BECKY QUICK:  We are sitting down right now with Warren Buffett, the chairman of Berkshire Hathaway, who, for the first time in 60 years, has been watching all of this from the audience instead of being onstage.

And last year at this time, Warren, you surprised everyone with the announcement that you were stepping down as CEO.

Fast forward a year and here we are. What do you think?

WARREN BUFFETT:  Well, I think it’s all working. It’s all working.

It isn’t our ideal surrounding area — or environment, I should say — in terms of deploying cash for Berkshire.

But in terms of how — we got the right management, we got the right arrangement.

And, you know, we can pick our spots and nobody can tell us what to do exactly. And so sometimes we’re doing nothing. But (laughs) other times we get quite active, I mean —

BECKY QUICK:  You know, Ajit spent some time on the stage today talking about how one of his keys is to do nothing —

WARREN BUFFETT:  Absolutely.

BECKY QUICK:  — when it comes to insurance, when it comes to writing insurance, which is the same thing that you have always talked about with whether to invest or not.

WARREN BUFFETT:  Yeah. The world is full of people that are offering you things to do, and then the question is to find one that you know makes sense.

And there may be twenty out there that make sense that you don’t understand and you just leave them alone.

BECKY QUICK:  You said that the world, or the surrounding environment, is not ideal. And I guess that points to the idea that there’s almost $400 billion dollars in cash on hand. Although Greg took some pains to show it’s really more like $380 billion in cash on hand.

WARREN BUFFETT:  (Laughs) Well, yeah.

BECKY QUICK:  But there’s a lot of cash on hand, and you’re still active in managing the portfolio, too, and looking at stocks.

You’re looking around and you don’t see a lot that you want to invest in.

WARREN BUFFETT:  No. Well, then we don’t do anything, yeah.

I mean we’ve been in the — of the 60 years I’ve been in the business, you know, probably five have been really juicy, you know — (Laughs)

And I think it was Tom Watson Sr. of IBM that said — they asked him the reason why IBM had been so successful or something like that.

And he said, « I’m smart in spots and I stay around those spots. » And that’s the whole thing.

And IBM was in three different businesses, including time clocks and a couple — and two of the three turned out to be no good, but — (Laughs)

So they just focused on the one.

BECKY QUICK:  What is it when you look around? It’s just prices are too high at this point? I would imagine there are —

WARREN BUFFETT:  Yeah.

BECKY QUICK:  — Greg said this from the stage, too —

WARREN BUFFETT:  Yeah.

BECKY QUICK: There are businesses that you like —

WARREN BUFFETT: Well —

BECKY QUICK: — just not at these prices.

WARREN BUFFETT:  And I would say I understand fewer of the businesses, as a percentage of the whole, than I did ten years ago.

I have not learned new industries for some years, you know. And — so I don’t kid myself on that. I’m not going to learn them.

I’m not going to have an edge on, you know, a whole bunch of younger people that have actually grown up with it, and used the product, seen things.

But — well — as I’ve mentioned, you know, you don’t have to understand too many if they’re like Apple. (Laughs)

BECKY QUICK:  But looking around, let’s just get some macro thoughts on this, because I don’t know that this is something that Greg is going to comment on, per se.

Just looking at the macro stock market environment, what does this feel like to you? Does it feel expensive? Does it feel like there are opportunities in some places —

WARREN BUFFETT:  Well, it feels like — you know, I’ve compared the markets to a church with a casino attached. And people can move between the church and casino.

And I would say there are more people in the church and more people in the casino. But the casino has gotten very attractive to people, you know.

If you’re buying one-day options, or selling them, I mean, that is — that’s not investing, it’s not speculating, it’s gambling, you know, just totally.

There’s nobody that can explain why they’re buying an option for one day, unless they have — maybe the fellow that, you know, made the four hundred-and-some thousand dollars from knowing when we were going into Venezuela can do it. But, I mean —

And the quantity of those things is just incredible.

So we’ve never had people in a more gambling mood than now, but that doesn’t mean that investing is terrible. It does mean that prices for an awful lot of things will look very silly. I mean, they — you know, they —

They had a squeeze in Avis, of all things. Well, Avis has been around for 50 years, but just this past week —

And we have lots more regulation and everything now. But people spend their time figuring out how they get around the rules rather than following the rules, and that’s just a challenge.

BECKY QUICK:  The type of investor you are though is — you laid it out yourself — in the 60 years you’ve been doing this in the business, you’ve had maybe five juicy years. I guess that means you’re always looking for the next juicy year.

What do you think it would take to make a juicy year, or a juicy opportunity, for you?

WARREN BUFFETT:  It’s a phone call in many — in some cases, you know —

We bought a business last year. It wasn’t big enough to be meaningful, but we got a letter.

BECKY QUICK:  Bell Labs [Laboratories]?

WARREN BUFFETT:  Yeah, Bell Labs.

And, you know — and sometimes there’s more zeroes attached to them than others. (Laughs)

And we’re big enough to handle anything, and we can make decisions faster than anybody, and our word is good.

There’s an awful lot of people that they’re — when they — they’re in the business of reselling something or — you know, it’s — and there’s —  

And it’s a lot better —

If you’re a good salesperson, there’s no reason to be selling vacuum cleaners, or — you know.

Might as well sell stock, you’ll make way more money. (Laughs)

It’s where the money is. And there’s more money around than ever, and it —

BECKY QUICK:  But the best opportunities have probably come when the macro environment leads to panic —

WARREN BUFFETT:  That’s the most likely.

Well, the most likely time to buy things is when nobody else will answer their phones. You know, everybody else talks about their wonderful trading departments and everything. Just try them out sometime when markets are collapsing. They don’t answer the phones.

BECKY QUICK:  Right, right.

WARREN BUFFETT:  And if they do, the bids are subject, and the offers are subject, and the spread is wide, and they’ll use the information they get from you about what you want to do to go out and kill you some other way. I mean —

It’s really like going to a slaughterhouse, I mean, you know. You don’t feel like eating hot dogs for a while. (Laughter)

BECKY QUICK:  I guess what I’m trying to get at is, do you see the circumstances building up anywhere that could lead to a time like that again, any sort of panic in the market?

WARREN BUFFETT:  Sure.

BECKY QUICK:  Where do you see them?

WARREN BUFFETT:  Well, if you saw them, they wouldn’t happen.

BECKY QUICK: OK.

WARREN BUFFETT: I mean, you’ve got all kind —

You don’t worry about what people are talking about can happen.

It’s something that comes out of the blue. But then something will come out of the blue.

BECKY QUICK:  Yeah.

WARREN BUFFETT:  I mean — (laughs) — a nuclear bomb could come out of the blue.

BECKY QUICK:  Well, let’s knock on wood on that. (Laughter)

WARREN BUFFETT:  Well, it doesn’t do any good to knock on wood. That’s — (laughter) — that’s the point.

BECKY QUICK:  Yeah.

WARREN BUFFETT:  You know, it was the archduke getting shot, you know, in 1914, or something like that, for World War I.

It — just take everything in life. If it — if it’s something people are talking about and thinking about, it’s not going to happen.

BECKY QUICK:  Yeah.

WARREN BUFFETT:  But there are things that can happen out of the blue.

And actually, that’s particularly true to use that phraseology now, because the things that can come out of the sky, you know —

We don’t know what can happen tomorrow. I don’t like to talk that way — (laughs) — to people, whether it’s you or anybody else, I mean, because — you know —

Because whether it does you a lot of good to worry about that — I don’t think it does do any good to worry about it.

I think it’s good to be cognizant of it, but the worrying about it is terrible. And I don’t like to — I don’t like to even cause that belief with people. I don’t like to —

BECKY QUICK:  Yeah.

WARREN BUFFETT:  — tell them the end is coming, the end is coming — (laughs) — or something like that.

BECKY QUICK:  A friend told me yesterday, he’s recently started using the phrase, « I don’t fret, I don’t worry. » And it’s probably a good way to go about life.

But let’s talk about some of the issues that are out there right now.

Inflation is up. That’s an issue. So —

WARREN BUFFETT:  Well, and–

BECKY QUICK:  — how does Berkshire — how does Berkshire handle that with its businesses?

WARREN BUFFETT:  Well, we can’t handle runaway inflation, except not to be there in the way of it.

And if you look at the number of countries that have had runaway inflation since World War II — you know, in my lifetime — it’s very large, you know.

And once you create that, it becomes a different world.

And, you know, Germany obviously experienced it after World War I.

But there are dozens and dozens of countries that have experienced it. And, of course, you have countries that have gone bankrupt, like, six or seven times, I mean — (laughs) —

It’s just amazing what people do in financial markets.

BECKY QUICK:  What about the inflation that we’re dealing with right now, which is, you know, not excessive, it’s north of 3% at this point, but we’re not even back at the levels we were during COVID —

WARREN BUFFETT:  Oh no.

BECKY QUICK:  — when we were looking at 8% to 9%.

So what about just higher energy prices, how that works through the line, and how you handle it?

WARREN BUFFETT:  Well, it came close before [1979-1987 Fed Chair Paul] Volcker. I mean, it was just — it was cash is trash, you know.

And people were losing faith in the currency, and they felt they could borrow at 12% to earn 6% on farming or something like that. And they — they had huge farms in this state, Nebraska, collapsed because they bought beyond the earning power, they paid interest rates beyond the earning power, just because they felt that the dollar was going to disappear and the land wouldn’t disappear.

And it’s — it’s tragic for many people.

And if you’re the best doctor in town or the best lawyer in town, you’ll always make money under any situation — the best — the best TV personality, I mean — (Laughs) — it’s — it’s —

But — what — not having faith in the money does to a country, it turns it into something else.

BECKY QUICK:  Yeah.

WARREN BUFFETT: And I — you know — I’ve always hoped that, you know, the U.S. never does it.

But we are not immune from it happening.

We have a lot of control over whether rates may go up a half a point or down a half a point, but we may have less control over whether they go up 50 points. (Laughs)

BECKY QUICK:  You’ve long been a supporter of [outgoing Fed Chair] Jay Powell’s.

WARREN BUFFETT:  Exactly.

BECKY QUICK:  He had his last FOMC meeting as chairman just this last week.

He did say that he’s going to be sticking around, staying on the Fed, staying in that position for the foreseeable future, in part because of the threats that he’s faced.

WARREN BUFFETT:  I’ll feel better when he’s there than when he’s not. I mean — it — you know —

I just felt better when Volcker was there.

But you — economists aren’t the best at this sort of thing. Read any old economics book from 1950 or 1970.

Paul Samuelson, who was a terrific guy and smart as hell, he had the standard textbook for 25 years.

And if you looked up, you know, zero interest rates in year after year after year — it was a 900-page book — and there wasn’t an entry for it, you know —

It was the most important economic development, I mean, in terms of the impact of what happened, everything during the lifetime of the students reading it.

But it’s what you don’t think of that does all the damage.

BECKY QUICK:  Yeah.

Let’s talk a little bit about CEOs in some of the Berkshire holdings. You mentioned Apple’s Tim Cook and just the phenomenal job you think he’s done.

WARREN BUFFETT:  Incredible.

BECKY QUICK:  He’s not the only one of your major holding CEOs who stepped down.

James Quincey recently stepped down from Coca-Cola, too —

WARREN BUFFETT:  Yeah.

BECKY QUICK:  And we just spoke with Vicki Hollub, who announced that she is retiring and stepping down from that position at Occidental [Petroleum].

Part of what Greg’s talked about is how stable that portfolio is, and these holdings or companies that he knows and managers that he knows.

There’s going to be some new managers in some of those major holdings coming in. Is that a problem?

WARREN BUFFETT:  Well, it was certainly a problem with Coca-Cola there for — (laughs) — a good many years when I was around the company. I mean, sure, it’s —

And you have the most problems with — with a really good company, because it’ll — it’ll continue.

I mean, if you’re selling some product that people are buying every day, you can make the wrong decision for a long time.

But that’s one of the problems with investing.

[Apple CEO] Tim Cook, I felt, was very, very good from the start.

And our — most of our managers are very good at the smaller problems. They can’t anticipate the overwhelming problems. That’s my job, or now Greg’s job.

BECKY QUICK:  Do you feel good about those holdings still? Have you met any of the new managers — of those businesses?

WARREN BUFFETT:  I haven’t met the old managers. (Laughter)

BECKY QUICK:  Of the new businesses — of the new CEOs that are coming in — Tim Cook’s replacement [John Ternus] —

WARREN BUFFETT:  Well I, you know —

BECKY QUICK: — Henrique [Braun] at Coca-Cola —

WARREN BUFFETT : I certainly met the people at Bell Labs that we did.

And obviously, I’ve met Dick. We made the deal.

So, I enjoy meeting the people.

But you can make mistakes with people. I mean, look at the divorce rate. (Laughter)

That’s more important than whether you’ve got the right CEO or anything else.

And now you’ve got years of trial.

I mean, back when I was young, I mean, you had to make the decision, you know. Or you didn’t have to make the decision, but a good many people made the decision when they were 20 or 21. Now —

BECKY QUICK:  To get married.

WARREN BUFFETT:  Yeah, they got married.

Now they spend five years, they still make the same mistakes. (Laughter)

BECKY QUICK:  So you think we’re getting worse at our judgment in some of these things —

WARREN BUFFETT:  Well, I don’t know. It may be that people behaved differently before the marriage than after, who knows exactly.

I would say that almost everybody feels either their marriage is better or worse than they anticipated a month after they were married. (Laughter)

But I don’t know which. (Laughs)

BECKY QUICK:  Warren, let’s talk a little bit about deepfakes, because the deepfake Warren that popped up early in this session was pretty good.

They had somebody standing up, you know — and Greg was joking about it, but, you know — the first question went to a guy from Warren up in the rafters who lives in Omaha.

You’ve been concerned about some of these AI deepfakes and what that means for the world.

WARREN BUFFETT:  Yeah, I would be concerned if everybody was —

Well, actually the worst thing would be to have a — a really good imitator of any president that came along. I mean, just imagine.

Well, we had that famous thing before, way back in New Jersey where they had the Martians coming and everything like that —

BECKY QUICK:  Oh, War of the Worlds with Orson Welles.

WARREN BUFFETT:  But what you can do —

Well, if you convince people to lend you money when you shouldn’t be borrowing it — I mean — it’s — it’s scary.

And it’s particularly scary when you have nine countries or so with the nuclear weapons and people working on it, it’s something even more —

We haven’t dealt with this. We don’t know what’s going to happen.

BECKY QUICK:  Yeah.

Let’s circle back to Berkshire and the Berkshire of today.

I think I was speaking with you yesterday, or the day before, and we were talking a little bit about Greg Abel and what a nice guy he is. And you said —

WARREN BUFFETT:  He is a terrific guy.

BECKY QUICK:  You said something interesting to me, though, about how you picked him, and it wasn’t because he was a nice guy. (Laughter)

Why did you pick him?

WARREN BUFFETT:  Well, he’s very, very, very smart about businesses.

Incidentally, he’s getting his Canadian — I mean, he’s getting his American citizenship very soon, and he was going over it with me, all the things he had to learn about.

And I’ve actually spent a little time in the past with groups of individuals — of course, my wife did it, too — became an American citizenship — an American citizen.

And the things they have to learn about the Constitution and all these — and they’re usually so proud when they become American citizens.

And I think I — I think I detect in Greg — I mean, you know — that as successful as he’s been in everything else, I mean —

He is — it means something to him to become an American citizen.

And, you know, he said — his young son, you know, and — his son knows more about some of the answers to the questions, you know, that they may get asked or something — (laughs) — about the company —

It’s — it’s really interesting. And where else does that happen in the world? I mean, what people — you know —

America is special. And it’s a miracle what America’s accomplished. It’s just an absolute miracle.

And yet, the miracle and the division of the output and everything is about as inequitable as you can come up with, while at the same time, it’s got these great attractions.

There is some secret sauce. I’ve never been able to define it precisely. But when you run a country for 200 and some years and people want to come here every year, I mean, there’s — there’s something about it.

And when Greg Abel is very — you know, is looking forward to becoming an American citizen, that means something to him.

And you can’t buy that anyplace — (laughs) — or package it, you know?

It won’t work for a Madison Avenue approach, you know, be an American or something like that.

But that — that feeling just goes — in my 95 years, I’ve — I’ve seen it, you know, time after time.

So, I felt — I felt good when I  — Greg just volunteered that in the last day or two to me, that he was — he’s up there for his final exams there pretty soon — (laughs) — on becoming a citizen.

BECKY QUICK:  I didn’t realize he wasn’t a dual citizen already. I knew he was Canadian, but I thought he had dual citizenship —

WARREN BUFFETT:  He doesn’t have a full — whatever the complete citizenship requirement is.

And you can say, why does he care? He’s gotten along fine without it here and everything. He still wants to be a citizen.

BECKY QUICK:  Yeah.

Two hundred and fifty years — we’re celebrating our 250th anniversary.

You pointed out that you’ve been around for 95 of them.

Do you think we have the special sauce that that will continue in this country? Or what do we need to do to preserve that and make sure that it does continue?

WARREN BUFFETT:  Yeah, we’ve got a special sauce — there — a secret sauce.

It’s actually a good secret, that I don’t know what exactly — (laughs) — it is.

But I do know this, that anybody that has a choice would choose to be born in America.

I mean, you know, you can pick some very small, little, country, they’re very happy that they’re —

But, is this — is there any other country that everybody, for a couple hundred years, has wanted to emigrate to? I mean, it —

And it attracted some terrible people, you know, too.

But — but it worked. And they had the mafias and the different groups — not just the Italian Mafia, but — I mean  —  

It wasn’t that they were all — we had some system for picking out the wonderful people from some other countries.

But — it has — and it’s worked, but it’s worked — the extremes to which it works don’t seem to belong to that kind of a society.

I mean, if you were drawing up dreams for the ideal society, and you would have this kind of GDP per capita and everything, you wouldn’t design — you wouldn’t design the — you wouldn’t design the inheritance laws. You wouldn’t — I mean, you’d just do all kinds of things differently.

But somehow it’s worked.

But that doesn’t mean that we can’t do better — I mean — at all.

BECKY QUICK:  You know, Warren, there are thousands of people, shareholders and partners of yours, for decades in some cases, who are sitting out in this arena right now.

And I just wonder if there’s a message you’d like to give to them. Those who have been following you for years and who have been partners of yours for years.

WARREN BUFFETT:  The number one rule I’d give them is just — I’d give them the Golden Rule. (Laughs)

Do unto others as you —

I’m not a religious guy, but, I mean, nobody said it any better in a couple thousand years than that. Which may be why it’s lasted to a certain degree, too, I mean — you know —

More people are reading a two thousand-year-old book about how to behave than anything that anybody’s coming up with lately.

You know, it’s got a lot of — particularly the Old Testament’s — got different kinds of stories to some extent.

But, if the whole world lived by the Golden Rule, it would be such a more wonderful society.

BECKY QUICK:  Do unto others as you’d have them do unto you.

WARREN BUFFETT:  Yeah. And that’s true for everything, from parenthood to being a boss to being all of — I mean, just everything in life.

And it doesn’t cost you anything. In fact, it’s reflected in better behavior toward you. So it means the very selfish sort of thing in one sense.

But I’ve never seen anybody that’s unhappy that behaves that way. And I’ve seen a lot of people in a lot of different kinds of situations.

BECKY QUICK:  Warren, I want to thank you for taking this time to sit down with us today.

Warren Buffett, the chairman of Berkshire Hathaway.