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How to Stay Out of Debt Warren Buffett Financial Future of American Youth 1999

Mar 09, 2024
testing 1 million 2 million 3 million EPS working well I would like to talk to you about your

financial

future

and I hope those figures are 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 Let's talk for a couple of minutes and then 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 for just a second if, like us, I left here today I said I I would like to buy 10% of your

financial

future

.
how to stay out of debt warren buffett financial future of american youth 1999
I was going to write you a check today and from now on you were going to give me 10% of everything you earned. How much would you like? Charge me for it, I'll buy you a tenth of it and I may get a little extra, so be careful what you write now. Well, I think if you think about it a little, you can contemplate it for a few minutes. They know they will get a check for me today and they can do whatever they want with the money, but starting today they have to give me 10% of what they earn.
how to stay out of debt warren buffett financial future of american youth 1999

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how to stay out of debt warren buffett financial future of american youth 1999...

I think that would be very foolish of him. If you ask for less than, say, $50,000 now, it'll be a few years before you're out there making money, so I've got a few years of dead money there, but then I'd start charging you royalties as you go. I really think if you thought about it, most of you 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. It's up to me, but I think 50,000 would be the absolute minimum and if you think about that, that means today you are worth five hundred thousand because 10 percent of you is worth fifty thousand in cash, today your potential is worth a 100% minimum of five hundred thousand. dollars, that is the great financial asset for you, it is much more important what you do with that $500,000 asset that you have today than if you decide to buy stocks or bonds or if you put your money in a mutual. finance or pick your own stocks or anything like that, the biggest financial asset you have going for you is the value of your own purchasing power over the years, so that's really what you should focus on if you You are concentrating on your finances. future, that means you should focus on finances because if your ten percent is worth fifty thousand or one hundred thousand or three hundred thousand, which would be five hundred thousand or one million or three million to all of you, whether it turns out to be one or the another really depends largely on what they do in the next few years.
how to stay out of debt warren buffett financial future of american youth 1999
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. The question is how to apply it? If you have a 200 horsepower engine, you get 200 horsepower, you get your full potential, or you get 100 horsepower or 50 horsepower. Now there are two things that can prevent you from getting the maximum. horsepower of your engine, whatever it is, you all have big enough engines and one of them is a lack of education, but that probably wouldn't happen to many people in this room if you had a lack of education.
how to stay out of debt warren buffett financial future of american youth 1999
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 would never unlock it, but the second most important and equally important thing is the habits 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 want to be dumb and lazy don't you?
I mean, you know the last thing you want for that person is for them to be smart and energetic, so smart and energetic only goes with integrity, but kind. The thing is that you know you make your own decision, you can't change your IQ or how much 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 with that of anyone else. 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 or fifty thousand on the other hand if you do not combine it with the fact that your potential in an important part is not realized. will use and I'll 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 will 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 choose the person you admire the most, the person you would 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 that you would least like to change places with and that you really dislike because you find them repulsive and let's look at the reasons why that is. person discourages you a lot and put them on the other side of the paper and then look at that list and you will find that everything that is on the left side with what you admire in other people the qualities that bring you joy in life Know generosity, all kinds of things, you will find that they are things that you can do yourself, it is very simple, you have to put in the effort yourself, but the habits you form by doing it from the beginning will help you throughout life and on the other hand, you will find that the things that make people repulsive, selfish, hateful, all these things, the tizen inka, are things that no one has to have, if you find them in yourself, you can get rid of them as long as you eliminate them early, so everything that I suggest you write a list of what you admire, what you find despicable 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 that when you are young and accompany yourself during the rest of your life.
In your life, this does not work if you do it when you are 50 or 60 years old, then the habits are too well formed, but if you do it early, the behavior becomes a habit, so if you do it within two or three years , yes Do the same exercise and you will discover that the person you admire the most is yourself, which 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. I don't want to be someone who is your other and doesn't like you and forms 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 is, as a general matter, a specific piece of finance, financial advice. I would say avoid credit cards, just forget it, we are in several businesses that issue credit cards. The American public loves credit cards, but if you start. revolving

debt

on credit cards, you are going to pay eighteen or twenty percent and you cannot progress in your financial life by borrowing money at eighteen or twenty percent, you can make a lot of money by lending it at eight or twenty percent. 18 or 20 percent over time, you know if you can find someone good to borrow from you, but you don't want to be on the side of the equation that's always behind in life, you know, I was lucky to have saved about ten. thousand dollars when I left school, that 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 about ahead of the game, if at any time you are behind the game for ten thousand dollars and you pay eighteen or twenty percent interest, you will never win them, you will never get out of there, so the trick that I have partner that says that everything I want know is where I'm going, I'll never go there, you know?
And that's true in financial matters too. You want to find out where you don't want to be ahead of time and avoid it. that and 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 really have been affected by some or Someone in your family has been struck by some type of catastrophic illness and that is a terrible thing that happens to any family and they receive ironic bills that they cannot pay and really only society can solve that in terms of protecting the people against that is just bad luck, but the other is people who rack up credit card

debt

and are facing bankruptcy or have already been through bankruptcy once before and they all have a ton of money and can't even They can pay the interest much less pay the principal and half of my letters come from people like that and that problem is avoidable, a catastrophic illness is not, but credit card debt is something that you must cause yourself and it is a better way, it's a lot easier to

stay

out of trouble than it is to get out of financial trouble and on the other hand I guarantee that if you use a big credit card you'll probably be in trouble for the rest of your life in terms of your financial situation .
If you get ahead of the game, even on a very modest scale, so that the money comes from investing and if people owe you money or stocks owe you ownership, you will be way out of the game compared to paying it is always paying to 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 to see you. bored Shyam's or the risk of Furniture Mart. Now let's ask some questions. Do we have a microphone that people can go to or travel to and I can't necessarily see very well?
We're going to have 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, whatever you have in mind ask you, no, no, don't be shy, yeah, How would you advise people? who aren't necessarily going into a career field where they would make a big base salary, like medicine or something like that, maybe performing arts or music, how would you recommend we 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 just take 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 you try to do a lot. of money I think it's generally worth going with what you love and I think it's very difficult to find people when they get to my age who say they've loved what they've done their whole life. and they feel like it was worth it, 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 dedicated themselves to something else where they were. I was uncomfortable doing it or I didn't enjoy it I didn't feel very productive but I made a lot of money so no, I don't think you'll find it so I would do it, I would go to work, I would go to Work on anything that turns you on, it might turn out to be more profitable than you imagine, but almost everyone here will make enough money unless they pick up some terrible habits along the way to do reasonably well and do reasonably well. in this country it's actually pretty good, I mean you don't have to have huge amounts of money to be able to enjoy it, so yes I enjoyed it when I had my $10,000 and I live in the same house that I lived in when I was doing it when I had that .
I bought it 41 years ago. I like the house, then I like 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 there. eating McDonald's, so let's push the food. I mean, you know, I open, in fact, I hope it's Dairy Queen and they had. 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 we'll look.
More or less the same and we will 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 is similar good. and then what difference does it make if you have 50 more rooms or you know that guest houses are all that? You know it will probably only bring your problems. I mean, you have to worry about the gardener or something when you're done. a sigh III I've been in people's houses where the houses are worth Oh, probably 200 times what my house is worthhouse and I wouldn't be happier in those houses at all, in fact I would be less happy.
I just have one more thing to worry about, you know, the dozens of people around the place and the people who quit and the people who steal from you and all kinds of things to hell with it, yeah, we drive, we'll drive the same kind of car , you probably drive a better car. I drive cars that are about eight years old. I don't know what it's worth now, but it's worth it. I'm fine, I mean, I'm perfectly happy, we'll see well, what is the same television? You know, we will work on the same computer, practically, the only difference will be how we travel long distances.
You know, I'll fly on a plane. That's more convenient and limited than flying Southwest Airlines or something I have nothing against, but that's the only big difference and other than that, I do what I love every day. I hope you do what you like to do every day. and I work with nice people, I don't work with very great people and there are 24 hours in the day and that's where the hours go, so great wealth is a little bit different in a real sense than having just a decent income and and Exchange a A decent income and something you love to do and something you feel is worth doing for enormous wealth where you trade a lot of your principles would be a terrible mistake.
Wouldn't you recognize your success more in yourself or in hope and teachings? from others, well, I had, I had, 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 the business, so I have had excellent teachers, some formal teachers, some who were just informal teachers, teachers by instinct or example, and if I hadn't had those, you know my I'm sure my life would have been very different if I had been born somewhere else when I was born in 1930 and at that time one of the 50 worst in the world was in the United States, so I I found fifty to One thing is against me if I had been 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, I was extraordinary for being born. You know, being born in this country. of you, I mean, look, the odds were probably forty to one against you being born in this country and you were five times more likely to have been born in China, six times more likely than four or five times more likely to have been born in India or some other place where it wouldn't have been so easy to exploit the full potential of your talents, so we've all won in that sense and that's just luck, I mean, 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 either. Many years ago, my friend Bill Gates says that if I had been born a few thousand years ago, years ago I would have been lunch for some animals, you know, I can't run very fast and I can't climb trees and you know, it just happens, those are talents that no one asked me to climb trees now, but there was a time when it could have been important and, by the way, Bill would have been an animal's breakfast.
I mean, he can't run that fast either, but in any case, you know we're lucky. Imagine being poor and a couple of hundred years ago having exactly the same talents and how far they would have taken you, then you know, the average person lives much better than the richest person 100 years ago, so in that sense I'm lucky to being born to fantastic parents. I was lucky to have been raised. in Omaha and in a great public school system, I started here in the first eight grades, which gave me a foundation that then, when I got off track a few times, helped me get ahead because I had a great elementary education and right here in Omaha in Rose Hill and, by the way, one of the reasons I had it is a little unfortunate, but I had that great upbringing in part because women were being massively discriminated against and therefore a woman at that time could be a teacher, I could be a secretary.
I could be a nurse, you know, and that was it, so you had half the talent pool in the United States limited to a few jobs, so you had a lot of talent in activities like nursing or teaching because that talent between the men spread. in every act, in every form of work activity 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 really have been. my whole life and what I do is what I do is important, you know what a good teacher or a nurse or something does, you know, I think that's quite questionable, it pays off enormously in a market economy like the United States.
United and, but that is an accident, narrative makes 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 the Fourth of July celebration with a friend and who subsequently died on my green field with Washington.
She and Post 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 is 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's going to change and that's it.
One of the things that I think about in companies is that yesterday we announced the purchase of a furniture retailer in Boston, in the Boston area, and you know, I think what effect will this new thing have or have in terms of the Internet in commerce? furniture retailer. I mean, you have to think about questions like that, that the changes will be huge. Yesterday I played 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 one guy wants to play golf, another wants to watch baseball and he broadcasts it, it changes things tremendously.
We're very fortunate, I mean, it's to the extent that the United States leads the world in this. I mean we have an advantage, it's hard to think who is in second place and about 15 years ago this country had an inferiority complex that would be hard for you to remember because you weren't old enough to be around them, but in early 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 their cars and everything else and the televisions and we were going to flip hamburgers, that was the standard line and I just imagined in a short period like 15 years how that changed in a major way that changed because of this information revolution that we like I said I don't know who I don't know who you I would name it second 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 for a very important situation. for a fantastic future for the world over time and I think it further advocates for a fantastic future for this company and a country one of the best ways for young people to start now to secure their financial future for what to secure their financial future for young man, well, it's not very complicated, first it's about making the most of your own talents.
I mean the difference between earning own ability and your ability to use those abilities 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 want, you know, real estate, if they double the taxes, they double the taxes and that changes your ownership of the property because now, in fact, the tax authorities own more because they have a higher control over your income stream, the same goes for almost any asset you have, but they don't tax what's in your head and you don't test your ability to start performing when you get to work in the morning and finish in the evening. night to reach your potential.
One of the things that amazes 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 they don't. Most people sleepwalk through life, and if you don't, you'll stand out a lot. The most important thing for your financial future is yourself now beyond that, it's always being ahead instead of being left behind, it's saving a little, no matter how you do it, I mean, I turned in papers, I worked for pennies, I sold Golf. balls from a pinball machine.
I did a lot of things that allowed me to accumulate about ten thousand dollars when I left school. Ten thousand doesn't go as far now as it did then, but having something for you. Being ahead of the game and not falling behind is hugely important. I mean, you know if you're going to run a hundred 100 yard races against a group of people in life, if you can figure it out so that when the gun comes out, you're ten or fifteen yards ahead instead of ten or fifteen yards behind, it will do a huge difference in how that career plays out, so having some net assets doesn't make much difference whether they're in stocks or bonds.
In my opinion, but not being in debt when that gun goes off when you leave school is a huge advantage over being behind the game and you know it makes them deliver a newspaper in the morning, it may come from a part time job. work somewhere, but set aside a few dollars for yourself so that when the time comes and you enter the back end of the workforce, you're ahead and not behind and then once you get there, you're not left behind buying a bunch of things you think you're going to pay someday while paying twenty percent interest among students, if you could say your name and school and ask a question too difficult for me to see that we have even more is the microphone, but my name is Patrick Dougherty and I'm from Billions High School in LaVista.
I was wondering with the rising costs of education today, what can students do to deal with their debt once they finish college? Well, that's a tough one, 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 from my experience in business, it makes very little difference, if anything. that there is any. between a very high-priced business education and what'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 Braska University as I did at Wharton in and there's nothing against the award nominees, I just had a very good school there, I had some fantastic teachers in Lincoln, so I wouldn't assume that if I was paying a few thousand dollars for an education. here in the state for example, compared to paying huge amounts elsewhere, that would make a big difference, most of the education in you needs to be pushed in the right direction, but a lot of it is self-taught , I mean.
Andrew Carnegie did a wonderful thing in this country in terms of libraries and I used to spend a lot of time there. Riis. I think I locked myself in at the University of Omaha 1, which was then the University of Omaha, and I couldn't do it there. I didn't go out for hours and one night I was so fascinated with what I was reading, but now there is all kinds of information available on the Internet, it's much easier than 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 renowned school and receive an education.
I mean, if you're going to learn accounting, what's probably themore 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 the port, I mean, I see, I would bet on that, so it wouldn't generate big bills in terms of obtain a business education. Now you know, if you are going to obtain a medical education. I mean, there are certain professions where there may be no way to avoid spending a good amount of money and going into debt.
To some extent, you have to make that decision yourself, but I would certainly try to minimize it and, in a way, I wouldn't have figured out how you wouldn't handle that debt and, say, a five-year period after leaving school or you would think twice. before we get into it there's a question here if we can bring a microphone my name is Kyle Clark I'm here representing the Omaha Youth Advisory Council what advice would you give to a nonprofit in the making doing well profit? I've always tried to avoid forming nonprofits when, well, that would completely depend.
I wonder what he wanted to achieve. I'm serious. You know. One thing was a hospital. It could be something else. You know there are so many. types of that, so you know you have to get people who have experience and are involved in an entity like that, but it depends a lot on what goal you're working on, you probably promised this young lady here a microphone. For a long time, hello, my name is Cara Hardware and I attend Millard West High School and I understand that you are very civically involved and I was wondering how important that quality is for an individual in life and why, yeah, well.
I wouldn't say I'm satisfied, that is, I do certain civic things. I think that his model as a citizen, for example, in everyone, would be Walter Scott. I mean, he's much more civically involved than me and, by the way, his predecessor Peter Kiewit. He was too, but Walters took it 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 that I love what I do so much that it kind of takes over. I'm like a guy who likes to play a lot of golf or something, except I like the business I'm in, but I have a family that's very actively involved, some of my kids work on pretty much anything that comes along. the civic area and you know what you're doing, in the end people do what they want to do to a certain point and I don't think I've ever talked to anyone who liked to work in civic activities that they didn't feel was worth it afterwards. they've done it, I mean they've built something and being involved in building something is always a lot of fun and you actually have a good time, we have a little golf tournament for example in September and we raise some money for some event, but everyone has a good time, so no one pays any price for doing it.
I'm having a good time because people will come or have a good time and we can show off everything to people, but you should enjoy things, you do and you will. You work in civic activities that interest you. You can do the same in politics. I'm serious. You know if you find political ideas or politicians that you particularly identify with. When you can get a lot of self-satisfaction. you're not working and you're doing something worthwhile, so I'm just going with your gut on that and need my recommendation. Hello, my name is Jeremy Graham from Millard South High School.
It's probably me and today's elite young people. I've been wondering what you think is the problem, the biggest economic problem facing today's

youth

in the future. Yes, I don't think you're going to have huge financial 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 is a wonderful country, that way I mean it, When you think about it, we have four and a half percent of the world's population, you know, and what has been accomplished here is incredible, 53 percent of the value of the world's publicly traded corporations exists in the United States, with four and a half percent of the population, this country has always done well and In stocks they say you should buy shares in a business that is so good that even an idiot can run it because sooner or later he will, and that one doesn't That's terrible advice, well it seems like it's been kind of the story of this country from time to time.
I mean we've had all these problems that have come up if you look back over the last hundred years and you list all the problems that this country has run into you know you make a very long list and a lot of people who focused on those problems at that point they haven't grasped the bigger picture and the bigger picture is that each generation lives better than the last and that is because of savings, because savings allow people to create new tools to do better things as they go along 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 from perfect it is, but it's better than anything else. 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 who makes the difference between day and night in terms of the productivity of that business for decades and the productivity is what causes the standard of living to rise, so So anything that a system that throws in the Jack Welchs of the world to run businesses will have an enormous advantage over a society that does it by inheritance or by government edict and we are closer to that society that I have described than any other country and has led to two great things and will continue to lead the great thing so I think you have the best future you know you are not facing a war and you have it you have a great you have a better future in terms of achieving material rewards than any generation in the story, so I wish I could trade places with them.
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 sir. 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 the lights come on. I turn on the switch on my television and pray.
I mean, I say it's all, it's beyond me, but I would say this is the smart thing to do. people I know in that area largely think it will not be an event in this country. I can't speak for the rest of the world, but I think you'll wake up in January. First and discover that the world has not changed since December 31st. 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. It happens, you can't lose anything, I mean all they do is bounce around and if the system breaks down, you know, Yahoo, you might find a lot of money in your account, but I wouldn't count on it, so wait, we have a company we should have. called executives, but we have about fourteen hundred or fifteen hundred customers who own aircraft parts with us and we have 100, well, we have 160 of their aircraft and some of our own flying around, it will be very interesting for me to see them.
What the advanced people let us know in advance when they want to use it will be very interesting to see how many sign up for January 1 at 12:01 but I wouldn't mind in the least flying it on January 1 or doing anything else on January 1 , 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 where you spend your time and money. Yes, well, I like it. find companies that have good economics now, what good economics, good economics or a company that has some kind of moat around it that makes its product or its service or its location or something a little more desirable to the customer than anyone else 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 don't play with chocolate bars because they figure you know they're going to come in and put in 50 cents or whatever and put it on them. in your mouth and they're not going to put 50 cents in your mouth, I mean. You're not going to say I'm going to put in 45 cents and put something else in my mouth so you find it very stable and we like businesses that we think we can determine where they will be in 10 or 15 years.
I don't know where IT businesses will be 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, like they do now. I know where Wrigley's gum will be in 10 or 15 years there won't be much innovation in chewing them, the end people The Internet won't make people stop chewing gum either. I mean, at least I, Gates, may think so, but I don't think so, but it's the predictability with respect to the sustainability of a competitive advantage, 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, and you know it's easier.
It's harder to find honest, capable people than it is to find businesses that will continue to be wonderful for a long period of time. There are a lot of businesses that seemed like they were going to continue being 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 fantastic because you don't need a or a thousand great investment ideas. Get it right, you need a pair. and if discipline is the most important thing, we don't need brainpower, we need discipline and you don't need an IQ of 150 to do what I do, thank God, you know you don't need 140, you know 135, you may need 115. or something so and but you need discipline, you have to wait until you see the big pitch to swing because reversing is a game called strike, you know, if I were a baseball player and I only like pitches 2 inches above my belly button . you know, some guy could learn that and he could throw me, you know, 3 or 4 inches below that and they call me strikes because I would never find a pitch that I like, you can call them strikes in baseball, you have to do it. you have to swing at pitches that you don't even necessarily like, especially after the count makes the two strikes, you don't have to swing at anything, you can sit there and the newspaper says General Motors at 68 or it says General Electric at 115 or says General Dynamics in 63 and if you don't like those prices, you don't have the swing, you can wait there day after day, after day, and there are no strikes called now, when you swing when you decide to buy something, then you know. if you miss, it's a strike, but it's a wonderful game because there are no called strikes and you can just wait once in a month or six months or a year or two or three years when you really know what. you're doing what you like, the price, we like the people who 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 choose businesses, we try to

stay

in things we understand, I mean, there.
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 not. I know what 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 of competence. It's and if I can only evaluate 5% of the companies in the world, no problem, I just stay inside that Viper and try to find something and that's what most people get into trouble because in investments they It stings, you know.
They can't discipline themselves and they hear about other people making money. Nothing bothers people as much as hearing 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? Well, 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 great cause of a hundred and fifty and you must write the reasons. if you can't if you can't complete the sheet if it's because someone told me at a cocktail party last night that's not good enough if it's because my broker told me that's not good enough yes, you have You have to have a reason to think that it is a smart investment. You do the same if you buy a farm or an apartment building. If you buy a farm, you would say:"I'm buying this farm and a thousand dollars a year." acre because I think I can make sixty dollars an acre if you grow corn sells so and so and soybeans sell so and so and the yield is so and so and you would realize that that is the same reason you buy businesses and When you buy a stock you are buying a small part of a business and that is probably the most important thing to remember is that when you buy a stock, you are buying a small part of the business and if you buy it at an attractive price for the business, for the whole business you are going to win. money and if you're not you know that over time you won't make money hello my name is cliff McAvoy with old Carmel Michael Oh Reverend Jackson Jesse Jackson spoke to us earlier seemed to believe that the moral standards of today's society will eventually affect us in 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 us. How business will affect us by how we feel and how we interact with other people. I think it's very difficult to quantify moral standards. At this point 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. 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 know, a century ago, half the country was second class citizens in that sense and they had a lot fewer rights in terms of inheritance and all kinds of things, income tax didn't exist 100 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 really significant progress in the last hundred years.
I think there is a huge distance to go. 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 you know that will be an important we for everyone in this room as they live in a more moral society. Society in 40 years will be less moral, but I think that is most likely the case. I think the country is moving in that direction. It is very difficult to do it. There are all kinds of interests that go against it, but in the end I think the American people love it and you saw it in civil rights, I mean, it took television to dramatize what was happening and the people who were not close to He prefers not to think about it, but it has reached the consciousness of the American people and much progress has been made.
There is a lot to do, but it is better than it was and the pace may seem very slow to the people involved and I can understand that the pace you know for women's suffrage I mean one that lasts for decades and decades and decades, welcome. couldn't be on a jury I was reading the Clarence Darrow trial that took place in California around 19 I don't know 10 or 11 you know there were no women on the jury the women weren't allowed to be on the jury they weren't citizens at that time sense, so, in my opinion, the moral behavior of the country has improved, but you know, it will continue to improve and I hope that everyone in this room will do their part to help improve.
Hello. m Nick works from Central High and I was wondering how, since the stock market is so high right now, it might be smart for us to get in on it now or wait until it goes down a little or what, yeah, I can't tell you whether to buy or not stocks now in general, I think it's important that you save money, you know, and if you put into the stock market, and I don't think it's very important. I think if you are interested in the stock, you should buy. If you know and have a little capital you should buy some.
I mean, I don't like it. There is no way to learn about them better than experimenting and doing it on paper is not the same. I guarantee it if you lose. Paper money or losing real money is a different experience and I believe you will learn more about yourself if you do it that way I bought my first hit when I was 11 I was actually a Rosehill 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 it was 11 at the time and then it went up to 40 and I sold it.
I won five dollars. in my three stocks 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 of 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 it very well I didn't do it terrible but I did it I was really wandering around but that's why it meant that at the age of 19 years ago, when I read Ben Graham's book, I was in college at Nebraska and Lincoln, I went and bought this book called The Intelligent Investor that just came out and now it had a huge impact on me if I hadn't done it in the eight years.
If it hadn't been everywhere, I'm not so sure that book would have had the same impact on me. I mean, at that point I was ready to read Ben Graham's book, which changed me and 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 important happens, you can understand its meaning and know it. what to do with it and I would say that the first eight years of nonsense, although they didn't produce anything financially to speak of, they produced a lot in terms of preparing my mind for what I actually did, I read something that made sense, so I was ready to Lo I accepted and I actually came 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're interested in the field to do a few things which I would still try to do and do as smart as possible.
I would try to stick with things I thought I understood. I would still take out that piece of paper and write. I'm doing this because and just trying. my reasoning and then I 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 checked myself. I believe in qualifying myself according to everything you know that doctors do post-mortem and They do it because they learned from autopsies and businessmen don't like to do autopsies when I can be on the board of directors of a company and they can honor the construction of plants or the purchase of companies, and two years later they never wanted to conduct a verification of how that decision turned out because it can be unpleasant, but you learn from autopsies and you don't want to learn.
It is much better to learn from other people's mistakes and your own, but you have to learn from some of them. your own, and the time to do it is when you're young, we can do maybe one more and then we end this wondering 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? Well, I think the country as a whole is pretty well prepared for the future, that doesn't mean I would adopt, I would adopt all the policies that they have, but what I think is that we have a huge Lee-rich society, a huge Lee-rich society.
Read, and you will become richer. Not everyone is going to participate in it, some will participate because of physical disabilities, others because of mental disabilities others because of deficiencies in the education they received as children, all kinds of reasons why we have a society prosperous enough to be able to care of those people and we should take care of them and how we make them feel more useful in life and how we make it so that we continue to encourage people to be more productive in everything I mean, those are not easy questions, but that It shouldn't take away from us feeling like we should do something about it, I often raise this issue with people.
I tell you, let's say it's 24 hours until you're born and all of you can take this test 24 hours before you're born and a genie comes up to you and the genie says what was your name again out there whatever they 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 a good mind, so I'm going to let you have an extraordinary opportunity. I'm going to let you design the world you're going to be born into in 24 hours. It's yours. You choose the political rules.
You choose the economic rules. You choose the social rules. rules, you design the world and when you are born in 24 hours, you will be born into that world and that is the world that will exist for your entire life, for the life of your children, for the life of your grandchildren, and you have heard of some of these Geniuses. The jokes in the past said what the trick is, says the genius, well, it's a very slight trick. I said that when you are born in 24 hours you are going to emerge into this world that you designed, but what you don't know is if you are going to be born black or white rich or poor man or woman brighter healthy or sick in the United States or Afghanistan the only thing you know is that you are going to put your hand in this barrel that now has six billion balls, as we know, that represent a person, every person in the world and you will participate in what I call the ovary lottery, you will draw a ball from that barrel and you will never get another ball, you will get a ball and now you are going to merge now what kind of rules do you want to have for that Society without knowing what ball you are going to get now what I put is the way I think people should think about the Social Policy and if you are born if you are born If you are lucky enough to be born in this country, you have already won the lottery, but, in my opinion, we should have a system that encourages the Jack Welchs and the Bill Gates and all that to work very hard beyond the point where it has any economic importance to them we want people who command those resources who are extremely capable of commanding them, that's how the standard of living advances, so we should want and I wish you would want Tom Osborne to train a Nebraska, we should want, we should want, Bill Gates designing software. and we don't want to mix those two, we don't want, we don't want to be trained by Bill in Nebraska, so you want, you want people, you want a system that leads, brings people to their potential and puts them in the position where they can do the greatest 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 disease before in the life. that paralyzes them and we have a society that is rich enough that we can take care of those people and I think, going back to this question, I think that this society will move more and more in that direction that it has the capacity to move more and more in that direction. direction as our resources and our production increase and I think it has the will to do so across the board although, as I say, there has always been a lot of ups and downs, so there is no shortage in the United States.
Resource states 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 it. 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 brother who tells me this and I wanted to know how you think the media affects the world economically today. It's a little question, well, which he obviously does, simply because he's moved so far technologically that he's brought it together in a big way.
I mean, I was in China a few years ago and I was right after 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 as you know, you can access the Washington Post or the New York Times, where I get the Washington Post at 9:30 here at night, in fact, I was never able to get it the next day by physical delivery, but I buy electronic delivery. I can read it, you know, probably sooner than most people in Washington read 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 will come out of that and net there are advantages. over time, but I mean, the ability for information to be available to everyone around the world almost instantly instantly is a huge advance in things like medicine, for example, just pick one, so it's a net plus. It has a huge effect and the definition of media has now expanded enormously.
Lee, I mean, there were three television networks and in the nineteen nineteen and you know, the early sixties and that was it, there were three highways that information was traveling electronically and if the three pieces of information were I love Lucy and I want something else in something else those are the three options of information orentertainment that had tens and tens of millions of people sitting there watching a tube is now unlimited and that's only 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. great no thanks thanks

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