Charlie Munger

keep our families safe and take a good job for our investors and so on. We had similar attitudes. Yeah. Did it change over the decades? No. Warren still cares more about the safety of his personal shelters than he cares about anything else. If we used a little bit more leverage throughout, we'd have three times as much now. And it wouldn't have been that much more risk either.

keep our families safe and take a good job for our investors and so on. We had similar attitudes. Yeah. Did it change over the decades? No. Warren still cares more about the safety of his personal shelters than he cares about anything else. If we used a little bit more leverage throughout, we'd have three times as much now. And it wouldn't have been that much more risk either.

And we just never wanted to give them at least a chance of screwing up our basic shelter position.

And we just never wanted to give them at least a chance of screwing up our basic shelter position.

No, I think it would have worked fine. Does Warren think that? Very easy. The situation lends itself to, if you were intelligent, just milking it out.

No, I think it would have worked fine. Does Warren think that? Very easy. The situation lends itself to, if you were intelligent, just milking it out.

It's automatically leveraged. You open a new store with no capital, of course it's leveraged. Who wouldn't want a business with no inventories?

It's automatically leveraged. You open a new store with no capital, of course it's leveraged. Who wouldn't want a business with no inventories?

A lot of people now do it who manufacture something that is terribly strong, and they're just forcing the suppliers to carry all the inventory.

A lot of people now do it who manufacture something that is terribly strong, and they're just forcing the suppliers to carry all the inventory.

It helps if you like one another and enjoy working together. We do. Yeah. But I don't use any one formula. A lot of partnerships that work well for a long time happen because one's good at one thing and one's good at another. They just naturally divide it. And each one likes what he's doing.

It helps if you like one another and enjoy working together. We do. Yeah. But I don't use any one formula. A lot of partnerships that work well for a long time happen because one's good at one thing and one's good at another. They just naturally divide it. And each one likes what he's doing.

Now, in Costco's case, they had Jeff Brotman, who's very smart, but not a retailer, and Jim Senegal, and they divided it up. And they had originally agreed that Brotman would be the chairman and CEO, because he was his ID, he founded the whole thing. But Senegal decided, no, I have to be the CEO. So it was a big, unfortunate board meeting, a big internal struggle. And Brotman moved aside.

Now, in Costco's case, they had Jeff Brotman, who's very smart, but not a retailer, and Jim Senegal, and they divided it up. And they had originally agreed that Brotman would be the chairman and CEO, because he was his ID, he founded the whole thing. But Senegal decided, no, I have to be the CEO. So it was a big, unfortunate board meeting, a big internal struggle. And Brotman moved aside.

Was that after you joined the board?

Was that after you joined the board?

But Warren has very close relations with all those people that have lunch every Saturday at Berkshire headquarters. It isn't like he doesn't have a little quarter of people there who are kind of pals from the ground up.

But Warren has very close relations with all those people that have lunch every Saturday at Berkshire headquarters. It isn't like he doesn't have a little quarter of people there who are kind of pals from the ground up.

Well, of course, we used to spend a lot of time together when we were young because we didn't have that much to do. Now we've got more to do, but then it's just the other minutiae of life. So it's different.

Well, of course, we used to spend a lot of time together when we were young because we didn't have that much to do. Now we've got more to do, but then it's just the other minutiae of life. So it's different.

It's very difficult to invest money well. And I think it's almost impossible to do time after time after time in venture capital. Yeah, we really wanted to ask your thoughts on venture capital. Sometimes all the deals get so hot and you have to decide so quickly. You're all just sort of gambling.

It's very difficult to invest money well. And I think it's almost impossible to do time after time after time in venture capital. Yeah, we really wanted to ask your thoughts on venture capital. Sometimes all the deals get so hot and you have to decide so quickly. You're all just sort of gambling.

Well, of course it's good for the world as a whole to have a way of having some currency. The way that was solved is... For a long time, the British pound was the national currency of the investment world. Then it shifted to the dollar, and it's still the dollar. And people like China have these enormous reserves of dollars.

Well, of course it's good for the world as a whole to have a way of having some currency. The way that was solved is... For a long time, the British pound was the national currency of the investment world. Then it shifted to the dollar, and it's still the dollar. And people like China have these enormous reserves of dollars.

The money we make, think of the money people give us where we always just print up these pieces of paper.

The money we make, think of the money people give us where we always just print up these pieces of paper.

Well, they do if they ever get any money. The dollar is very fungible. You can always buy one anywhere.

Well, they do if they ever get any money. The dollar is very fungible. You can always buy one anywhere.

Well, I think it's a very legitimate business if you do it right. If you want to give the right people the power and nurture them, help them. You know a lot about the tricks of the game, so you can help them run their business, yet not interfere with them so much they hate you.

Well, I think it's a very legitimate business if you do it right. If you want to give the right people the power and nurture them, help them. You know a lot about the tricks of the game, so you can help them run their business, yet not interfere with them so much they hate you.

By and large, having bumped into a lot of people in the businesses with venture capital financing, I would say the ordinary rule is that people in the business doing the work, they more or not, they hate the venture capitalists. They don't feel they're their partner trying to help them. They're only taking care of themselves and so on and so on. And they don't like them.

By and large, having bumped into a lot of people in the businesses with venture capital financing, I would say the ordinary rule is that people in the business doing the work, they more or not, they hate the venture capitalists. They don't feel they're their partner trying to help them. They're only taking care of themselves and so on and so on. And they don't like them.

Yeah, well, but that's not true in Berkshire. You see, they know we're not trying to discard them to the highest bid. See, if someone has an old investment bank or offers us 20 times earnings or some lousy business, we don't sell. If it's a problem business we've never been able to fix, we'll sell it. But if it's a halfway decent business, we never sell anything.

Yeah, well, but that's not true in Berkshire. You see, they know we're not trying to discard them to the highest bid. See, if someone has an old investment bank or offers us 20 times earnings or some lousy business, we don't sell. If it's a problem business we've never been able to fix, we'll sell it. But if it's a halfway decent business, we never sell anything.

And that gives us this reputation of staying with things, which helps us.

And that gives us this reputation of staying with things, which helps us.

Well, it's rare, you see. Everybody else has a standard way of doing things. The lawyers have their standard forms. And everybody just has the same standard form. And they get the same standard results, subject to the vicissitudes of investment life, you don't want to make money by screwing your investors. And that's what a lot of venture capitals do.

Well, it's rare, you see. Everybody else has a standard way of doing things. The lawyers have their standard forms. And everybody just has the same standard form. And they get the same standard results, subject to the vicissitudes of investment life, you don't want to make money by screwing your investors. And that's what a lot of venture capitals do.

The world is full of XG, Goldman Sachs partners that formed a private fund. And they manage a billion dollars or something like that. And they charge two points off the top plus this. And that enables them to make very handsome livings themselves. But the endowments are not getting a good return.

The world is full of XG, Goldman Sachs partners that formed a private fund. And they manage a billion dollars or something like that. And they charge two points off the top plus this. And that enables them to make very handsome livings themselves. But the endowments are not getting a good return.

It's just the way it works. And of course, you really shouldn't be in the business of charging extra. You really are going to achieve very unusual results. And of course, it's more easy to pretend that you can get good results than it is to actually get them. And so it attracts the wrong people. People in investment capital turn their mind.

It's just the way it works. And of course, you really shouldn't be in the business of charging extra. You really are going to achieve very unusual results. And of course, it's more easy to pretend that you can get good results than it is to actually get them. And so it attracts the wrong people. People in investment capital turn their mind.

And the people who make the most money out of venture capital are a lot like investment bankers, deciding which hot new area they're going to get in. They're not great investors or great at anything.

And the people who make the most money out of venture capital are a lot like investment bankers, deciding which hot new area they're going to get in. They're not great investors or great at anything.

Well, they're starting to do it. The endowments have started to say to all these people that charge $3.30 or whatever they charge, they said, we'll pay your $3.30, but we're going to put in twice as much money, and then the next half you'll get nothing on it. You're just going to ride Perry Passu on some of your investments. So the fees go down by 50%. That'll take a lot of the fun out of it.

Well, they're starting to do it. The endowments have started to say to all these people that charge $3.30 or whatever they charge, they said, we'll pay your $3.30, but we're going to put in twice as much money, and then the next half you'll get nothing on it. You're just going to ride Perry Passu on some of your investments. So the fees go down by 50%. That'll take a lot of the fun out of it.

Fees down 50%. And that's happening all over America. They feel had, misled, irritated. They've looked foolish to their own trustees.

Fees down 50%. And that's happening all over America. They feel had, misled, irritated. They've looked foolish to their own trustees.

There'll be somebody who'll find a new thing, but it gets harder and harder. I would argue one of the easiest ones was when they decided a little group around Home Depot, they would copy the Costco model and home improvements. And that was basically a good idea. And think of the money they made doing it. Yeah.

There'll be somebody who'll find a new thing, but it gets harder and harder. I would argue one of the easiest ones was when they decided a little group around Home Depot, they would copy the Costco model and home improvements. And that was basically a good idea. And think of the money they made doing it. Yeah.

Yeah.

Yeah.

Well, there was another one at Costco. Floor and Decor is the current imitator. And it's just this in vinyl, wood imitating vinyl flooring. They're running a Costco model. And they keep adding miscellaneous stuff to it, too.

Well, there was another one at Costco. Floor and Decor is the current imitator. And it's just this in vinyl, wood imitating vinyl flooring. They're running a Costco model. And they keep adding miscellaneous stuff to it, too.

Well, it would be simpler if it was all floor.

Well, it would be simpler if it was all floor.

Home Depot was the same. They copied everything.

Home Depot was the same. They copied everything.

Yeah, they came out, they copied everything.

Yeah, they came out, they copied everything.

How did Jim and you feel about that? Saul was not a crazy guy. He was domineering and so on. But he was also very intelligent.

How did Jim and you feel about that? Saul was not a crazy guy. He was domineering and so on. But he was also very intelligent.

But there aren't many opportunities like Home Depot and Costco. There aren't very many.

But there aren't many opportunities like Home Depot and Costco. There aren't very many.

They were too wedded by the ideas they already had. That's everybody's trouble. You just can't accept a new idea because the place is occupied by an old idea. They got in the habit of getting their real estate practically even nothing because they went into little towns where nothing was valuable. So always their occupancy costs were like zero, and they knew how to make big division stores.

They were too wedded by the ideas they already had. That's everybody's trouble. You just can't accept a new idea because the place is occupied by an old idea. They got in the habit of getting their real estate practically even nothing because they went into little towns where nothing was valuable. So always their occupancy costs were like zero, and they knew how to make big division stores.

That was their formula. So it offended them to go against the rich suburbs and have to pay up for the good locations, and Costco just specialized in the good locations where the rich people lived. And Walmart just let them do it year after year. It was a terrible mistake.

That was their formula. So it offended them to go against the rich suburbs and have to pay up for the good locations, and Costco just specialized in the good locations where the rich people lived. And Walmart just let them do it year after year. It was a terrible mistake.

No, never met him. I knew the son, one of the sons, and they divided it up, you know, in about six parts very early. Yeah, Walton Enterprises. So they never paid much gift taxes or anything.

No, never met him. I knew the son, one of the sons, and they divided it up, you know, in about six parts very early. Yeah, Walton Enterprises. So they never paid much gift taxes or anything.

Look how hard it would be to go into the auto business and have some big killing company. Who's going to win? Who knows? The whole thing has been thrown way up in the air by all these electric cars. All those big new capital requirements, different ways of selling cars. And plus they got these tough unions. See, I just don't even look at the auto industry.

Look how hard it would be to go into the auto business and have some big killing company. Who's going to win? Who knows? The whole thing has been thrown way up in the air by all these electric cars. All those big new capital requirements, different ways of selling cars. And plus they got these tough unions. See, I just don't even look at the auto industry.

Well, for maybe for one or two years, electric cars that are really good at it. Maybe, but certainly nobody else. It's too tough. BYD was a miracle. But that guy works 70 hours a week and has a very high IQ. He can do things you can't do. You can look at somebody else's auto part and he can figure out how to make the goddamn thing. You can't do that, you see.

Well, for maybe for one or two years, electric cars that are really good at it. Maybe, but certainly nobody else. It's too tough. BYD was a miracle. But that guy works 70 hours a week and has a very high IQ. He can do things you can't do. You can look at somebody else's auto part and he can figure out how to make the goddamn thing. You can't do that, you see.

Yes, but they're clever too. How was that investment for you? I lost money. Not much because I was stubborn. I held out until I got back to almost what I paid for it when I was older.

Yes, but they're clever too. How was that investment for you? I lost money. Not much because I was stubborn. I held out until I got back to almost what I paid for it when I was older.

Well, but that is a no-brainer. Something like that, if you're as smart as Warren Buffett, maybe two, three times a century, you get an idea like that. The interest rates in Japan were half a percent per year for 10 years. And these trading companies were really entrenched old companies. and they had all these cheap copper mines and rubber plantations.

Well, but that is a no-brainer. Something like that, if you're as smart as Warren Buffett, maybe two, three times a century, you get an idea like that. The interest rates in Japan were half a percent per year for 10 years. And these trading companies were really entrenched old companies. and they had all these cheap copper mines and rubber plantations.

And so you could borrow for 10 years ahead all the money and you could buy the stocks and the stocks made 5% dividends. So there's a huge flow of cash With no investment, no thought, no anything. How often do you do that? You'll be lucky if you get one or two a century. We could do that. Nobody else could. It looked attractive at half or a century. You couldn't get it.

And so you could borrow for 10 years ahead all the money and you could buy the stocks and the stocks made 5% dividends. So there's a huge flow of cash With no investment, no thought, no anything. How often do you do that? You'll be lucky if you get one or two a century. We could do that. Nobody else could. It looked attractive at half or a century. You couldn't get it.

But Berkshire with its credit could. And the only way you could get it was to be very patient and just pick away at it little pieces at a time. It took forever to get $10 million invested. But it was like having God just opening a... chest and just pouring money into it. It was awfully easy money.

But Berkshire with its credit could. And the only way you could get it was to be very patient and just pick away at it little pieces at a time. It took forever to get $10 million invested. But it was like having God just opening a... chest and just pouring money into it. It was awfully easy money.

That's true. But why shouldn't it be hard to make money? Why should it be easy?

That's true. But why shouldn't it be hard to make money? Why should it be easy?

That's a very different company. Yeah. Did you ever look at it? That's a style company. Of course, I've looked at it, but I don't like style comedies.

That's a very different company. Yeah. Did you ever look at it? That's a style company. Of course, I've looked at it, but I don't like style comedies.

Well, I suppose if it were to be Hermes, an achievement on a price, I'd buy it. But short of that, I'm going to buy a new style of company.

Well, I suppose if it were to be Hermes, an achievement on a price, I'd buy it. But short of that, I'm going to buy a new style of company.

Well, if you're as good as they are, what they've done, you have a lifetime to do it in. Every now and then, three or four lifetimes to do it in. You can create another, but it's not easy.

Well, if you're as good as they are, what they've done, you have a lifetime to do it in. Every now and then, three or four lifetimes to do it in. You can create another, but it's not easy.

It's not a bit easy. They have meetings every day where they make policy decisions. They choose the locations one at a time. It's work.

It's not a bit easy. They have meetings every day where they make policy decisions. They choose the locations one at a time. It's work.

Well, they just got a brand people trust so much. It took them a century to do it.

Well, they just got a brand people trust so much. It took them a century to do it.

Kirkland is a brand the way Tide is a brand. And Hermes is a different kind of a brand.

Kirkland is a brand the way Tide is a brand. And Hermes is a different kind of a brand.

Well, it's hard for us not to love brands since we were lucky enough to buy the See's candy for $20 million as our first acquisition. And we found out fairly quickly that we could raise the price every year by 10% and nobody cared. We didn't make the volumes go up or anything like that. Just made the profits go up. So we've been raising the price by 10% a year for all these 40 years or so.

Well, it's hard for us not to love brands since we were lucky enough to buy the See's candy for $20 million as our first acquisition. And we found out fairly quickly that we could raise the price every year by 10% and nobody cared. We didn't make the volumes go up or anything like that. Just made the profits go up. So we've been raising the price by 10% a year for all these 40 years or so.

And it's been a very satisfactory company. We didn't require any new capital. That's what was so good about it. Very little new capital. We had two big kitchens and a bunch of rental stores when we bought it. Now it's got two big kitchens and a bunch of rental stores. Well... Charlie was a playboy. And his brother ran the company, his older brother, and dominated it completely.

And it's been a very satisfactory company. We didn't require any new capital. That's what was so good about it. Very little new capital. We had two big kitchens and a bunch of rental stores when we bought it. Now it's got two big kitchens and a bunch of rental stores. Well... Charlie was a playboy. And his brother ran the company, his older brother, and dominated it completely.

But when he died, Charlie made his brother his executor. And now he needs a lot of money to pay death taxes. He doesn't have it. And it's due, you know, eight months or something later. And so they really wanted to sell so they could pay the death taxes. And Steve was only making $4 million pre-tax when we bought it.

But when he died, Charlie made his brother his executor. And now he needs a lot of money to pay death taxes. He doesn't have it. And it's due, you know, eight months or something later. And so they really wanted to sell so they could pay the death taxes. And Steve was only making $4 million pre-tax when we bought it.

We only found out about it because Charlie C. was on his cruise to Hawaii or something with this guy who was a client of an investment counselor who also worked for Blue Chip Stamps, which is the company that bought it. And at any rate, that's how we found out about it. We paid that guy a finer fee. We've never paid one cent. He always says that it was worth it.

We only found out about it because Charlie C. was on his cruise to Hawaii or something with this guy who was a client of an investment counselor who also worked for Blue Chip Stamps, which is the company that bought it. And at any rate, that's how we found out about it. We paid that guy a finer fee. We've never paid one cent. He always says that it was worth it.

Of course, but you don't want to have a reputation for paying finer fees. Everybody in the world will be bothering you all day long.

Of course, but you don't want to have a reputation for paying finer fees. Everybody in the world will be bothering you all day long.

I think your chances of buying one of them is so low I wouldn't even look. I don't even believe in looking at things that I might find. You're not going to get a chance to buy Hermes. No curiosity without a return. Yeah, yeah, yeah.

I think your chances of buying one of them is so low I wouldn't even look. I don't even believe in looking at things that I might find. You're not going to get a chance to buy Hermes. No curiosity without a return. Yeah, yeah, yeah.

There are a lot of professional investors that buy nothing but branded goods. The one they usually start with is Nestle. They've done two or three points better than average, but it's not a bonanza.

There are a lot of professional investors that buy nothing but branded goods. The one they usually start with is Nestle. They've done two or three points better than average, but it's not a bonanza.

It was very interesting. It's something about the flavor of ketchup on a goddamn fried potato. People are really willing to change brands over. They want Heinz. And so we could raise the price of Heinz pretty much anywhere. But you try to raise the Kraft cheese, and everybody goes into rebellion, including the final customer, the housewife.

It was very interesting. It's something about the flavor of ketchup on a goddamn fried potato. People are really willing to change brands over. They want Heinz. And so we could raise the price of Heinz pretty much anywhere. But you try to raise the Kraft cheese, and everybody goes into rebellion, including the final customer, the housewife.

They don't care that much about whether the cheese is Kraft or not.

They don't care that much about whether the cheese is Kraft or not.

Well, the sauce flavor. It's happened elsewhere. In Korea, one guy, a Chinese guy, throws all the sauces. Every single major sauce he controls at least 95% of.

Well, the sauce flavor. It's happened elsewhere. In Korea, one guy, a Chinese guy, throws all the sauces. Every single major sauce he controls at least 95% of.

Yeah.

Yeah.

Is that Coca-Cola as well?

Is that Coca-Cola as well?

I think, I knew when I was 70 that it was plenty hard, but it's just so hard. I know how hard it is now. And all these people who are getting this two and 20 or three and 30 or whatever, they all talk as though it was easy and they get to believe their own bullshit. And of course, it's not a bit easy. It's very hard.

I think, I knew when I was 70 that it was plenty hard, but it's just so hard. I know how hard it is now. And all these people who are getting this two and 20 or three and 30 or whatever, they all talk as though it was easy and they get to believe their own bullshit. And of course, it's not a bit easy. It's very hard.

Well, probably because it suits my nature. But I didn't really enjoy the three and 30 business. Once I had enough money of my own, I'd rather just operate with my own money. That is a much better way of doing it than investing. Because of the freedom? We're forced to deal with investment bankers. We're forced to deal with investment consultants. We're forced to deal with venture capital.

Well, probably because it suits my nature. But I didn't really enjoy the three and 30 business. Once I had enough money of my own, I'd rather just operate with my own money. That is a much better way of doing it than investing. Because of the freedom? We're forced to deal with investment bankers. We're forced to deal with investment consultants. We're forced to deal with venture capital.

You don't want to need other people. The point of getting rich is so you don't have to need other people.

You don't want to need other people. The point of getting rich is so you don't have to need other people.

The answer to that is no, we wouldn't. We had everybody that has an unusually good result. Almost everything has three things. They're very intelligent, they've worked very hard, and they were very lucky. It takes all three to get them on this list of the super successful. How can you arrange to have two of the answers of good luck?

The answer to that is no, we wouldn't. We had everybody that has an unusually good result. Almost everything has three things. They're very intelligent, they've worked very hard, and they were very lucky. It takes all three to get them on this list of the super successful. How can you arrange to have two of the answers of good luck?

The answer is you can start early and keep trying a long time, and maybe you'll get one or two. If you were starting again today, do you think insurance would still be the vehicle? It depends on your temperament. Insurance would be ideal for a certain kind of a temperament. And it takes a very patient person to get rich in insurance. It takes forever to get anything in.

The answer is you can start early and keep trying a long time, and maybe you'll get one or two. If you were starting again today, do you think insurance would still be the vehicle? It depends on your temperament. Insurance would be ideal for a certain kind of a temperament. And it takes a very patient person to get rich in insurance. It takes forever to get anything in.

It takes forever to push anybody aside. It's very hard to make money.

It takes forever to push anybody aside. It's very hard to make money.

Think of all the crumbums of the world that drink too much and then file big claims with the insurance company when the place gets on fire or something. Why would you want to pay your share of their stupidity?

Think of all the crumbums of the world that drink too much and then file big claims with the insurance company when the place gets on fire or something. Why would you want to pay your share of their stupidity?

Whatever he's learned is that Everybody needs some significant participation in the 12 companies that do better than everybody else. And you need two or three of them at least. And if you have that mindset, Apple is the logical candidate to be on the list for which you're gonna select your companies. And it's not very hard to come up with the idea that it may be okay

Whatever he's learned is that Everybody needs some significant participation in the 12 companies that do better than everybody else. And you need two or three of them at least. And if you have that mindset, Apple is the logical candidate to be on the list for which you're gonna select your companies. And it's not very hard to come up with the idea that it may be okay

We didn't put hundreds of billions, we put tens of billions into it.

We didn't put hundreds of billions, we put tens of billions into it.

We couldn't find anything else.

We couldn't find anything else.

Yeah, it got cheap. It got to be about 10 times or anything more.

Yeah, it got cheap. It got to be about 10 times or anything more.

Yeah, that's exactly the way it works.

Yeah, that's exactly the way it works.

No, no. The low hanging fruit for the idiot is it's not gone, but it's very small.

No, no. The low hanging fruit for the idiot is it's not gone, but it's very small.

Yeah, it was natural. That's why it happened. What causes that? Well, it's just, that's what human nature and competition, that's what it causes. Will we eventually have one? Eventually, this craziness in venture capital when they're all gone stupid, that's a natural outcome.

Yeah, it was natural. That's why it happened. What causes that? Well, it's just, that's what human nature and competition, that's what it causes. Will we eventually have one? Eventually, this craziness in venture capital when they're all gone stupid, that's a natural outcome.

I don't know how the world's going to, I know we're going to have as many as we did. They just happened. Would you continue investing in China? What's your position with that? Well, my position in China has been that the Chinese economy has better future prospects for the next 20 years than almost any other big economy. That's number one.

I don't know how the world's going to, I know we're going to have as many as we did. They just happened. Would you continue investing in China? What's your position with that? Well, my position in China has been that the Chinese economy has better future prospects for the next 20 years than almost any other big economy. That's number one.

Number two, the leading companies of China are stronger and better than practically any other leading companies anywhere. And they're available at a much cheaper price. So naturally, I'm willing to have some China risk in the Munger portfolio. How much China risk? Well, that's not a scientific subject. But I don't mind whatever it is, 18% or something, whatever's worked out in the Munger family.

Number two, the leading companies of China are stronger and better than practically any other leading companies anywhere. And they're available at a much cheaper price. So naturally, I'm willing to have some China risk in the Munger portfolio. How much China risk? Well, that's not a scientific subject. But I don't mind whatever it is, 18% or something, whatever's worked out in the Munger family.

It's okay with me.

It's okay with me.

Well, I don't like that as well as I like something with a real consumer brand of its own like Apple.

Well, I don't like that as well as I like something with a real consumer brand of its own like Apple.

Well, I only study two kinds of companies. One, I'm enough of a Ben Graham follower. If something is really cheap, even though it's a crappy company, I'm willing to consider buying it for a while anyway. And? I do that occasionally. And I've done it with great success a time or two, but my hard marks, I've done it once or twice in my lifetime for big gains, and that's it.

Well, I only study two kinds of companies. One, I'm enough of a Ben Graham follower. If something is really cheap, even though it's a crappy company, I'm willing to consider buying it for a while anyway. And? I do that occasionally. And I've done it with great success a time or two, but my hard marks, I've done it once or twice in my lifetime for big gains, and that's it.

It's not like I have a second. I've done it a hundred times. So it isn't a bit easy. A hundred times easy money is almost nonexistent.

It's not like I have a second. I've done it a hundred times. So it isn't a bit easy. A hundred times easy money is almost nonexistent.

Well, the grand companies, of course, are good. Get them at the right price. The whole trick is to get them on the few rare occasions when they're really cheap. But buying Costco at its present price, it may work out all right, but that's, again, it's getting hard.

Well, the grand companies, of course, are good. Get them at the right price. The whole trick is to get them on the few rare occasions when they're really cheap. But buying Costco at its present price, it may work out all right, but that's, again, it's getting hard.

Well, I don't give advice to just any young people. I give it to some. I paint my spots. I don't want to be more of a guru to the young people than I already am. It's getting hard out there. And there's all this bullshit and craziness. Of course, it's going to be hard.

Well, I don't give advice to just any young people. I give it to some. I paint my spots. I don't want to be more of a guru to the young people than I already am. It's getting hard out there. And there's all this bullshit and craziness. Of course, it's going to be hard.

Damn near. Of course it could be possible. It's only possible, it's likely, and it's actually happened.

Damn near. Of course it could be possible. It's only possible, it's likely, and it's actually happened.

It's the nature of things. Look, biology produces a very advanced creature like us. We can sit around and talk intelligently on all these subjects. But it does it by killing everybody off in brutal competition one with the other for hundreds of thousands of years. In other words, the system that nature uses to get smart is kind of unpleasant to the people who are losing.

It's the nature of things. Look, biology produces a very advanced creature like us. We can sit around and talk intelligently on all these subjects. But it does it by killing everybody off in brutal competition one with the other for hundreds of thousands of years. In other words, the system that nature uses to get smart is kind of unpleasant to the people who are losing.

Well, it wasn't that it was all that easy back a long time. It just was a lot easier.

Well, it wasn't that it was all that easy back a long time. It just was a lot easier.

And God knows what happens after an unpleasant blow-up with our modern democracies. You get to see a lot like Europe, which is quite dysfunctional.

And God knows what happens after an unpleasant blow-up with our modern democracies. You get to see a lot like Europe, which is quite dysfunctional.

It was never easy. I thoroughly understood it was never easy, and it's harder now. Those are the two . And you pay attention to how you're handling the people you deal with. You want a good reputation when you're all done, not a bad one.

It was never easy. I thoroughly understood it was never easy, and it's harder now. Those are the two . And you pay attention to how you're handling the people you deal with. You want a good reputation when you're all done, not a bad one.

The beauty of it is you only have to get rich once. You don't have to climb this mountain four times. You just have to do it once.

The beauty of it is you only have to get rich once. You don't have to climb this mountain four times. You just have to do it once.

It takes a lot of good execution to do it. You really have to set out to do it and then do it with analysis every day, every week, every year for 40 years. It's not so damned easy.

It takes a lot of good execution to do it. You really have to set out to do it and then do it with analysis every day, every week, every year for 40 years. It's not so damned easy.

Yes. Yes. Culture plus model. Yes, absolutely. And very reliable, hardworking, determined execution for 40 years.

Yes. Yes. Culture plus model. Yes, absolutely. And very reliable, hardworking, determined execution for 40 years.

I would say that the central norm was don't raise the market. Get it low and keep it there forever.

I would say that the central norm was don't raise the market. Get it low and keep it there forever.

I don't know. I had no conversations with him on that subject.

I don't know. I had no conversations with him on that subject.

Well, I'm sure Jim would have forbade it. Absolutely. There was no board-level discussion of the hot dog? No, no, no. Those two would not have thought it was a board matter to discuss the price of hot dogs.

Well, I'm sure Jim would have forbade it. Absolutely. There was no board-level discussion of the hot dog? No, no, no. Those two would not have thought it was a board matter to discuss the price of hot dogs.

I'll tell you what it is. It is hard to open too many stores a year. New store, new manager, new this, new politics. It's hard. Plus, a lot of stuff has to be learned and taught and put in place. And so they didn't want to do more than they could comfortably handle.

I'll tell you what it is. It is hard to open too many stores a year. New store, new manager, new this, new politics. It's hard. Plus, a lot of stuff has to be learned and taught and put in place. And so they didn't want to do more than they could comfortably handle.

Well, I'll tell you what happened there. The first store they tried to open in China, the first store somebody wanted a $30,000 bribe. Chinese culture. And they just wouldn't pay it. And that made such a bad impression on Jim Senegal. He wouldn't even talk to him going into China for about 30 years thereafter. So what changed? Why finally go in?

Well, I'll tell you what happened there. The first store they tried to open in China, the first store somebody wanted a $30,000 bribe. Chinese culture. And they just wouldn't pay it. And that made such a bad impression on Jim Senegal. He wouldn't even talk to him going into China for about 30 years thereafter. So what changed? Why finally go in?

Well, finally the board started making enough noises.

Well, finally the board started making enough noises.

Yeah, who can? Who knows? Oh, that's so great.

Yeah, who can? Who knows? Oh, that's so great.

No, it's all price. They figured it out to announce.

No, it's all price. They figured it out to announce.

Yes. You always wanted the rich man trying to save money. Well, and it's not just that they're the wealthiest customers.

Yes. You always wanted the rich man trying to save money. Well, and it's not just that they're the wealthiest customers.

Yeah, that's an old saying of Peter's.

Yeah, that's an old saying of Peter's.

Well, take those goddamn Costco hot dogs. That's an exception. Anybody else would have raised the price of hot dogs a long time ago. They just don't do it. They just know that it's half famous. You'll bring your kids in. They know they've got something going there that's worth extra money to them. They just don't destroy it.

Well, take those goddamn Costco hot dogs. That's an exception. Anybody else would have raised the price of hot dogs a long time ago. They just don't do it. They just know that it's half famous. You'll bring your kids in. They know they've got something going there that's worth extra money to them. They just don't destroy it.

I may be a big fan, but I'm sort of... by my hat while he lurched around the track. And they make me nervous. It's so aggressive.

I may be a big fan, but I'm sort of... by my hat while he lurched around the track. And they make me nervous. It's so aggressive.

No, that's what makes me nervous. Of course, it's dangerous.

No, that's what makes me nervous. Of course, it's dangerous.

Well, of course you do that if it's safer and easier and so forth. But I would argue that Costco, where they've done some of these things that are extreme like the hot dog, it's been a plus in that they've been smart to not change their ways on one item or two.

Well, of course you do that if it's safer and easier and so forth. But I would argue that Costco, where they've done some of these things that are extreme like the hot dog, it's been a plus in that they've been smart to not change their ways on one item or two.

I mean, you turned- Well, BYD, this year or so, at least two and a half million cars. Most of them electric. That's unheard of. I don't think I've ever heard of them. They also weigh more than Mercedes, for instance.

I mean, you turned- Well, BYD, this year or so, at least two and a half million cars. Most of them electric. That's unheard of. I don't think I've ever heard of them. They also weigh more than Mercedes, for instance.

Yeah, more than anybody. Yeah. Lots of troubles and losses. They ran into terrible trouble. They created the wrong kind of, they made lots of mistakes. They were lucky they'd be on the cutting edge of this electric car business. It's way more acceleration than most people. So you had a car with more oomph than most people. So the young macho male has a real lively car.

Yeah, more than anybody. Yeah. Lots of troubles and losses. They ran into terrible trouble. They created the wrong kind of, they made lots of mistakes. They were lucky they'd be on the cutting edge of this electric car business. It's way more acceleration than most people. So you had a car with more oomph than most people. So the young macho male has a real lively car.

There are a lot of things about electric car really works in some ways that is better. and making a 90-degree turn. You go right opposite a parallel parking place and just move this way, turn the wheels 90 degrees and go in. Well, nobody's ever done that. If your car goes flat, you could run 100 miles on three other wheels or something.

There are a lot of things about electric car really works in some ways that is better. and making a 90-degree turn. You go right opposite a parallel parking place and just move this way, turn the wheels 90 degrees and go in. Well, nobody's ever done that. If your car goes flat, you could run 100 miles on three other wheels or something.

And do they have better economics because they don't have nearly as many parts?

And do they have better economics because they don't have nearly as many parts?

Well, very good people have an investment. That's a venture capital type investment. It happened to be a thinly traded public company when we bought it instead of a venture capital type company. It was a venture capital type play. And they just went and put the foot right in the floorboard and played it hard. By the way, both BYD and we tried to talk about going into the car business.

Well, very good people have an investment. That's a venture capital type investment. It happened to be a thinly traded public company when we bought it instead of a venture capital type company. It was a venture capital type play. And they just went and put the foot right in the floorboard and played it hard. By the way, both BYD and we tried to talk about going into the car business.

They're going to buy a bankrupt car business and go into the car business. I said, that's a great yard for you. Why would you want to do that? And he paid no attention to us.

They're going to buy a bankrupt car business and go into the car business. I said, that's a great yard for you. Why would you want to do that? And he paid no attention to us.

And it worked fabulously well. After huge mistakes, they almost went broke with their early dealership building system. Almost went broke. What captivated you about BYJ? That guy was a genius. He was at a PhD in engineering and he could look at somebody's part. He could make that part, you know, look at it in the morning and look at it in the afternoon and he could make it.

And it worked fabulously well. After huge mistakes, they almost went broke with their early dealership building system. Almost went broke. What captivated you about BYJ? That guy was a genius. He was at a PhD in engineering and he could look at somebody's part. He could make that part, you know, look at it in the morning and look at it in the afternoon and he could make it.

I'd never seen anybody like that. He could do anything. He is a natural engineer and a get-it-done type production executive. And that's a big thing. It's a big lot of talent to have in one place. And it's very useful. He solved all these problems on these electric cars and the motors and the acceleration and the braking and so on.

I'd never seen anybody like that. He could do anything. He is a natural engineer and a get-it-done type production executive. And that's a big thing. It's a big lot of talent to have in one place. And it's very useful. He solved all these problems on these electric cars and the motors and the acceleration and the braking and so on.

Well, he's a fanatic that knows how to actually make things with his hands, so he has to. He's closer to ground zero, in other words. The guy at B-Radio is better at actually making things than any of the others.

Well, he's a fanatic that knows how to actually make things with his hands, so he has to. He's closer to ground zero, in other words. The guy at B-Radio is better at actually making things than any of the others.

I'm going to party. Where's the party going to be? The California Globe. But I've totally maxed out the room. I can't squeeze another room.

I'm going to party. Where's the party going to be? The California Globe. But I've totally maxed out the room. I can't squeeze another room.

Well, practically everything is. Even politics, bad as it is, is kind of interesting.

Well, practically everything is. Even politics, bad as it is, is kind of interesting.

We had about the same amount of fun all the way through. We're having fun now.

We had about the same amount of fun all the way through. We're having fun now.

Well, we remember we were sweating blood in some of those good old days.

Well, we remember we were sweating blood in some of those good old days.

Yeah, yeah. There were a lot of close misses. We got out with a big problem in Solomon. We could have had a big loss.

Yeah, yeah. There were a lot of close misses. We got out with a big problem in Solomon. We could have had a big loss.

Not so much. We would have survived it. If you had let the whole investment in Solomon go to zero, it would have been... If it had all blown up and went to zero, we would have written it off and gone on and done pretty well.

Not so much. We would have survived it. If you had let the whole investment in Solomon go to zero, it would have been... If it had all blown up and went to zero, we would have written it off and gone on and done pretty well.

Well, we like to remember the close misses. We had real terrible problems. We had a terrible problem with the Buffalo News.

Well, we like to remember the close misses. We had real terrible problems. We had a terrible problem with the Buffalo News.

No, of course not. Are the dog tracks and racetracks of the casinos good for America? Of course not. They're just very popular. That's how Warren got his start, though, right? At the racetrack? Well, but Warren never gambled heavily as a patron. Warren wanted the odds in his favor, not somebody else. Right. It's just so simple if you're Warren. You want the house.

No, of course not. Are the dog tracks and racetracks of the casinos good for America? Of course not. They're just very popular. That's how Warren got his start, though, right? At the racetrack? Well, but Warren never gambled heavily as a patron. Warren wanted the odds in his favor, not somebody else. Right. It's just so simple if you're Warren. You want the house.

Yeah, there were two newspapers in that town, and we started a Sunday edition, and that started a holy war, and the other guy went broke. Well, we could have had a lot of bad publicity over that.

Yeah, there were two newspapers in that town, and we started a Sunday edition, and that started a holy war, and the other guy went broke. Well, we could have had a lot of bad publicity over that.

I mean, you weren't the Warren and Charlie of... No, but I was very aggressive about wanting to have a good Sunday edition. I didn't want to own the paper for 50 years. There was no Sunday edition when the other guy had one.

I mean, you weren't the Warren and Charlie of... No, but I was very aggressive about wanting to have a good Sunday edition. I didn't want to own the paper for 50 years. There was no Sunday edition when the other guy had one.

Total goldmine.

Total goldmine.

No, only the little ones. Only the little ones, oh. Yeah, the big ones were less, 30 or 40 or 20, 500.

No, only the little ones. Only the little ones, oh. Yeah, the big ones were less, 30 or 40 or 20, 500.

What were you thinking? Well, I've never liked John Malone's extreme manipulations. I don't want to be known as the great manipulator like John Malone is. He paid less income taxes than anybody. He just pushed everything to the dry lodge of the stream.

What were you thinking? Well, I've never liked John Malone's extreme manipulations. I don't want to be known as the great manipulator like John Malone is. He paid less income taxes than anybody. He just pushed everything to the dry lodge of the stream.

Well, there are a lot of great companies. So Hermes is a great company. In its heyday, General Motors was a great company. It just gradually went to hell one contract at a time.

Well, there are a lot of great companies. So Hermes is a great company. In its heyday, General Motors was a great company. It just gradually went to hell one contract at a time.

I think most places have a lot of change and threat in their future.

I think most places have a lot of change and threat in their future.

There's a difference. Some of what I call a specialized industrial company, and Berkshire has a lot of them. We have a lot of companies that are quite insulated from really tough competition. Just because they've been so long and they're so good at what they do and they have a good reputation and high value and so on and so on.

There's a difference. Some of what I call a specialized industrial company, and Berkshire has a lot of them. We have a lot of companies that are quite insulated from really tough competition. Just because they've been so long and they're so good at what they do and they have a good reputation and high value and so on and so on.

Well, I think a lot of companies are pretty good, but you can't confidently say what's going to happen because you may get some guy like Iger in that just wants to push everything and do the right public relations. So no matter how good the business is, it'll be kind of phony.

Well, I think a lot of companies are pretty good, but you can't confidently say what's going to happen because you may get some guy like Iger in that just wants to push everything and do the right public relations. So no matter how good the business is, it'll be kind of phony.

Well, of course, you've got to get along with everybody. You've got to help them through their tough times and they help you and so forth.

Well, of course, you've got to get along with everybody. You've got to help them through their tough times and they help you and so forth.

You want to be the house, not the punter.

You want to be the house, not the punter.

But I think it's not as hard as it looks. I think half of the marriages in America work pretty damn well. And would it work just as well if both of us had to marry somebody else, by the way?

But I think it's not as hard as it looks. I think half of the marriages in America work pretty damn well. And would it work just as well if both of us had to marry somebody else, by the way?

Yeah, sure.

Yeah, sure.

And you've got to have trust with your spouse when it comes to things like education of the children and so forth.

And you've got to have trust with your spouse when it comes to things like education of the children and so forth.

Well, you know, if you start to think about it, it's pretty hard. It doesn't look so damned easy just to go out. If you go to the ordinary person trying to promote himself as an investment advisor of some kind, he just thinks he knows everything about everything and how the Federal Reserve should be run and so on. We don't feel that way.

Well, you know, if you start to think about it, it's pretty hard. It doesn't look so damned easy just to go out. If you go to the ordinary person trying to promote himself as an investment advisor of some kind, he just thinks he knows everything about everything and how the Federal Reserve should be run and so on. We don't feel that way.

you'll do pretty well at, but it's not going to be that damn easy.

you'll do pretty well at, but it's not going to be that damn easy.

Well, it's organized. They don't really know anything about the companies or anything. They just gamble on going up and down the price. If I were running the world, I would have a tax on short-term gains with no offset for losses on anything. And I would just drive this whole crowd of people out of business.

Well, it's organized. They don't really know anything about the companies or anything. They just gamble on going up and down the price. If I were running the world, I would have a tax on short-term gains with no offset for losses on anything. And I would just drive this whole crowd of people out of business.

Well, of course, Renaissance was the first algorithm. It was so simple. They sifted all this data from the past. And what did they decide? up-up, which were two closing prizes, and down-down were more common than down-up or up-down. Once they realized that's the way it was for various reasons deep in the psychology of man, is that man is a natural trend follower. Gambling short term.

Well, of course, Renaissance was the first algorithm. It was so simple. They sifted all this data from the past. And what did they decide? up-up, which were two closing prizes, and down-down were more common than down-up or up-down. Once they realized that's the way it was for various reasons deep in the psychology of man, is that man is a natural trend follower. Gambling short term.

And they just programmed the computers to automatically You know, buy on one thing on the first up day and then sell before the end of the second day. And you just did it day after day after day. And every day the machine would, you know, the central clearing agent would say, your check today is $8,500,000. It's crazy. Your check tomorrow is $9,400,000. Well, what happens is that the ones...

And they just programmed the computers to automatically You know, buy on one thing on the first up day and then sell before the end of the second day. And you just did it day after day after day. And every day the machine would, you know, the central clearing agent would say, your check today is $8,500,000. It's crazy. Your check tomorrow is $9,400,000. Well, what happens is that the ones...

The easiest trade is to front run what you know what the index funds have to buy. And you know what it is exactly. They all know that. And the way they get their returns year after year is taking the leverage, the midday leverage up higher and higher and higher and higher.

The easiest trade is to front run what you know what the index funds have to buy. And you know what it is exactly. They all know that. And the way they get their returns year after year is taking the leverage, the midday leverage up higher and higher and higher and higher.

So they're making smaller and smaller profits on more and more volume, which gives them this big peak leverage risk, which I would not run myself. And that's the only way they make these big returns is to have this huge leverage. It would make you crazy if you were already rich.

So they're making smaller and smaller profits on more and more volume, which gives them this big peak leverage risk, which I would not run myself. And that's the only way they make these big returns is to have this huge leverage. It would make you crazy if you were already rich.

He knows a lot about it. He's been there all his life.

He knows a lot about it. He's been there all his life.

Rod Hills somehow knew Saul Price and knew what he was doing. He said, you have to go down and meet him, he said. So I drove down and went through his store and talked with Saul. And, of course, Saul was a very intelligent man. Saul was an ordinary lawyer until he was 39 years of age. Then he went out and formed a government employees discount company or whatever. Was this in the Fedco days?

Rod Hills somehow knew Saul Price and knew what he was doing. He said, you have to go down and meet him, he said. So I drove down and went through his store and talked with Saul. And, of course, Saul was a very intelligent man. Saul was an ordinary lawyer until he was 39 years of age. Then he went out and formed a government employees discount company or whatever. Was this in the Fedco days?

He was no longer with Fedco. He sold Fedco to the Germans.

He was no longer with Fedco. He sold Fedco to the Germans.

Yeah.

Yeah.

Yes, I did. But I just bought my stock in the market.

Yes, I did. But I just bought my stock in the market.

Well, Sanigo asked Warren to become a director of Costco. He was looking for somebody with a financial reputation. As an independent? Yes, and Warren wouldn't do it. He said, well, get Charlie to do it. I want shorter plane rides to director's meetings and so on. So that's how that happened.

Well, Sanigo asked Warren to become a director of Costco. He was looking for somebody with a financial reputation. As an independent? Yes, and Warren wouldn't do it. He said, well, get Charlie to do it. I want shorter plane rides to director's meetings and so on. So that's how that happened.

They tried to get Warren to buy out the French when they left Carrefour. And Warren wouldn't do it. Warren doesn't like retailing.

They tried to get Warren to buy out the French when they left Carrefour. And Warren wouldn't do it. Warren doesn't like retailing.

He's afraid of retail. Practically everything that was Monty Mighty in retail is gone. Cesar Roebuck is gone. The big departments are gone, you know. It's just too damn difficult as far as he's concerned. And he had a bad experience with diversified retail, right? No, we made nothing but money in diversified. We didn't exactly make it in retailing, but we made a lot of money.

He's afraid of retail. Practically everything that was Monty Mighty in retail is gone. Cesar Roebuck is gone. The big departments are gone, you know. It's just too damn difficult as far as he's concerned. And he had a bad experience with diversified retail, right? No, we made nothing but money in diversified. We didn't exactly make it in retailing, but we made a lot of money.

We bought this little pissant department store chain in Baltimore. Big mistake, too. As the ink dried on the closing papers, we realized it would be a terrible mistake. So we decided just to reverse it and take the hits to look foolish rather than go broke. He just told us how to get us out of this. By that time, we'd already financed half of it on covenant-free debt and so forth.

We bought this little pissant department store chain in Baltimore. Big mistake, too. As the ink dried on the closing papers, we realized it would be a terrible mistake. So we decided just to reverse it and take the hits to look foolish rather than go broke. He just told us how to get us out of this. By that time, we'd already financed half of it on covenant-free debt and so forth.

And they had all this extra cash. And our own stocks got down to selling in enormous. We just, in the middle of one of those recessions, we just bought and bought and bought and bought. And all that money went right into those stocks. And of course, we tripled and just sitting on our ass. And that led to Blue Chip? Yeah, it was part of the early success of Blue Chip.

And they had all this extra cash. And our own stocks got down to selling in enormous. We just, in the middle of one of those recessions, we just bought and bought and bought and bought. And all that money went right into those stocks. And of course, we tripled and just sitting on our ass. And that led to Blue Chip? Yeah, it was part of the early success of Blue Chip.

It's something else that people don't know about. Yeah. We bought a little piss-ant savings and loan company for maybe $20 million. And when we left that thing, we had taken out of our little $20 million investment. over $2 billion in marketable securities, which went into Nebraska insurance companies as part of their bedrock capital. So we had some wonderful early years.

It's something else that people don't know about. Yeah. We bought a little piss-ant savings and loan company for maybe $20 million. And when we left that thing, we had taken out of our little $20 million investment. over $2 billion in marketable securities, which went into Nebraska insurance companies as part of their bedrock capital. So we had some wonderful early years.

And that's what everybody needs is wonderful early years. Wow.

And that's what everybody needs is wonderful early years. Wow.

Warren got tired of me kind of reminding him. Yeah, yeah.

Warren got tired of me kind of reminding him. Yeah, yeah.

No one was kidding me for being so repetitive on the subject. But there aren't many times in a lifetime when you know you're right and you know you have one that's really gonna work wonderfully. Maybe five, six times in a lifetime you get a chance to do it. And people who do it two or three times early all go broke because they think it's easy.

No one was kidding me for being so repetitive on the subject. But there aren't many times in a lifetime when you know you're right and you know you have one that's really gonna work wonderfully. Maybe five, six times in a lifetime you get a chance to do it. And people who do it two or three times early all go broke because they think it's easy.

Well, they really did sell cheaper than anybody else in America. And they did it in big, efficient stores. And all the parking spaces were 10 feet wide instead of 8 feet 9 or whatever they normally are. They did it all right. And they had a lot of parking spaces. And they kept out of their stores. All these people didn't do big volumes, you see.

Well, they really did sell cheaper than anybody else in America. And they did it in big, efficient stores. And all the parking spaces were 10 feet wide instead of 8 feet 9 or whatever they normally are. They did it all right. And they had a lot of parking spaces. And they kept out of their stores. All these people didn't do big volumes, you see.

And they gave special benefits to the people who did come to the stores in the way of reward points.

And they gave special benefits to the people who did come to the stores in the way of reward points.

Yeah.

Yeah.

They make the suppliers wait until they've been paid, and then they're scheduled to pay only after they're scheduled to sell.

They make the suppliers wait until they've been paid, and then they're scheduled to pay only after they're scheduled to sell.

That's correct.

That's correct.

Who knows? Saul kind of liked it. He was kind of a financier. He liked deals. He liked this miscellaneous real estate. Yeah, but it doesn't make sense. You got an enterprise as big as Costco. You don't want to screw around with your parking lot and get other people to clog up your parking lot permanently and stuff that's not going to pay you very much. You don't want them is the answer.

Who knows? Saul kind of liked it. He was kind of a financier. He liked deals. He liked this miscellaneous real estate. Yeah, but it doesn't make sense. You got an enterprise as big as Costco. You don't want to screw around with your parking lot and get other people to clog up your parking lot permanently and stuff that's not going to pay you very much. You don't want them is the answer.

Well, there are lots of them. That little grocery store chain here in Los Angeles, Gelson Brothers.

Well, there are lots of them. That little grocery store chain here in Los Angeles, Gelson Brothers.

Well, you may find it five years after you bought it. These things may work into it or your own understanding may get better. But when you know you have an edge, you should bet heavily. You know you're right. And most people, they don't teach that in business school. It's insane. Of course, you've got to bet heavily on your best bets.

Well, you may find it five years after you bought it. These things may work into it or your own understanding may get better. But when you know you have an edge, you should bet heavily. You know you're right. And most people, they don't teach that in business school. It's insane. Of course, you've got to bet heavily on your best bets.

You work at it. You do a lot of reading and thinking and visiting.

You work at it. You do a lot of reading and thinking and visiting.

There was a lot of low-hanging fruit in the early days of our operation. You don't have any low-hanging fruit that is easy to recognize.

There was a lot of low-hanging fruit in the early days of our operation. You don't have any low-hanging fruit that is easy to recognize.