your

future

.

financial

was going to write you a check today and from now on he was going to give me 10% of everything you earned.

How much would you like to charge? That's why I'll buy a tenth from you and it may take me a little while, so be careful what you write now, well, I think if you think about it for a while, you can contemplate it for a few minutes, you know? You'll get a check for me today and you can do whatever you want with the money, but starting today you'll have to give me 10% of what you make. I think it would be very foolish of you if any of you asked for less than, say, $50,000. Now it'll be a few years before you're making any money so I've got a few years of dead money in there but then I would start getting this royalty on you like you and for a long time so I really think if you thought about it most of you They would want a good amount more than that.

I think they would be right. Fortunately, I didn't make this deal with anyone when I started, so no one has a 10% royalty on me. but I think 50,000 would be the absolute minimum and if you think about that, that means that today you are worth five hundred thousand, because ten percent of you is worth fifty thousand in cash, today your potential is worth a minimum. one hundred percent of five hundred thousand dollars, that is the great financial asset you have. It is much more important what you do with that $500,000 asset you own today than whether you decide to buy stocks or bonds or put your money in a mutual fund or pick your own stocks or anything like that, the largest financial asset you have at your disposal.

Your favor is the value of your own earning power over the years, so that's really what you need to focus on if you're focusing on your financial future, that means you need to focus on yourself because if your ten percent It's worth fifty thousand or one hundred thousand or three hundred thousand, which would be five hundred thousand or one million or three million for all of you, whether it turns out to be one or the other depends largely on what you do in the next few years. All of you in this room have the brains to do extremely well in life.

Everyone has the energy to do extremely well in life. So the question is how to apply it? If you have a two hundred horsepower engine, you get two hundred horsepower, you get your full potential, or you get one hundred horsepower or fifty horsepower. Now there are two things that can stop you. Getting all the horsepower out of your engine again, whatever it is, maybe all of you have big enough engines and one of them is lack of education, but that probably wouldn't happen to many people in this room if they had a lack of education if you didn't have the opportunity to get a decent education in life it wouldn't make any difference what that potential was because you never unlock it but the second most important and equally important thing is habits. that you develop in terms of what you do with yourself when we hire people we look for three qualities we look for integrity we look for intelligence and we look for energy but if they don't have the first integrity the other two will kill you because if you are hiring someone without integrity you really wanted to be dumb and lazy , It is not like this?

I mean, you know the last thing you want for that person is for him to be smart and energetic, so smart and energetic just goes with integrity, but the good thing is that you know you make your own decision about it, you can't change your IQ. intellectual or how far you control a soccer ball or how high you can jump or the color of your hair very easily, but you can choose to have an integrity that matches anyone's. of another person and if you combine that with the intelligence that you have and the energy that you have you will obtain an extraordinary result and you would be very foolish with so much ten percent of yourself for 50,000, on the other hand if you do not combine it with that your potential in one part important will not be used and I will give you a simple little test to apply in terms of thinking about the type of habits that you want to develop because you can have any habit that you want to pay, you can be. be lazy, you can be fast, you can be, you can be late, you can be honest, you can take shortcuts.

I mean, you have all these options and those are decisions that you have to make, no one else is going to make them for you and I would suggest that you play this little game when they: think about the person you would most like to be in life, so maybe it's one of your contemporaries, maybe it's someone a little older, but pick the person you admire the most, the person you trade places with is if you could and then write down why you admire them, just put it on a piece of paper and then find out the person you would least like to trade places with and that you really dislike because you find them repulsive and let's look at the reasons why that person really dislikes you and put them on the other side of the paper and then look at that list and you will find that everything what's on the left side with what you admire and other people, the qualities that bring joy to life, you know? generosity all kinds of things, you will discover that they are things that you can do yourself, it is very simple, you have to put in the effort, but the habits that you form by doing it from the beginning will help you throughout life and, on the other hand, you will discover that the things that make people repulsive, selfishness, hatefulness, all these things, selfishness, are things that no one has to have, if you find them in yourself, you can get rid of them as long as you get rid of them early, so everything What I suggest is that you write a list of what you admire, what seems despicable to you, and decide that you know that those who are on the admired side are the ones you are going to acquire for yourself now.

If you do it when you are young, it will accompany you for the rest of your life. your life This doesn't work if you do it when you are 50 or 60 years old, then the habits will be too well formed, but if you do it early, the behavior becomes a habit, so if you do it within two or three years, if you go through In the same exercise you will discover that the person you admire the most is yourself, that can be a little dangerous in some circumstances, but it is not, it is not a bad thing, I mean, you want to be someone you like and you don't want to. being someone who is yours and who you don't like and forming those habits early that you basically can't miss.

Now I'll give you another little tip that's just a corollary to this and then we'll answer your questions and that. It is, as a general matter, a piece of specific financial advice. I would say you know, avoid credit cards, just forget about it. We are in several companies that issue credit cards. The American public loves credit cards, but if they start rolling over

debt

on credit. cards you are going to pay eighteen or twenty percent and you cannot progress in your financial life by going around borrowing money at eighteen or twenty percent you can make a lot of money lending it at eight or 18 or 20 percent Over time, you know if you can find someone It's good that he borrows from you, but you don't want to be on the side of the equation that is always behind in life.

You know, I was lucky to have saved about ten thousand dollars so far. When I got out of school, ten thousand dollars was really worth millions that I could have made later because after starting a family and everything, expenses increase, but those were my tools to work with, but it was only because I was ahead. the game, if you are behind the game for ten thousand dollars at some point and you pay eighteen or twenty percent interest, you will never win them, you will never get out of there, so the trick I have a partner who says it all.

I want to know where I'm going to die, so I'll never go there, you know? And that also applies to financial matters. You should find out beforehand where you don't want to be and avoid it. I get about a dozen letters a day from people who are having terrible problems and there are two reasons why they have terrible problems: one is that several of them have had health problems of some kind, I mean, they have really been hit by someone or someone in their family has been struck by some type of catastrophic illness and that is a terrible thing that happens to any family and when they come in they rack up bills that they can't pay and really only society can solve that in terms of protecting people. versus that is just bad luck, but the other is people who are racking up credit card

debt

and facing bankruptcy or have already been through bankruptcy once before and they all have a ton of money and they can't.

I can't even pay the interest let alone pay the principal and half of my letters come from people like that and that problem is avoidable, catastrophic illness is not, but credit card debt is something you bring yourself to itself and it's a much better way. It is much easier to

stay

out of trouble than it is to get out of financial trouble and I guarantee that if you use a large credit card you will probably be in trouble for the rest of your life in terms of your financial situation, on the other hand if you get ahead of yourself in the game, even if it is on a very modest scale, so the money comes from investment and if your people owe you money, shares or property, you will be very out of the game compared to paying it back. being to always pay your creditors every month so my advice to you is if you can't pay it don't buy it and put yourself in a position where you can pay anything and then we'll be happy for you to get bored.

Shyam's or the rest of the martinet furniture is ready now, let's have some questions. Do we have a microphone that people can access or travel around and I can't necessarily see very well because I'm working with a microphone? on each side, so just raise your hand and wait for us to come to you. Okay, we have someone in front, like a microphone. Okay, whatever's on your mind, ask. No, no, don't be shy. Yes. How would you advise people? who might not necessarily go into a career field where they would make a big base salary, like medicine or something, maybe performing arts or music, how would you advise us to keep up financially with the rest of the world?

Well, that's right. It is true that a market system does not pay as well in some activities as might seem appropriate for the importance of those activities. Society simply takes teaching, for example. I mean, teaching doesn't pay well. And what might be more important, I mean, me. I know you have to be as interested in who you are to your kids' teachers as you are in who makes your account or you know whatever or who's winning the world heavyweight title or that kind of thing, but you don't. It doesn't pay well and it is a fundamental choice if you are going to dedicate yourself to something that for many people would be a fundamental choice if you are going to dedicate yourself to something you love or something that you like.

Try to make a lot of money. I think it's usually worth going with what you love and I think it's very hard to find people when they get to my age who say they're done and love what they love. What they have done their whole life and their field was very worthwhile, but they are terribly sad that they made that decision because they didn't make much money. I don't think anyone has ever said to me that they wish they had gotten into something else that they were uncomfortable doing or didn't enjoy doing it didn't feel very productive but it made a lot of money so no I don't think you'll find that so I would go to work I would go to work on anything that turns you on, it may turn out to be more profitable than you think, but almost everyone here will make enough money unless they pick up some terrible habits along the way to do it reasonably well. and doing reasonably well in this country is actually quite good.

I mean, you don't need to have large amounts of money to enjoy yourself. I enjoyed it when I had my $10,000 and I live in the same house I lived in. back when I was doing it when I had that I bought it 41 years ago I liked the house so I liked the house now I mean, if you think about it, if you have a reasonable job, you'll be eating at McDonald's and I'll be eating at McDonald's, so let's go to boost food. I mean, you know, I open, in fact, I hope it's Dairy Queen and, um, and if you come to Dairy Queen, you'll see me and you can order anything. menu I can order and we can both afford it, you know, you will wear the same clothes as me.

I'll pay more for my suits, but as soon as I put them on, they look cheap, so they'll look pretty much the same and we'll both live in the same type of houses. I live in that house from 41 years ago and it is warm and winter and it is cool and summer and it is comfortable and you will live in a house. that's good, similar and then what difference does it make if you have 50 more rooms or you know that guest houses are all there is? You know it will probably only get you into trouble. I mean, you have to worry about the greenkeeper or something when you go through a Saw III I've been topeople's houses where the houses are worth Oh, probably two hundred times what my house is worth and I wouldn't be happier in those houses at all, in fact I'd be less happy.

I just have one more thing to worry about, you know, the dozens. of people around the place and people quitting and people stealing all kinds of stuff from you, to hell with that, even if we drive, we'll drive the same kind of car, thanks, you'll probably drive a better car. I drive our cars that are about eight years old. I don't know how much it's worth now, but it helps me move well. I mean, I'm very happy. We'll look carefully, which is the same television? You know, we will work on the same computer. Pretty much the only difference will be how we travel. long distances, you know, I will fly on a plane that is more comfortable than flying with Southwest Airlines or something that I have nothing against, but that is the big difference and other than that, I do what I love every day, I hope you know it.

I will do what you like to do every day and work with nice people. Not me, you don't work with nice people and there are 24 hours and that's where the hours go, so great wealth is a little bit different in a real sense than just having a decent income and trading a decent income and something that you love to do and something that you feel is worth doing for enormous wealth in which you exchange many of your principles would be a terrible mistake. Wouldn't you recognize your success more? from yourself or from the hope and teachings of others, well, I was, I was, I was very lucky in life, if you tell me who your heroes are, I will make a pretty good prediction about what you are going to do and I had the right heroes .

I was very lucky in life and my heroes never let me down and I started with my dad and then I had others in business, so I had great teachers, some formal teachers, some who were just informal teachers, teachers by instinct or example, and If I had, If I hadn't had those, you know, my life, I'm sure, would have been very different if I had been born somewhere else, but it was. I was born in 1930 and at that time one of the 50 worst in the world was in the United States. I went in with a fifty to one chance of not being born in the United States.

It would have been a disaster, you know, if I had been born in Afghanistan or Peru or somewhere, I mean, no. I won the lottery. was born, you know, born in this country, so, for you, I mean, the odds were probably 40 to 1 against you being born in this country and you were five times more likely to have been born in China, six times more than four or five times more likely to have been born in India or somewhere else where it wouldn't have been so easy to exploit the full potential of their talent, so we've all won the lottery in that sense and that's pure luck, I want say. and I was lucky to be born at this time.

I mean, capital allocation is something that works very well in this society now, but it doesn't work in other societies and it didn't work, you know, many years ago, my friend. Bill Gates says that if he had been born a few thousand years ago he would have been an animal's lunch. You know I can't run very fast and I can't climb trees and you know it just happens that those are talents that no one asked me for. climbing trees now, but there was a time when it might have been important, and by the way, Bill would have been some animals' breakfast.

I mean, he can't run that fast either, but in any case, you know we're lucky. I mean, imagine being poor a couple hundred years ago with exactly the same talents and how far they would have taken you, then you know the average person lives a lot better than the richest person lived a hundred and 150 years ago, so I'm lucky in that sense. I was born to fantastic parents. I was fortunate to have grown up in Omaha and had an excellent public school system. I started here in the first eight grades, which gave me a foundation that then, when I went off track a few times, helped me get ahead because I had a great elementary education right here in Omaha in Rose Hill and one of the reasons why the ones I had is a little unfortunate, but I had that great upbringing partly because women were being hugely discriminated against and therefore a woman at that time.

I could be a teacher, I could be a secretary, I could be a nurse, you know, and that was it, so he had half the talent pool in the United States limited to a few jobs, so there was a lot of talent in those activities like nursing or teaching because that talent among men was extended in all acts and in all forms of work activity that there was, but with women it was concentrated in a few areas and that benefit is a little sad because it did not benefit those teachers, but I was very lucky and I've really been like that my whole life and what I do is what I do is important, you know what makes a good teacher or a good nurse or something like that, you know, I think it's quite questionable, it's worth it.

I do enormously well in a market economy like that of the United States and, but that is an accident, narrative is making an innate ability of mine. My name is Marina Ted and I attend Omaha Central High School, for you, sir. Buffett's technology has been a big factor in stimulating the global economy. What are his predictions for the future of the technology industry and what will be his future role in the global economy and in the United States economy? Yeah, well, there's no doubt he's turning the world upside down. It's done, it's done, it's kind of done, but you know it's just getting started, but it's moving very quickly.

I met Gates on July 15, 1991, who was there for a 4th of July celebration with a friend and who subsequently died in a green field with the Washington Post and she took us to visit the Gates family and he tried to educate me about high technology and had had better luck with chimpanzees. I mean, I was really a disaster, but he's a good teacher, but one thing that he told me was that at that moment he said: you know you have this model in your head of the world and your model has the time and the distance as very limiting factors and said they are no longer limiting factors, he said you know the cost. of talking to someone around the world or getting your message in front of someone or posting it, it's going to be zero and they're so close to zero that it doesn't make any difference, you know, that was revolutionary, but it's already happening in a very, very way. big and it's exactly what eight years later and it's exploding, high-tech information technology, whatever you want to call it, is changing the world and it's going to change it in a very, very big way, it will change I mean, that's one of the things I think about in the companies we buy.

Yesterday we announced the purchase of a furniture retailer in Boston in the Boston area and you know, I think what effect this new world has in terms of the Internet. In this retail, I mean, you have to think about questions like that, the changes will be huge. Yesterday I will play bridge with people from all over the country, but I played it with people from all over the world. I just sit in front of my computer and I have some popcorn there and I'm in khakis and a sweater and I can have a game of bridge in 30 seconds with people from all over the world and for free, basically you know it's very different than trying to organize a game with four people in Omaha, you know, one day when one guy wants to play golf and another wants to watch baseball.

I mean, that changes things enormously. We are very lucky. I mean, it's to the extent that America leads the world. In this area I want to say that we have an advantage, it is difficult to think who is in second place and about 15 years ago this country had an inferiority complex that would be difficult for you to remember because you were not old enough to be there then, but at the beginning In the 80s we were wondering if the Germans and the Japanese were going to own everything and if they were going to make all the steel and if they were going to make all the cars and everything else and the televisions and we were going to turn around. hamburgers, that was the standard line and imagine in a short period like 15 years how that has changed in a major way that has changed because of this information revolution that we like I said I don't know who I don't know who you would name it as second place in the world, but here is the most important industry in the world and the United States has this incredible position and we are moving all the time in that position, so I think that is an argument in favor of a very important situation. a fantastic future for the world over time and I think it's even more of an argument for a fantastic future for this company, a country, one of the best ways for young people to start now to secure their financial future for what Secure your financial future, are you?

youth

, well it's not, it's not very complicated, it all comes down to making the most of your own talents first.

I mean the difference between earning X, 2 or 3 times a year 20 years from now will be a function. of how well not how much talent you have, but how well you use the talents that you already have and that is your best financial future is your own ability and your ability to use those skills to their potential and they can't. Take that, they can't take it away from you, they can't even tax it. I mean, you know most things, if you and I know a piece of real estate, if they double the taxes, they double the taxes and that changes your ownership in the property because now, in effect, the tax authorities own more because they have a higher control over the flow of income;

The same goes for almost any asset you have, but they don't tax what you have in your head and they don't tax your ability to start performing when you get to work in the morning and finish at night to reach your potential. One of the things that surprises me is how people who really perform well jump at you once you're running a business. When I left school I thought you knew everyone would behave that way, but you don't. Most people sleepwalk through life, and if you don't, you'll stand out among the greats. The most important thing for your financial future is yourself now, beyond that, it is always to be ahead instead of falling behind, it is to save a little, no matter how you do it.

I mean, I delivered documents, I worked for pennies, I sold golf balls. pinball machine I did a lot of things that allowed me to accumulate about ten thousand dollars when I left school ten thousand is not as far now as it was then, but having something to keep you ahead of the game and not behind the game is enormously important. I mean, you just know if you're going to run a hundred 100-yard dashes against a group of people in life, if you can figure it out so that when the gun goes off. you're ten or fifteen yards ahead instead of 10 or 15 yards behind, that's going to make a huge difference in how the race goes, so having some net assets doesn't make much difference whether they're in stocks or bonds in my country. .

Seeing, but not having debt when that gun goes off when you leave school is a big advantage about being behind the game and you know it can come from delivering a newspaper in the morning, it can come from a part-time job. somewhere, but set aside a few dollars for yourself so that when it comes time to enter the end of the workforce you are ahead of the game and not behind and then once you get there, you are not left behind buying a lot of things that you think you are going to pay someday while paying 20% ​​interest among students.

If you could say your name and school when you ask the question, it's hard for me to see that we have the microphone even more. It's just me, my name is Patrick Dougherty and I'm one of the billions of us in high school. I was wondering with the rising costs of education today, what can students do to deal with their debt once they are done with college? Well, that's a tough question. I mean, I guess I would pay it off as quickly as I could and incur as little debt as possible before that time came and I would say that, in my experience in business, there is very little difference, if any, between an education very high-priced business and there's a lot available for a lot less money, so, I mean, I went to the University of Nebraska-Lincoln my last year of college.

I went to Wharton for a couple of years before and I learned as much at the University of Braska, as I did at Wharton in and there's nothing against the award nominees, just me, we had a very good school there, I had some fantastic professors in Lincoln, so I wouldn't assume that if you were paying a few thousand dollars for an education here in the state, for example, versus paying huge amounts elsewhere, that was going to make a big difference, most of the education in you need to be pushed in the right direction, but a lot of it is self-taught, I mean Andrew Carnegie.

I did something wonderful in this country in terms of libraries and I used to spend a lot of time in libraries. I think I locked myself into the University of Omaha, which was then the University of Omaha, and I couldn't get it. I was out for hours and was so fascinated by what I was reading, but there is all kinds of information available now with the internet, it's so much easier to know.that then, so it's there for the taking and you don't need to pay thirty or thirty five thousand dollars a year to go to a reputable school and get the education.

I mean, if you're going to learn accounting, if you're going to go to what is probably the most important course you take. In business, if you're going to learn counting, you might as well learn accounting, and my opinion is to go to you and always go to Harvard, I mean, I see, I'd bet on that and then I wouldn't rack up big bills in terms of getting an education. business. Now you know, if you're going to get a medical education, I mean, there are certain professions where you might not. There is some way to avoid spending a good amount of money and going into debt to a certain extent and you have to make that decision yourself, but I would certainly try to minimize it and sort of figure out how I can do it.

I would manage that debt and say a five year period after leaving school or I would think twice before incurring it. There is a question here if we can bring a microphone. My name is Kyle Clark. I'm here representing the Omaha Youth Advisor. Advice, what advice would you give to a fledgling nonprofit doing well as a nonprofit? I've always tried to avoid forming nonprofits when, well, that would depend entirely on what I wanted to accomplish. I'm serious, you know, the only thing that was a hospital, it could be something else, you know, there are so many types, so you know you have to get people who have experience and are involved in an entity like that, but it depends a lot. of the about the objective that you are working on, yes, but I promise this young woman that she is here microphone for a long time.

Hello, my name is Kara Hardware and I attend Millard West High School and I understand that you are very involved civically and I was wondering how important of a quality you think it is for an individual in life and why if well I wouldn't say I'm known or whether I do certain civic things I think I think your model as a citizen for example in all would be Walter Scott I mean he is much more civically involved than I am and, by the way, his predecessor Peter Kiewit was: Walters took him to new heights, so I don't want to take any responsibility for that.

I do some things, one of the problems I have is I love what I do so much that it kind of takes over. I mean, I'm like a guy who likes to play a lot of golf or some things that I like. I like the business I'm in, but I have a family that is very actively involved, some of my kids work on almost anything that comes up in the civic area and, you know, what you do, in the end people do what they want to do. to a certain extent and I think I have once spoken to someone. that they enjoyed working on civic activities that they didn't feel were worth it after they had done it, I mean, they built something and participating and building something is always a lot of fun and they actually have a good time, we have a golf tournament.

For example, in September we raised some money for choking, but everyone has fun, so no one pays any price for doing it. I'm having a good time, the people who come are having a good time and we can show off to people, but you should enjoy the things you do and you will if you work in civic activities that interest you, you can do the same in politics I say it in Seriously, you know if you get if you find political ideas or politicians that you particularly identify with, you can get a lot of self-satisfaction from not working and you're doing something worthwhile, so I just follow your instincts.

That is my recommendation. Hello, my name is Jeremy Graham from Millard South High School. probably I guess today's elite

youth

and I've been wondering what the problem is, the biggest economic problem that today's youth faces in the future, yeah, I don't think you're going to have huge economic problems. I think you will live in a society where the average person lives better by a significant margin than the average of a previous generation or two previous generations. That has been the history of this country. It's a wonderful country. In that sense, I mean it when you think.

Of that we have four and a half percent of the world's population, you know, and what has been achieved here is incredible, fifty-three percent of the value of the publicly traded corporations in the world exists in the United States. with four and a half. Percent of the population this country has always done well and they say that in the stocks that you reserve you should buy shares in a business that is so good that even an idiot can handle it because sooner or later you will do it and that is not a Terrible advice, well it looks like I've done it.

It's been kind of the history of this country from time to time, I mean, we've had all these problems that have arisen if you look back over the last hundred years and you list all the problems that this country runs into, you know what you do There is a very long list and many people who focused on those problems at that time have missed the bigger picture and the bigger picture is that each generation lives better than the last and that is because of savings, because savings allows People create new tools to do better things as they go and it is also due to an environment that allows people to develop their potential to a greater extent than most other environments in the world.

It's far from perfect. I mean, it's sad how far away it is. perfect, but it's better than anything else. I mean, in this country you don't have any commissioner or anything like that running a big business in this country, you have a guy like Jack Welch and a guy like Jack Welch makes a difference day and night in terms of the productivity of that business over a period of time. of decades and productivity is what causes the standard of living to rise, so any system that throws the Jack Welchs of the world into running businesses is going to have a huge advantage over a society that does so by inheritance or by government edict and we are closer to that society that I have described than anything else and than any other country and it has done two great things and will continue to leave great things, so I think you have the best future, you know, you don't confront, you don't confront to a war and you have it.

You have a greater future in terms of achieving material rewards than any generation in history, so I wish I could move you around. Although some of you might accept that, hello, I'm Ryan Wilkins from Millard West. High School and I was wondering if you could speak on behalf of mr. Gates was afraid of the impact of the year 2000 on the economy or specifically the stock market. Yeah, well, I'm glad you gave me the opportunity to bring other people in because I'm the last person in the world who understands what the year 2000 is. I know, I don't know why this microphone works.

I don't know, you know why likes go to the ER. I turn on the switch on my television and pray. I mean, I said it's all, it's all beyond me, but I would say this is the smartest people I know in that area largely I think will not be an event in this country. Don't know. I can't speak for the rest of the world, but I think you'll wake up. January 1 and discover that the world has not changed since December 31. Now I'd say you could get a whole group of friends to write you checks for a billion dollars on December 31st and deposit them and you know who knows what.

What will happen, I can't lose anything, I mean, it's not like doing is bouncing and if the system crashes, you know, Yahoo, you might find a lot of money in your account, but I wouldn't count on that, so wait, I have. We own a company called Executives, but we have about fourteen hundred or fifteen hundred customers who own airplane parts with us and we have 100, well we have 160 of their airplanes and some of our own flying around, it will be very interesting I for Seeing what the Advance people let us know in advance when they want to use it will be very interesting to see how many sign up for January 1st at 12:01 but I wouldn't bother flying them in the slightest. on January 1st or do anything else on January 1st, ideally I hope you were getting ready to watch the Huskers play and I'm Jamie Solace from Twin Valley and I was wondering how you decide what you spend your time and money on and yeah, well, I.

I would like to find companies that have good economics. What is good economics? Well, good economics is a company that has some kind of moat around it that makes its product, its service, its location or something a little more desirable than to the customer. any other comparable type of product, you know, the number one chocolate bar over the last 30 or 40 years has been Snickers. People don't play with different chocolate bars, they play with dresses of different lengths, they play with all kinds of things. but they don't play with chocolate bars because they imagine that they are going to come in and put 50 cents or whatever and put it in their mouth and they are not going to throw 50 cents and put it in your mouth. mouth, I mean, you're not going to say, I'll put, I'll put 45 cents and I'll put something else in my mouth so you find it very stable and we like businesses that we think we can figure out where they will be in 10 or 15 years I don't know where the information technology companies in 10 or 15 years I know where Snickers bars will be in 10 or 15 years they will sell more or less this, you know how they do it now I know where Wrigley's gum will be in 10 or 15 years no there will be a lot of innovation in gum in the end people the Internet will not make people stop chewing Me neither, I mean, at least I think Gates can think So, I don't think so, but it is a predictability regarding the sustainability of an advantage competitive.

There is something special about a product, so we look for those types of products and then we look for people to run the business who are honest and capable. I know it's easier to find honest, knowledgeable people than it is to find businesses that remain wonderful over a long period of time. There are a lot of businesses that seemed like they were going to continue to be wonderful but that really evaporated over time, but that's what we're looking for and the good thing is that we don't have to find many if we find one a year, that's great because you don't have to that a hundred or a thousand great investment ideas work well. you need a couple and if we discipline is the most important thing we don't need brain capacity we need discipline and you don't need 150 IQ to do what I do thank God you know you don't need 140 you know 135 you might need 115 or something like that, but you need discipline , you have to wait until you see the big pitch to swing because reversing is a well-known strike game.

You know, if I were a baseball player and I only liked two pitches. inches above my belly button, you know, some guy could learn that and he could throw me, you know, three or four inches below that and they call me strikes because I never find a pitch I like. You can take strikes in baseball. you have to swing at pitches that you don't even necessarily like, especially after the count gets to two strikes, you don't have to swing at anything, you can sit there and the paper says General Motors at 68 or it says General. Electric has 115 or General Dynamics says 63 and if you don't like those prices you have to change, you can wait there day after day after day and there are no strikes called now when you change when you decide to buy something.

You know, if you swing at this it's a strike, but it's a wonderful game because there are no called strikes and you can just wait for that one time every month or six months or a year, two or three years, when you really know. what you're doing, where you like the price or you like the people that run the business and then you change and you just need a few changes in your life, so that's the way we try to pick businesses, we try to stick to things that we understand. I mean there may be all kinds of wonderful investment opportunities that I don't understand.

I don't know what cocoa beans will do next year. You know, maybe you know, but I don't know. I don't know what I'm doing. I don't know what price crude oil will sell for, but I don't have to know. I just have to know what things I have to know what I know. I have to know where the limits of my understanding are. What I call my circle. competition is and if I can only evaluate 5% of the companies in the world, there is no problem, I just

stay

within that 5% and try to find something and that is what most people get into trouble because in investments itch them.

You know they can't discipline themselves and they hear about other people making money. Nothing bothers people so much when they hear that their friends make money. I mean, that's very destructive to discipline because they think I'm smart with that guy next door and He just bought that new car with money earned trading stocks on the Internet, so why can't I? The answer is: you can't. I will work at that time. You will lose money to actively trade stocks and it is difficult to exercise discipline, but every time you buy something you should be able to pull out a one-page sheet of paper and say, I buy General Motors, that's sixty-five.

I buy General Electric, a big cause of 150, and you must write the reasons if you can't if you can't fill out the sheet if it's because someone told me at a cocktail party last night that's not good enough if it's because mybroker told me that's not good enough yes, you have to have a reason to think it's a smart investment, you do the same thing if you're buying a farm or an apartment building, if you're buying a farm, you'd say, "I'm buying this farm and a thousand dollars an acre." because I think I can make sixty dollars an acre if the corn sells and so and so and the soybeans sells and so and so and the yield is so and so and you would realize that's the same reason you buy businesses and when you buy shares.

When you are buying a small part of a business and that is probably the most important thing to remember when investing is that when you buy a share you are buying a small part of the business and if you buy it at an attractive price for the business for the entire business you are going to make money and if you don't you know that over time you won't make money hello my name is cook McAvoy with all Carmel Michael ohm Reverend Jackson Jesse Jackson talked to us before it seemed I think that the moral standards of today's society will eventually affect us in the business.

How do you think this will affect us as young people growing up in the United States? He said that moral standards will affect how we feel, how we interact with other people. Well I think. It is very difficult to quantify moral standards over time. I mean you know you can detect enormous weaknesses at any given time in terms of how the people or the country is behaving and enormous strength, so I think it's enormously difficult to quantify it. I think we've generally made progress in what I would call institutionalized moral standards in this country, I mean, you know, in terms of slavery, in terms of, in terms of, I mean, women, women couldn't vote, you already know.

A century ago, half the country were second-class citizens in that sense and had far fewer rights in terms of inheritance and all sorts of things. Income tax didn't exist a hundred years ago, so the idea of ​​taxing people based on how much they benefited from society and their income didn't exist, so I think in terms of institutionalized moral standards, the country has made progress really significant in the last hundred years. I think there is a huge distance. I think we are going in the right direction, maybe in fits and starts, but I think we are going in the right direction and I think, as you know, it will be important to everyone in this room whether in forty years they will live in a society that is more moral than moral, but I think it's most likely that they will.

I think the country is moving in that direction. It is very difficult to do it. There are all kinds of interests that act against it, but in the end I believe. the American people want it and saw it in the case of civil rights. I mean, it took television to dramatize what was happening and people who weren't around it prefer not to think about it, but it reached the consciousness of the American people and a lot of progress has been made there and there's a lot left to do, but it's better than it was and the pace may seem very slow to the people involved and I can understand that the pace that you know for women's suffrage, I mean, it was for decades and decades and decades welcome I couldn't be on a jury I was reading the Clarence Darrow trial that took place in California around nineteen I don't know ten or eleven you know there were no women on the jury, the woman was They were not allowed to serve on a jury, they were not citizens in that sense, so, In my opinion, the moral behavior of the country has improved, but you know it and it will continue to improve and I hope that everyone in this room will do their part. to help improve Hi, I'm Nick jours from Central High and I was wondering how, since the stock market is so high right now, it would be smart for us to get involved now or wait until it goes down a little or what.

Yeah, I can't tell you whether or not to buy stocks now, in general, I think it's important that you save money, you know, and if you put them in the stock market, and I don't think it's very important, I think if you're interested. in stocks you should buy them you know and you have a little capital you should buy some I mean, I don't like that there is any way to learn about them better than experiencing that you are doing it on paper. I can also guarantee you that if you lose paper money or lose real money, it is a different experience and I believe that you will learn more about yourself if you do it that way.

I bought my first boat. When I was 11, it was actually Rose Hill at the time and I bought three shares of City Service Preferred at 38 and it went down to 27, which is something I still remember even though I was 11 at the time and then it was gone. until 14 I sold it, I made five dollars on my three shares after commissions and then it went up to two hundred something, so you know, I probably remember it a little better than if I had been doing it on paper and wasted time doing a lot things between the ages of 11 and 19 in the stock market I did charts I did all kinds of technical analysis I read every book I could get on the subject and I didn't do that well I didn't do terrible, but but I did, it was really giving turns, but that meant that when I was 19, when I read Ben Graham's book, I was at the University of Nebraska at Lincoln, I went and bought this book called The Intelligent Investor, which had just come out and had a huge impact. about me now if I hadn't done it in the previous eight years if I hadn't been everywhere I'm not so sure that book would have had the same impact on me I mean I was at the time I was prepared to read the book Ben Graham who changed my life financially in an incredible way.

I mean, I wouldn't be here today if I hadn't read that book, but yeah, part of life is preparing so that when something happens, it's meaningful. you can grasp its importance and know what to do with it and I would say that the first eight years of nonsense, although they produced nothing financially to speak of, produced a lot in terms of preparing my mind for what I actually read. something that made sense, so I was ready to accept it and I actually went back and went to Columbia to study under Graham and because I read that book and all kinds of things came out of it, so I encourage you if you do it.

I am interested in the field to do some things. I would still try to be as smart as possible. I would try to get on with things. Business I thought I understood. I would still take out that piece of paper and write. I'm doing this because, I just test my reasoning, then go back and read it a year later and see if what you thought would be true turned out to be true, so I always check in with myself. I believe in qualifying myself in everything you can. I know that doctors do autopsies and they do it because they learned from autopsies and business people don't like doing autopsies when I can be on the board of directors of a company and they can honor building plants or buying companies and Never They wanted, two years later, to see how that decision turned out because it can be unpleasant, but you learn from autopsies and you don't want to learn.

It's much better to learn from other people's mistakes, but you have to learn from some of your own, and the time to do that is when you're young, we can do maybe one more and then we end up with Wonder where maybe maybe two more. My name is Pete Walsh. I'm from Creighton Prep and my question is to what extent do you think the government with current welfare and social security policies is financially competent and fiscally prepared for the future. I think the country as a whole is pretty well prepared for the future. That doesn't mean that I would adopt all the policies that they have, but I think we have a huge lis-rich society, a huge lis-rich society, and it will become more rich, not everyone is going to participate in that, some will participate because of physical disabilities others due to mental disabilities others due to deficiencies in the education they received when they were children all kinds of reasons we have a society prosperous enough to be able to take care of those people and we must take care of them and how we do it so that they feel more useful in life and how we do it so that we continue to encourage people to be more productive and all that I mean those are not easy questions, but that should not take away our sight from above. the feeling ball we should do something about it I often pose this problem to people, I say, suppose it's 24 hours until you are born and you all can take this test 24 hours before you are born and a genie comes to you and the genie says what's your name.

I'm going to post what they'll call you Joe and the genie says Joe says you look pretty promising to me. I think you have a kind of sense of fair play and you have a good mind and that's why I'm going to let you have an extraordinary opportunity. I will let you design the world you will be born into in 24 hours. It's yours. You choose the political rules. You choose the political rules. economic rules you choose the social rules you design the world and when you are born in 24 hours you will be born in that world and that is the world that will exist throughout your life during the life of your children during the life of your grandchildren and you have heard of some of These genius jokes in the past would say what the trick that the genius tells is, well, it's a very slight trick.

I said that when you are born in 24 hours you will emerge into this world that you designed, but what I don't know is whether you will be born black or white, male or female, rich or poor, brighter, healthy or sick in the United States. United States or Afghanistan, all you know is that you are going to put your hand in this barrel that now has six billion balls, as we know, representing one person for every person in the world and you will participate in what I call the lottery from the ovaries, you will get a ball out of that barrel and you will never get another ball you get. a ball and now you're going to merge now what kind of rules do you want to have for that society without knowing what ball you're going to have now I'm putting it to you is the way I think people should think about social policy and if you're born, if You are lucky to be born in this country, you will have already won the lottery, but, in my opinion, we should have a system that encourages the Jack Welchs, the Bill Gates and all that to function well beyond time. when it has some economic meaning to them, we want people who control those resources and who are extremely capable of controlling them, that's how the standard of living advances, so we should want you to know that we should want Tom Osborne to train a Nebraska. we want Bill Gates to design software and we don't want to mix those two, we don't want, we don't want Bill to train in Nebraska, so you want people, you want a system that directs people towards their potential and and puts them in the position where they can do the most good for society, but you also want a system so that people get the wrong ball, I mean, someone will get the ball, you know, that says atiq, someone will get the ball that says this disease or that early disease in the life that cripples them and we have a society rich enough that we can take care of those people and I think, going back to your question, I think this society will move more and more in that direction.

It has the ability to move more and more in that direction as our resources and our production increase and I think it has the will to do it in a general way although, as I say, there have always been many ups and downs, so there are In the United States there is no there is a shortage of resources, there is no shortage of production, you need to have a system that encourages people to behave to the limit of their capabilities and puts them in the right place, but then you have to make sure that everyone is taken care of. - now we can do one more and then we'll break things up.

I'll let the guy with the microphone make the decision. Hello, my name is Ben Gold. I have a tablet brother and I wanted to know how you think the media affects the economically today, well that's a little question, well, which it obviously does just because it's moved so far technologically, it's brought it together in a big way. I mean, I was in China a few years ago and it was right after the time of the Women's Conference in Beijing and I was reading the Chinese coverage of that conference and of course it had nothing to do with what was going on, but The Internet was coming and, you know, you can access the Washington Post for the New York Times, where I get the Washington Post at 9:30 here at night, in fact, I was never able to receive it the next day by physical delivery, but I buy electronic delivery .

I can read it, you know, probably before most people. in Washington they're reading it, so the ability to communicate and the degree to which the world can be aware of what's happening in every place in the world is just you know it's been a quantum leap and you know there's going to be a lot of things. that arise from that and are an advantage over time, but I mean, the ability for information to be available to everyone around the world almost instantaneously and instantaneously is a huge advance in things like medicine, for example, just to choose. one, then it is a network and it also has a great effect and the definition of medium has expanded enormously lately.

I mean, there were three television networks and in nineteen and you know, the early 1960s and that was it, there were three. Thehighway information traveled electronically and if the three pieces of information where I Love Lucy and I Want Something Else on something else, those are the three information or entertainment options that you had for tens and tens of millions of people sitting there watching a tube is now unlimited and that's only for about three decades, so it just exploded and will continue to explode and net. I think it's an advantage and I think it's one.

I want to thank you all. I wish you the best you are going to do great no thank you thank you