And I also want to report that your vice chairman is getting new social distinction.

I've been invited during this gathering to go to a happy hour, put on by the Bitcoin people.

And I've tried to figure out what the Bitcoin people do in their happy hour.

And I finally figured it out.

They celebrate the life and work of Judas Iscariot.

Is your invitation still good?

I finally figured out why the teachers of corporate finance often teach a lot of stuff that's wrong.

When I had some eye eye troubles very early in life, I consulted a very famous eye doctor and I realized that his place of business was doing a totally obsolete cataract operation.

They were still cutting with a knife after better procedures had been.

And I said, why are you in a great medical school?

Performing absolute obsolete operations?

He said, Charlie, it's such a wonderful operation to teach.

Well, that's what happens in corporate finance.

They get these formulas and it's a fine teaching experience.

You give them a formula, you present the problem, they use the formula.

It's, you get a real feeling of worthwhile activity.

There's only one trouble it's all balderdash.

Yeah.

Whenever you hear a theory described as elegant, watch out in a Charlie and I were on a plane recently that was hijacked with what was hijacked.

I'm telling about our experience on that hijacked plane when the hijackers picked us out as the two dirty capitalists that they really had to execute.

And, but they were, they were a little abashed about it.

They didn't really have anything against us.

So they said that each of us would be given one request before they shot us.

And they turned to Charlie and they said, what would you like as your request?

Charlie said, I would like to give once more my speech on the virtues of Costco with illustrations.

And the hijacker said, well, that sounds pretty reasonable to me.

And he turned to me and said, and what would you like Mr Buffet?

And I said, shoot me first.

Yeah.

Well, well, Costco of course, is a, a business that became the best in the world in its category.

And it did it with an extreme meritocracy and an extreme ethical duty, self imposed to take all its cost advantages as fast as it could accumulate them and pass them on to the customers.

And of course, that created a ferocious customer loyalty and, and uh it's been a wonderful business to watch and of course, strange things happen when you, when you do that and do that long enough, Costco has one store in Korea that will do over 400 million in sales this year.

These are figures it can't exist in retailing, but of course they do.

And so that's an example of, of somebody having the right managerial system, the right personnel selects the right ethics, uh the right diligence and et cetera, et cetera.

That is quite rare.

And if you, if once or twice in a lifetime, you're associated with such a business, you're a very lucky person.

And the more normal business is a business like, say General Motors, which became the most successful business of its kind in the world and wiped out its common shareholders.

What last year?

That is a very interesting story.

And if I were teaching a business school, I would have value line type figures that took people through the entire history of General Motors.

And I would try and relate the changes in the graph and in the data to what happened in the business.

And to some extent they faced a really difficult problem, heavily unionized business combined with great success and very tough competitors who came up from Asia and elsewhere and to some extent from Europe.

And that is a real problem which of course, to prevent wealth from killing you.

Your success turning into a disadvantage is a big problem in business.

And so there are all these wonderful lessons in those in those graphs and I don't know why people don't do it.

The graphs don't even exist that I would use to teach.

I can't imagine anybody being dumb enough not to have the kind of graphs I yearn yearn for.

But so far as I know there's no business in the school in the country that's yearning for these graphs.

Partly the reason they don't want it is if you taught a history of business this way, you'd be trampling on the territories of all professors and sub disciplines, you'd be stealing some of their best cases and the, and the bureaucracies, even academic bureaucracies, people protect their own turf.

And of course, a lot of that happened in general.

Motors Nick.

Yeah, it's a, I really think the world that's the way it should be taught.

Harvard Business go once taught it much that way.

And they stopped and I'd like to make a case study as the way they stopped.

I think I can suc success.

I think I can successfully guess.

It's that, of course, in history of business trampled on the territory of barons of other disciplines.

Like the baron of marketing, the baron of finance, the baron of whatever.

And, uh, listen, IBM is an interesting case.

I mean, there's just one after another that are utterly fascinating and I don't think they're properly taught at all because nobody wants to do the full sweep.

Yeah.

The one place that I feel we're making a huge mistake is not learning enough from the big mess that came from wretched excess in our financial system.

I don't think we've throttled the sin and folly out of that aspect of the economy nearly enough.

And I think if you look at all the panics and depressions of the United States, they all came from financial collapses, usually preceded by perfectly asinine greedy behavior.

And I think there would be a lot to be said for taking no an ax to our financial sector and whittling it down to a more constructive size.

Well, tell us more about how you use that ax.

Well, Warren, I'll make myself ridiculous, but I guess I'm so old.

I'm entitled to do that.

I would have the tax system discourage trading.

I would have various kinds of Tobin taxes.

I would have securities trading more with the frequency of real estate than the trading with computer algorithms were one person's computers, outwit another person's computers and what amounts to sort of legalized front running.

I don't think we need any of that stuff and I think making heroes out of the people who succeed at it is not good for the fiber of the country either.

I hate the idea that 25% of our best engineers are going into the financial sector.

So I think it's crazy what we've allowed and I think the lack of contrition in our financial sector after the disgraceful stuff they got us into is perfectly awesome.

It makes Dave soga look like a hero.

He's getting warmed up.

Yeah, just as a sidelight, you know, how many of, you know, that if you train an S and P future contract, uh, 500 S and P 500 contract and you hold it for 10 seconds and you have a profit that 60% of the gain is long term gain and 40% is short term gain.

So, our congress has said that this activity should be more lightly taxed, you know, than cleaning washrooms or, or doing all the things that you people do every day that uh you get a special tax treatment.

Now that illustrates one of the problems with the tax code and that there's a few people that care intensely about having that in there.

And the cost of it in terms of less revenue for the US government is diffused among a large group, none of whom have enough interest to want to go out and write their congressmen or hire a lobbyist to fight the other way.

But it's pretty extraordinary that, uh, we have decided that that particular form of activity should, uh, should get 60% taxed at a 15% maximum rate even though it may only take 10 or 20 seconds and be just a little flicker on the screen.

And the hedge fund operators of America get a much lower tax rate than the professors of physics or the drivers of taxis.

This is demanded the mistakes that have been most extreme in Berkshire's history are mistakes of omission.

Uh They don't show up on our figures.

Uh, they show up in opportunity costs.

In other words, we, we have opportunities, we almost do it.

In retrospect, we can tell that we were very much mistaken not to do it in terms of the shareholders.

Those are the ones in our history that it really cost the most and very few management.

Uh, uh, do much thinking or talking about opportunity costs.

But Warren, we have blown billions and billions and billions.

I might as well say it.

You're right.

Right.

Yeah.

My question is not about money.

It's about friendship.

How do you remain friends and business partners for so long?

And what advice do you have for young people like me in selecting true friends and future business partners?

Thank you.

No one.

But when Charlie and I met in 1959 we were introduced by the Davis family and they predicted that within 30 minutes, we would either not be able to stand each other or we would get along terrifically.

And uh uh that was a fairly insightful analysis actually by the davises.

Uh uh because you had two personalities that both had some tendencies to dominance in certain situations.

And uh but we just, we hit it off.

We, we have disagreed but we, uh we have never had an argument that I can remember at all in 43 years.

And uh uh and yet we both have strong opinions and they aren't the same strong opinions at times.

But the truth is we've had an enormous amount of fun together.

We continued to have an enormous amount of fun and, uh, nothing will change that.

Basically.

It, uh, uh, it may have worked better because he's in California and I'm in Almo.

I don't know.

I'll let Charlie comment on it.

Well, that's a wonderful question you've asked because Warren and I both know some very successful businessmen who have not one true friend on earth and rightly so that's true.

Um That is no way to live a life.

And if, if, if, by asking that question you're asking, how do I get the right friends?

You are really on the right question.

Uh And when you get with the right friends, if you've worked hard at becoming the right sort of fellow, I think you'll recognize what you have and then all you have to do is hang on the real question.

What question is, what do you like in other people?

I mean, what do you want from a friend?

And if you think about it, there's certain qualities that you admire in other people that you find likable that you and, and, and, and cause you to want to be around uh certain people and then look at those qualities and say to yourself, which of these, is it physically or mentally impossible for me to have?

And the answer will be none.

You know, I mean, you, it's only reasonable that if certain things attract you to other people that if you possess those, they will attract other people to you.

And secondarily if you find certain things repulsive in other people, whether they brag or they're dishonest or whatever it may be that turns you off, it's gonna turn other people off if you possess those qualities and those are choices, you know, very few of those things, uh, you know, are in your DNA, they, they are choices and, and they are also habits.

I mean, if you, if you have habits that attract people early on, you'll have them later on.

And if you have, uh, habits that repel people, you're not gonna cure it when you're 60 or 70.

So, it's, it's, it is not a complicated equation.

And as I remember Ben Franklin did something like that one time, didn't he list the qualities he admired?

And then just how to acquire them.

He went out of the way you've gone after acquiring money.

Ok.

They're not mutually exclusive.