each year Microsoft research hosts hundreds of influential speakers from around the world including leading scientists renowned experts in technology book authors and leading academics and makes videos of these lectures freely available The Life and Times and and a bit about the mind of one of the most important men in the world Warren Buffett though we know a lot or we think we know a lot about him he's certainly a media darling um we with Alis sh's help we get to learn what it's really like in his life in his mind hear about his struggles his mistakes yes he has made mistakes and of course his triumphs Alice had unprecedented access to this complex man and her comprehensive book The Snowball which we she's here to talk about today is now the number one bestselling book on the New York Times list clearly in this precarious and scary Economic Times there's a lot we can learn from the Oracle of Omaha so I'm thrilled that Alice could come all the way here and discuss it with us please join me in welcoming Alis Shredder to Microsoft research Kim thank you very much and thank you all very much for having me um so what I'd like to do today is talk a little bit about the journey that brought me to writing this book and also I know many of of you will have questions about the two men the minds of the people who came together to create the largest foundation in history and the one that will change the world and I will answer all the questions that you want about that I'm not going to talk um so much about the gift in my presentation because it's a speech Topic in and of itself and so I'll answer as many questions as you want but what I'd like to do is more talk about Warren Buffett and a little bit about Bill Gates and the two of them and my journey to write this book as um to help you understand a little bit as a Prelude to see why Warren Buffett is the unusual person that he is and the story of the writing of this book and that might help introduce a little bit of the subject of um how he came around to the decision to give the money to The Gates Foundation I first met Warren in 1998 when I was an analyst at Payne Weber and it was just at the beginning of the period when the internet bubble began to really take off and at that time I was an analyst following Insurance stocks and Berkshire Hathaway had become mostly an insurance company by following um the path of acquiring companies it had just bought General re insurance which was a very large company and I was the only analyst on Wall Street who followed the stock and Warren decided that he would talk to One analyst on the street and because he had gotten interested in my research and I was the only person following the stock I ended up getting to go out to Omaha and see him about once a year talk to him on the phone whenever I wanted and I ended up becoming a fairly close Observer to what was happening to him during this period of time at the time the business press was harshly critical of him um somebody said that you know the in uh technology investors had made a chimpanzee out of Warren Buffett and some of the things that were being said about him were really really pejorative he was um following the and true investment methods that he always has and he never came out in public he never commented on it he always just continued to do what he's always done which is the value investing philosophy but I asked him one time how he felt about this barrage of criticism that he was receiving in the press and this was the first time that I got any kind of insight into the personality of um War and what he was like uh because up until then I had only known him as an investor and a businessman and when I asked him how did he feel about the siege of criticism he said it never gets better it always hurts just as much as the first time despite having heard over and over and over these things it it was really remarkable that he could withstand this that he could not change his investing style at all and yet it was clear that he found the personal criticism intensely painful and was very very sensitive to it during that time he went out to Sun Valley in July of 1999 and he gave a speech that might uh have been the most remarkable of his career and I opened the book with that speech in Chapter 2 which is called Sun Valley the Sun Valley Conference is a group of uh media people um who meet in the mountains every year at Sun Valley Ido and it's the Allen and& Company conference it's a very exclusive event of high level people and uh Bill Gates goes to it Warren always goes to it and they have presentations how many of you have heard of it have you any of you heard of Sun Valley okay it's um it's partly social they also have presentations in the mornings and the media um reporters are not allowed to attend these events so people get up at the podium and they say things that they would not Norm say in front of the press in this case Warren gave a speech in which he talked about the stock market and he gave the history of Technology from the Advent of automobiles to the airplane forward and he talked about periods during which the stock market had performed badly for as long as 17 years at a time in effect he was prophetic he made a lot of jokes and he kitted around and he wasn't personal about about it but he talked to a room full of people many of whom had internet startup companies um a number of which are no longer with us and he told them that the valuations of the internet stocks at the time were um not credible and that the investors were likely to be very disappointed and he predicted that over the next um couple of decades he could foresee that the stock market would return no more than 6% a year at the time a pain Weber study of investors showed that um the typical investor was expecting something like 20% returns and so that was considered to be just a a dreadful um number people were very upset he was ridiculed for this people in the room were snickering um one person told me that in the lady's room at the break women were making fun of him the W you know the Silicon Valley wives where you know oh he's just such a hasband and Warren himself didn't really register that I mean it was it was a brilliant speech it ended up becoming an article in fortune and perhaps one of the most prophetic things he's ever done because um you may have read The Wall Street Journal some months ago when it called the last decade a lost decade in the stock market it's been um you know more than 10 years now and you all know what's happening in the market right now um with the financial Panic uh since Warren made that speech you know the Market's actually gone backwards and he took a consider risk in some sense to make that prediction he put his reputation on the line and he knew he was doing that and this is somebody who um is a teacher and he wants the world to listen to what he has to say so by going out and making that prediction he was risking um his ability to come out and have himself listen to again he's never made a prediction about the stock market um since he was uh in in his 30s it had been been almost 50 years since he had made a prediction about the stock market and he finally did it in that speech it was an extraordinary event uh when I was working on the snowball the first time I interviewed Bill Gates I came out here and we sat down in his office and he told me about the experience of of witnessing that speech and the main thing that he remembered other than what an incredible speech it was was how nervous he was because Warren had decided to click his own PowerPoint slides and and um Warren has you probably know is not that Savvy with technology when it comes to dealing with it on a personal level he had never done PowerPoint before and he did have slides and he managed to get through it without any terrible mishaps and the slides did match what he was saying but Bill said he was holding his breath in the audience you know every time waren clicked the slide hoping that you know nothing blew up or nothing you know terrible happened and that was one of the funnier moments of my interviews so fast forward uh to 2003 and at that point um the market had um gone through 911 Warren had come out after 911 and he had tried to you know tell the country that if the market declined enough he would buy stocks you'd had um the Enron um situation in which company after company had scandals the market had gone down the market had gone up but it had mostly been in an uptrend um by 2003 I ended up speaking to one about the fact that I thought he should write a book that ended up becoming the snowball which would be a comprehensive story of his life and the unusual person that he's become he turned around the question on me and I ended up volunteering to do it and he offered to cooperate with me cooperation um meant that uh he would do interviews with me I would be able to talk to his friends and his family and I would be able to see his correspondence and go through his files and it meant the book could be a major um project that would be the one time that somebody could really write a seminal book about Warren Buffett and at the time I already knew that it would be a very important book since then you know he has only become a more and more important figure in the world but at the time I thought you know this is something that really needs to be done and so in um May 2003 I went on leave of absence from Morgan Stanley where I was a managing director at the time and I started to work on this book I knew Warren then still mostly as a businessman and I for example I hadn't heard the Sun Valley story I just read the speech uh in the magazine I still knew he was very sensitive to criticism but I didn't know him that well as a person and so when I showed up in his office the very first week to work on the book the first thing he did was he opened his desk and he pulled out a set of dice three Dice and the dice had all these odd numbers on them 17 21 3 5 and and they had multiple sides and he said now you pick one and then I'll pick one and we'll roll them and we'll see who wins and the numbers were they didn't follow any sequence but he said study the numbers and then you can pick take as long as you like so I started looking at these Dice and it was clearly apparent to me that no matter how long I looked at them I would never be able to figure out what the pattern of numbers meant and I think there some of you in this room might have a better shot at it than I would because there's probably some engineers in here but I am not a math junkie so I started thinking about it from the framework that I come from being an insurance analyst is basically like being a bookie a little bit and that's what Warren and I had in common insurance is a business of handicapping odds and Warren grew up at the racetrack he used to go as a kid and he as soon as he was old enough he bet on horses when he was really young he just got the Daily Racing for him and figured out handicapping so with insurance you're betting on will there be an earthquake will there be a hurricane and he would run little tests on me he would say you know we've got an offer to ensure the risk that the Olympics will be cancelled and da d d da what would you price that at and I would price it and then he would go yeah and you know we'd be off by a half a percent but usually I would come pretty close or we would you know we sort of understood the way each other thought about handicapping insurance so with the dice confronting me I started thinking about it the only way I knew how which is analytically and probabilistically and meanwhile he was saying to me you go first you go first and so I thought okay he wants me to go first obviously if you go first there must be something about it that makes you lose and so it I realized that there must be something about these dice that if you go first there it must be like the game rock paper scissors and and if you ever played rock paper scissors you know that the key is that you do it simultaneously but if you didn't and somebody had to pull out the the scissors or pull out the paper and then the other person could do whatever they wanted obviously whoever went second would always win right and so I refused to play and I told him that I wouldn't play unless he went first and that you know it must be like rock paper scissors and that was really an interesting moment because I it was the first time I realized realized that you know there was a psychology involved here in figuring this guy out whereas he thought of the world really numbers are his game and he's got thousands of numbers spinning around in his head all the time he told me that Bill Gates was one of only two people who've ever figured out the dice game the other one was um Saul kryy who's a noted philosopher and most people just look at the numbers and try and try and try to figure out the secret is that they're what's called non-transitive a non-transitive series of numbers which means that there's always one dice that can beat the other two so whoever goes first you can always pick one of the other two that will beat it and so essentially my theory was right but I had no idea of the underlying math that was my beginning of realizing that writing a book with Warren Buffett cooperating me was going to be like an extended series of these games where there would be testing going on and I would have to negotiate with him over various things and indeed that's that's the way it went so for the next uh 5 years I've worked with him I estimate that I spent about 2,000 hours with him which I don't think anyone's done it you know especially in such a compressed period of time I sat in his office I just watched him work a lot of the time I watched him on the phone um I went through his files uh he's got a huge collection of files so I had to kind of triage and figure out which ones do I really need I interviewed 250 PE people his family his friends his colleagues and I have about 300 hours of recorded interviews of time with him it was a really remarkable experience um one of the things that was um great about it is that I have oral histories captured from a lot of people that will never be captured again um I partly because of their age I use the Actuarial tables to um do my interviewing so I started with the people who are over 90 years old and then I worked my way down and and that proved to be very fortunate in the process of this I started um learning you know a lot of Warren stories and he told me about his first meeting with Bill um which was out in Bainbridge Island uh in uh here in Seattle at the gates family um compound actually was on the Hood Canal and I heard his version I heard Bill's version I heard the version of other people who were there I had to reconcile all these and it was a very interesting um experience in in research because one of the things I found is that you know when you hear different versions of stories they're not all the same and uh I did get a great picture of that of that evening from talking from to both Warren and Bill and other people who were there people said that you know it was really amazing because the two of them just you know clicked immediately and one guest gave me a photograph of the two of them which is in the book and I hope you'll see it and Bill looks about 14 years old and you know Warren looks like Warren and they're just shuffling along the beach with a SE plane behind them and you know yet there was this immediate spark of chemistry between the two of them because uh Warren who's immensely curious asked Bill about computers and IBM and was IBM going to be able to do well long-term as a business and if so why and if not why not and Bill started explaining and then Bill started asking Warren about the economics of the newspaper business and Warren started explaining this to Bill and the two of them just talked and talked and talked and talked and didn't pay any attention to anybody else and that night at dinner Bill senior had everybody go around the table and explain what was it that they thought had been the most important factor that contributed to their success and Warren said focus and Bill said the same thing and Warren has this saying that intensity is the price of excellence and I think that's a great um description of who he is as a person so I started hearing these story I started um putting pulling them together when we first worked on the book Warren told me whenever my version is different from somebody else's Alice used the less flattering version and there were times you know that I did have to do that um but occasionally I would hear stories that were just so funny and ridiculous that I just use them right out and one of them illustrates I think how uh Warren is as a person in relation to technology and I think it's a really great story about where we are today as people in the information age um Warren uh as you know doesn't use a computer other than to access the internet for news and to play bridge and when he first got a computer it was not because of Bill Bill tried to get him to get a computer he offered he said I'll send you the best looking girl at microsof to come install it in your house and and Warren said you've made me an offer I almost can't refuse but I will refuse it about a year later Warren's partner Sharon osberg who's also a friend of bills now um said you can play bridge on the computer and that got Warren to decide he would use a computer so so Sharon went out to Omaha and she said Warren up on the computer and that's that's what he uses it for and he uses it also as a little window on the world to get news but he doesn't use it um to store information and he doesn't use it for computation what Warren Buffett has done throughout his life is he's a lifelong learner his partner Charlie M calls him a learning machine starting at the age of no later than six he's read everything that he could find about business the subject that interests him he's read newspapers biographies trade press he went over to his grandfathers who was a grosser and he read the progressive grosser magazine and he read articles on how to stock a meat Department he's gone to visit every company that he could find that was even slightly interesting to him he went down to visit a barrel maker and spent hours talking about how to make barrels and he went um you know to American Express and he spent hours talking about that business and he went to Geico and he learned the insurance business he has stacks of reports on his desk from the companies he owns it's you know Pig stalls jewelry boat winches everything you can imagine and he reads hundreds of annual reports every year from companies that he doesn't own yet because he just wants to understand their businesses and when the opportunity arises then he's ready and he can make a decision and what he's really done is he's created this immense you know vertical filing cabinet in his brain of layers and layers and layers of files of information that he can draw back on now for more than 70 years worth of data and and and he's like a human computer he's he's wonderful with math he can recall phone numbers from his childhood and populations of cities from his childhood and he can do you know square roots in his head and he does present values and and um compound interest in his head so it's useful to also have that gift of math but the biggest thing he's done is to learn and create this cumulative base of knowledge in his head so one reason that he doesn't use a computer is that in effect in a sense he is one but he also needs a computer to get used he uses it for news he wants to know what's going on in the world so he is on the internet a lot to get um news reports and he's up at late at night you know seeing what's going on he just doesn't use it as a filing cabinet or for computation in the mid 1990s um Bill uh had him and his partner Charlie M come up here to Microsoft and neither one of them used computers and so the the purpose of this was to for them to come sort of like cavemen for you all to study to understand um the kind of people who are smart and successful in life who don't use computers and what kind of applications might interest them and you know what is the difference between someone who doesn't need and doesn't use a computer and someone who does and what you know what could be learn and the night before Bill and Melinda had a dinner party at their house this is just kind of an aside but um Nathan mirval was there and he was seated at a table with Charlie Munger who is Warren's partner who is um somewhat of a science buff and they got into a conversation about uh naked mole rats does anybody know what a naked mole rat is you do okay so a naked mole rat is a is a is an animal that doesn't feel pain because it lacks a neuropeptide and so it's used in experimentation because it can be scraped or cut and burned without without feeling you know anything and so they and it also reproduces parthenogenic it has there's a queen and she reproduces without the assistance of any male and so they had this lengthy conversation at the dinner table about the sex life of naked mole rats and the rest of the people sat stupified just listening to this for something uh like half an hour or an hour while the conversation revolved around this so these are this this is Charlie Munger so you should know that that's what he's like so he comes trotting down here with Warren the next day and they sat and they tried to explain why it was that they don't use computers but the truth is that they are people who are very dependent on information and knowledge they just are lucky because they have great memories and they have the habit of lifetime learning and a lot of what the snowball is about is the concept of learning and creating and the advantage of having the information and knowing it and so when I came here today one of the things I was thinking about is that what you do is so much at the intersection because retrieving information and is different from having it already in your head and the inter the internet is wonderful for being able to retrieve and get information but what you do is different you work on manipulating it how you use the information and you know in effect waren Buffett and Charlie M have the files in their head so that's why they aren't really out there you know Googling all the time looking for trying to look stuff up because they already know it but there are applications that somebody who doesn't have their prodigious memory and their computational power would would need in order to be as successful as them so sometimes when they say well we don't use computers you know an ordinary person can't be them and I think a lot of the work that you do here is helpful to the ordinary person but a waren buffet a M don't need it at the same time you know the lesson that they have which is that learning yourself making yourself a smart as you can is extremely valid and not just relying on a library where you can look something up all the time because a lot of times when you need to make a decision and you need 50 pieces of information you need to know it then and that's been one of Warren Buffett's greatest secrets of success so with that I would like to just um give a little thought from a poet David White who talked about um something that he thought was heretical he spoke of the age of information and he said that this is not the age of information he said this is not the age of information forget the television forget the radio forget the buzzing screen this is a time of Loaves and Fishes people are hungry and one good word is food for a thousand so I would love to take any questions that you have um yes do you learn from what did I learn from Warren um you know there's a lot about the business of Berkshire Hathaway in there but I I learned a lot of life lessons and I try to give the reader that same experience because spending all that time with him had a very profound effect on me uh he's very successful I called the book The Business of Life war in buffed in the business of life because I thought that that was really the right way to describe the experience that I had he uses his business concepts interchangeably with the way that he lives so when he thinks of compounding and the time value of money he thinks time the same way he once said to me you know if you want to go on that round the world trip you know it's going to be more valuable to you when you're 40 then when you're 70 but when you're 20 you know delay gratification is a great idea you should be working really hard because your time is going to be more valuable to you when you're 40 than when you're 20 now that's kind of a mathematical concept that I would never have thought of but that's that's how he thinks I learned a lot from him about how to manage your time because this this is somebody who doesn't have meetings and he has arranged it so that when he needs to make a decision and this has to do with the information that I was just talking about he everybody brings him what he needs to make a decision or he already knows it so that he looks at something once he decides and that's it if there's a business deal it's a company that he wants to buy then he has a price he knows the value he knows all the financial parameters of the business and people don't come to him say well we have this idea we think you might like to invest in it and you know the buyer might be interested in something around the range of blah blah and then he says well what about this what about that and they go back and answer questions and there's a pingpong of questions and answers he does not do that you know if you don't bring him everything then he just says you know he won't even talk to you and that kind of um preparation of putting somebody else in charge of getting of being responsible you know is has been a tremendous time saer and efficiency tool for him he has incredible boundaries over what his is his job and what is everybody else's job and I saw that in action over and over again another thing is that he's an incredible negotiator and I mentioned at the beginning that writing this book was to some extent an extended series of negotiations and some tests and in the book I revealed some of his negotiation techniques which um honed me into a much better negotiator by the time I was finished with this project um they given them little names like the circular saw or buffeting so if you read the book you'll hopefully pick up on some of that and lastly uh he has a great way of dealing with people he has terrific relationships with his friends he has a lot of loyalty from people uh he has rules he doesn't criticize anybody if he's friends with someone he will never to their face or behind their back ever say a word about them that's negative he also knows how to sort people into piles of you know stay away from people that he wants really close to him and people that are you know in the middle kind of okay but arms length and he is excellent at managing his relationships with people I think the book um has a lot of these lessons in it that are useful hopefully okay questions yes um the snowball is a reference to compounding um which is the piling up of the money it's from a saying of wars that life is like a snowball and the most important thing is wet snow and a really long hill and he's talking again about the business of life not just the money um although his money is his snowball it's also the relationships with people he collects people he has built up this incredible snowball of knowledge and learning over the years and it's about how you can purposely Focus your snowball because the wet snow is where you place your focus which again he attributes as his critical factor of success and the Long Hill is about getting started early you know not delaying going on that round the world trip now and not waiting till you're 70 yes yeah how has the internet changed um Warren used to have a deal with the Wall Street Journal in Omaha where he would get the next day's paper dropped off at his house the night before and he would wait up for it and read it because he's so hungry for information and the internet has given him the ability to find things out so much faster because he is a news just he just you know is inhaling news he loves politics he business news you know and he's somebody who you know is not he doesn't trade the market as you know he's not a concentrator but he always wants to know what's going on so the internet has just given an ability to get information at a much faster I mean he loves it you know he also likes um Google Alerts yeah yes relationship with Charlie merer um when they first met in um the in 1959 uh Charlie merer is older than Warren he was a lawyer their personalities are very similar um they're both very rational um they both um talked constantly about investing they talked on the phone you know practically every night they drove their wives crazy eventually it got to the point where they had um internalized each other's point of view so now you know they talk periodically but they really don't there's kind of this myth that you know Warren and Charlie are on the phone every day making decisions together and I'm ask a lot you know who are Warren's advisers Warren's advisor is his mirror you know Warren does not have advisors he says when I get up in the morning I look in the mirror and at that point pretty much everybody's had their say so he so he and Charlie do talk but they talk as much for fun as um or just to entertain each other or inform each other about what they're doing but they're not really jointly making decisions Warren doesn't make joint decisions yeah yeah unconventional unconventional well I what I would say is that he's unconventional in both you know he he left Wall Street he worked for Benjamin Graham the dean of Wall Street he went back to Omaha and worked for himself in his back bathrobe in his study off his bedroom and staying up all night at a time when to make money on Wall Street it was inconceivable that you would work anywhere outside New York that to be a money manager it was unheard of that you would work for yourself to start an investment partnership on your own where you know and where Communications were by telephone and a longdistance call a cost of Fortune and where stock prices came to you in the mail in the pink sheets where you pasted 40 postage stamps and they came once a week to have the confidence to think that you could become become really rich that he was he is a total non-conformist in both his business and personal life but when he has an opinion about something he's very consistent and even rigid and he doesn't change it and so that may account for the fact that he was married remained married and even when his wife moved to San Francisco he never got divorced you know his when he forms a relationship with someone it it almost i c you can almost never think of an example where it's ever ended yes um he cites three mistakes uh one the biggest and earliest was investing in a gas station when he was in college and uh he didn't understand the power of Customer Loyalty at that time um there was no Monopoly there was a Texico station across the street and he bought into a Sinclair station it's a commodity business you know and he thought well you know um people will just pull in if they're headed this way and if they're headed that way they'll pull in across the street and in fact the guy across the street had this very loyal customer base today it probably wouldn't H work that way because you know but he really um he l $2,000 it was u a quarter of his net worth and it was that was devastating it would be worth billions of dollars to him today he bought a company called Dexter Sho for Brooker halfway okay this is a good one he made a bet that people would lose their interest in buying imported shoes the Warren has a long history which I trace in the book of fashion disasters so he got into retailing just you know why I canot you know he's every time he's kind of gone anywhere near anything clothing related it's been not it you know with one exception it hasn't worked out too well Dexter was a disaster and then us a he did a preferred stock deal with US Air and they got out by the skin or their teeth it was bad though it was bad and he you know he says you know if somebody had been at Kittyhawk you know they should have shot you know Orville down you know because you know the airplane has been an incredible Innovation but there has not been one dime ever made by anyone who's invested in the in in aggregate in the airline business ever in history and the same is probably true for automobiles you know I mean we see what's happening with GM and Ford and Chrysler but you know the total net money that's been invested in those businesses which were complete novel Technologies at the time you know Great Inventions changed the world nobody made money what the Insight that we had the you know obviously lots of trans well you know his main Insight is if you go back to the railroads in the beginning of the Industrial Age there's usually a flood of new capital and a million new businesses anytime there's a a world changing technology and then there's this big ShakeOut and so what ends up happening is that you know you have a lot of people chasing an opportunity and there's more Capital than there is you know and eventually you know there is an opportunity but often those businesses are some kind of um you know business where for whatever reason and the case of Airlines it it was regulation deregulation they're they're often very Capital intensive you know automobiles they often have Labor issues but those aren't seen at the beginning at the beginning what's seen is the technology and so there's huge wash of Capital goes in and it there you can't get enough return on it because there's not enough revenues um also he said to me that only women should be allowed to run Airlines um because and only women should be allowed to run sports franchises or own them because the prices would be a tenth of what they sell for um because it's testosterone that actually determines the prices of these things so yes why do Warren donate to The Gates Foundation he has struggled with the issue of what to do with this money uh because there's never been such a huge pool of wealth um you know until the Gates has came along and um never been one quite so big as ons and he's always said after he died uh he would give it to the Buffett foundation and his wife would take care of it Susan and he always assumed that he would die first and you know no one ever said that Susan Buffett was the most brilliant philanthropist or that she had the most training or anything like that and and he never represented that but he had this trust in her based on Decades of experience with her and her intentions and he felt that she would be a good Steward for the money and also psychologically he was just frankly that didn't want to deal with the question when she died in 2004 that changed everything he had to um overturn that assumption and he had already been thinking about this issue but he began to really reexamined whether it made sense to give some of the money away before he died and he had been studying The Gates Foundation since its Inception and he felt um that Bill and Melinda not only were the smartest philanthropist he knew just in terms of sheer intelligence but the amount of work they put into the study and again it's learning I mean he felt that philanthropy is a job it's a really hard job it's harder to change the world than it is to make money a lot of people make money but few people changed the world and he felt that they had a better shot at it than anybody else he agrees with their philosophy that every life has equal value Warren really is egalitarian and that's very important to him and he also um saw that they had the infrastructure to give away billion billions of dollars at a time which no one had ever successfully done in the history of philanthropy whereas if the money stayed in the Bea Foundation they'd have to create this enormous infrastructure and then risk that they wouldn't be able to do it so he trust a Bill and Melinda to do the right job if he wasn't there he trusted their intentions you know there's a history of donors intentions being overturned after they're gone and he knows Bill and Melinda would never do that to him so it's trust yes well what Ma Warren's management philosophy his friend Tom Murphy says that Warren delegates to the point of abdication and I can personally attest to that you know working there alongside him in headquarters you know the way that it's run is um that there are a few people there because they're literally you know he can't just be there by himself although if he could I think he would but everything is outsourced to somewhere so you know it's not that burshire hathway doesn't have legal services but they're outsourced it's not that they don't have internal audit but it's outsourced it's not that they don't have um Human Resources but it's all pushed down to the subsidiaries it's not that they don't well there are some things they don't have they don't have a public relations department they do have a public relations department its name is Warren Buffett um so there are certain things that would definitely have to change um when he's not there and for example there will probably have to be an investor relations person because he is the investor relationsship person now but there are other functions that are there they're just not located at headquarters they've been pushed down to the subsidiaries or they're outsourc yes oh I'm sorry you you had another question what's daylight what's his daylight okay do you guys want to hear what is daylight is like okay this is this is part of the whole um information age thing it's so interesting he comes in in the morning he has a stack of newspapers a stack of trade press he reads uh he comes in at 8:30 he spends about the first two hours reading um and then he answers phone calls and then he goes home at 5:30 he he occasionally you know most of the time several times a week he'll have visitors people come in to see him and he'll sit down he'll spend an hour with somebody maybe he'll take them to the lunch he has college students that come in you know he gives advice people call him in desperation because their companies failing and then he tells them whether or not he's going to give the money or not yeah how like make decision our so how does he for an investment or how to spend time on something whether something's worthwhile whether something's worthwhile um well you know he decided a long time ago that things that are enduring are where he wants to spend his time and things that are cumulative so if he's going to learn something then it's something that he thinks will still be worth knowing in 20 years or 30 years so he and it's something that he's going to still be interested in so you know Warren is not the kind of person who is going to be this year interested in water polo and next year interested in knitting and so he doesn't his attention doesn't flit around now that that's largely his personality and so he would say explore you know to figure out what you're interested in but also you know he's interested in Bridge so he learns more and more and more about it over time but he doesn't start on it until he's really sure he's interested in it um he knows himself so he knows he likes things that are you know mentally require mental agility mathematical you know that's what he tends to do with people he has um thought through and this has taken him time but he's thought through how to figure out what kind of people he likes and he scream for honesty and selfishness first of all and there's and chemistry obviously but you know he has a way of figuring out if somebody is fundamentally dishonest impulsively honest or honest when somebody's watching which is what a lot of people are and he likes to be surrounded by people who are compulsively honest that's just what he likes and he likes to be surrounded by people who are compulsively unselfish um and people who are unselfish when somebody's watching them he's happy to be friends with those people but he just doesn't put them in a position where he has to be in the room with them you know and he's very good at just he's spent a lot of time studying so that's how he figures out and then when he when he meets people he spends you know from minutes to an hour figuring out and if he screens these rare people that fit into this category boom he focuses on them and that's how he figures it out and there's and there's a chemistry to it he looks for people who are protective because that's what he needs he knows himself that's it he knows himself yeah unselfish not unselfish what is it well unselfish towards him and you know he is figured out the kind of PE he says you know I um don't want to be with people who keep score in relationships where if you ask them for a favor the first thing that pops into their head is am I going to get something for this so and and you can use that you know you can say you can think of everybody in your life and you can think you know if I was in this room and broke my leg and I said would you help me you know get home tonight I mean there are people who would say well you know I you know I got a lot to do you know you know and there are people who would just say yes absolutely and they wouldn't be thinking about anything but that you needed help right that's a pretty easy cut to make you know and the CEO who's thinking about making profit for his shareholders still might get you home because you know he's personally generous see the difference Rel yes yes both presidential candidates mentioned him as a possible future Secretary of Treasury could you see him taking on that of Ro Treasury AR Warren Buffett is not going to happen um yeah he first of all he loves running ver hway and nothing's going to take him away from that and also you know I described his daily routine and somebody who had is a treasury secretary their schedule is filled from morning till night with meetings that are arranged for them by somebody else W just does not do meetings he would never let his schedule be handled by somebody that way it would just never happen out yes and you know he loves to give advice when asked and he answers the phone and he already is giving advice so that's how he likes to help it leverages his time another thing time management you know he does not give advice unless ask and that's a great way to manage your time you know it is because then people do ask but they only ask when they really you know so yes in the corner Does He travel abroad um reluctantly yes China well that's a great question how does he invest internationally because he was you know he had really not done much International investing at all and then when I started working on this book was when he was really starting to expand in that area and he has what he calls a circle of confidence which is what you know about what you what you're capable of doing and he believes that if you don't know more than the next guy you should not really be trying to invest because and that there's this this idea that he doesn't invest in technology because he doesn't understand it that's not true he he actually understands technology perfectly well he just doesn't understand as well as you guys do and he's not going to go into the casino and bet against you and that's pretty smart so he also you know likes things that don't obsess when he's looking internationally what he's been doing is he's had this you know he understands every business thing there is to know about everything in the US he's gradually been expanding that to other countries he does the same thing that he does in the US which is that he reads extensively he studies and he's gradually built up those layers of mental file cabinets so that he started to get more comfortable investing outside the US when I was working working with him on this book he started um investing in Korea and that was really fascinating and I actually wrote about it in the book because you know he saw that the Korean economy had been in trouble um years ago and that it had improved and the Improvement took place over some number of years he read about that in the newspaper so he was looking for something to do so he just checked stock valuations in Korea and found there were stocks trading at pees of three and two and five and yet the economy was fine so he said well I think I'll just figure this out so he got um one of the brokerage firms to get him this book of Korean stocks and he went through it just like the old Moody's manuals but he realized that he didn't understand Korean accounting and he needed to because it's different from the US and he wanted to make sure the numbers you know he understood them so he got another book and he taught himself Korean accounting principles and he learned everything there was to know about um all of these Korean companies and he called through and he read about thousands of Korean companies and called the list down to about 20 and then he figured out how to set up a brokerage account in Korea which if you've ever I mean you probably haveen it's incredibly difficult to do if you are a US citizen and in fact you really can't do it he had to have help um to I mean Warren Buffett can do it but you or I really you know it it's not easy and he ended up buying a whole bunch of Korean stocks and making a ton of money on them these were personal Investments and so that's kind of his you know and right now I guarantee you there's something else he's probably looking well actually what he's doing right now is all stuff related to the financial crisis but internationally it's the same thing he's just looking at what's out there that nobody else is noticing reading and studying okay one more who hasn't asked one you green how does he prioritize um well he he set his priorities a long time ago um you know the shareholders of bercher hathway are his number one priority and fortunately he loves business more than anything and you know that's caused some problems in his life because it caused some problems with his family they were not his number one priority but at the same time it's made it's made him really happy and it's made him really rich and I think that um you know one of the lessons of this book is that you know that kind of intense Focus that made him worth 58 billion required you know he's made it look easy but it was it wasn't easy it took you know incredible Focus over a long period of time so I think a lot of people can get richer make their lives better you know but they might not want to do it quite the way he did it because in terms of priorities you know they might not want to prioritize is quite the way he did because there were sacrifices involved no on this side okay let's do another one over here I'm sorry I thought I did okay you no yeah um one of his friends said to me that Warren um is the master of the art of the win-win but he never does anything that isn't a win for him anything so yes he's very good at coming up with Creative Solutions to any kind of problem that helped both people win but no matter what the outcome is whether the other person you know he he will he will win um yeah he did these weight deals with his kids um where he would incentivize them financially to lose weight but you know he would still win you know whether they lost weight or didn't lose weight you know he would win he would either make money or save money or one way or another he won yeah yeah did he play first did he play first no I refused to play so we stopped the game yeah in the back you consider him a gamer all warrren is not a gambler he's a handicap and that's a really important distinction a a handicapper so he would rather be the casino you know in the back yes his biggest regret is um what he did that caused his wife Susan to moved to San Francisco in 1977 which was to be so focused on the business um because he thought it was preventable yeah influen yeah his father um who he was totally devoted to and uh his wife Susie were the other two big ones oh books yeah I mentioned a lot of books that were important to him in the book so yeah okay yes she's gonna Kim's gonna drag me away yeah yeah if he wants to if he thinks he can learn it but he puts something in a pile that's just too tough is he gonna get a Kindle is he gonna get a Kindle you know I he loves to he loves to read and I you know I don't know if he's going to get a Kindle because he just likes to read I mean I don't think he needs a yeah yeah okay so you know what show you guys how much we can talk about I don't know 900 pages in that book a lot of research so she obviously wonderful stor so come up and ask questions have Al sign your book than for com every I'll turn the mic off