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  • And now one of the most respected investors in America

  • is going to tell you about his secrets.

  • "Warren Buffett." It's the sound of money.

  • $9.2 billion... Billionaire investor Warren Buffett,

  • the second richest man in America.

  • He's estimated to be worth about $62 billion.

  • That makes him the richest man in the world.

  • ♪ ♪

  • You know, Buffett is not exactly what you might expect.

  • Even though he's in the money business,

  • he doesn't even own a calculator or a computer.

  • He takes the long view,

  • and it's made him billions, many billions.

  • Maybe you can beat the house,

  • but I don't think you can beat Warren Buffett.

  • Buffett filed his first tax return at 13 years old.

  • But he's no average billionaire, Tom.

  • No, he certainly isn't, Matt.

  • He's a $44 billion average Joe.

  • Warren Buffett has an approach

  • that doesn't make him very popular with his fellow billionaires.

  • Warren Buffett, the boy from Nebraska

  • who grew up to become the Wizard of Omaha.

  • What was it about him that allowed him to become

  • the richest man in the world? How did he do it?

  • ♪ ♪

  • 70 years ago, I was in high school.

  • Almost a third as long as the country has been around.

  • And when I was in high school,

  • I really only had two things on my mind...

  • girls and cars.

  • And-- and I wasn't doing very well with girls,

  • so we'll talk about cars.

  • But lets just imagine that when we finish,

  • I'm going to let each one of you pick out the car of your choice.

  • Sounds good, doesn't it?

  • Pick it out, any color, you name it,

  • it'll be tied up with a bow, and it'll be at your house tomorrow.

  • And you say, "Well, what's the catch?"

  • And the catch is...

  • that it's the only car you're going to get in your lifetime.

  • Now what are you going to do, knowing that that's the only car

  • you're ever going to have and you love that car?

  • You're going to take care of it like you cannot believe.

  • Now what I'd like to suggest

  • is that you're not going to get only one car in your lifetime,

  • but you're gonna get one body and one mind,

  • and that's all you're going to get.

  • And that body and mind feels terrific now,

  • but it has to last you a lifetime.

  • I'm on the way to the office.

  • It's all of a five-minute drive.

  • Been doing it...

  • for 54 years.

  • One of the good things about this five-minute drive

  • is that on the way there's a McDonald's, so I'll pick up something.

  • Good morning, thank you for choosing McDonald's.

  • Go ahead and order whenever you're ready.

  • I'll have a Sausage McMuffin with egg and cheese.

  • Anything else? That's it, thank you.

  • Yeah, and I tell my wife as I shave in the morning,

  • I say either $2.61, $2.95, or $3.17,

  • and she puts that amount in a little cup by me here

  • and that determines which of three breakfasts I get.

  • Hi. 2.95. Okay, 2.95.

  • There's the two. How you doing, sir!

  • Hey, great! You're on "Candid Camera"!

  • I see. Hello, everybody!

  • When I'm not feeling quite so prosperous,

  • I might go with a 2.61, which is two sausage patties,

  • and then I put 'em together and pour myself a Coke.

  • Hi, how are you? Hi. I've been good.

  • 3.17 is a bacon, egg, and cheese biscuit,

  • but the market's down this morning,

  • so I think I'll pass up the 3.17 and go with the 2.95.

  • ♪ ♪

  • I like numbers.

  • It started before I could remember.

  • It just felt good, working with numbers.

  • I was always playing around with numbers in one-way or another.

  • And it was fun to have a bunch of guys over

  • and have them betting on which marble would reach the drain first.

  • I had a lot of energy as a kid.

  • I-- I was inquisitive, and I was the youngest one

  • always in the class, 'cause I'd skip.

  • I've always been competitive.

  • I liked to read more than most kids.

  • I really like to read a lot.

  • My Aunt Edie gave me a copy of "The World Almanac"

  • and that was heaven to me.

  • And I can still tell you that Omaha's population was 214,006 in 1930.

  • Some numbers just kind of stick with you.

  • And very early, probably when I was seven or so,

  • I took this book out of the Benson Library

  • called "A Thousand Ways to Make a $1,000."

  • And one of the ways in this book

  • was having penny weighing machines.

  • And I sat and calculated how much it would cost

  • to buy the first weighing machine,

  • and then how long it would take for the profit

  • from that one to buy another one, and I would sit there

  • and create these compound interest tables

  • to figure out how long it would take me to have

  • a weighing machine for every person in the world.

  • I had everybody in the country weighing themselves ten times a day,

  • and me just sitting there like John D. Rockefeller of weighing machines.

  • The allowance when I was a little boy was a nickel a week,

  • but I liked the idea of having a little more than a nickel a week to work with,

  • and I went into business very early.

  • I started selling Coca-Cola door to door.

  • I sold gum door to door.

  • I sold "Saturday Evening Post,"

  • "Liberty" magazine, "Ladies Home Journal," you name it.

  • I think I enjoyed the game almost right from the start.

  • But I like being my own boss.

  • That's one thing I liked about delivering papers.

  • I could arrange the route I wanted.

  • Nobody was bothering me at 5:00 or 6:00 in the morning.

  • I was delivering 500 papers a day,

  • and I made a penny a paper, but in terms of compounding,

  • that penny's turned into something else.

  • ♪ ♪

  • Einstein is reputed to have said that "Compound interest

  • is the eighth wonder of the world" or something like that,

  • and it goes back to that story you probably learned when you were in grade school

  • where somebody did something for the king,

  • and the king said, "What can I do for you?"

  • And he said, "Well, lets take a chessboard

  • "and put one kernel of wheat on the first square

  • "and then double it on the second

  • and double it on the third."

  • And the king readily agreed to it, and by the time he figured out

  • what two to the 64th amounted to,

  • he was giving away the entire kingdom.

  • So it's a pretty simple concept, but over time,

  • it accomplishes extraordinary things.

  • Berkshire is an amazing company.

  • Fourth largest company in the "Fortune" 500.

  • He is the only person who has ever, from scratch,

  • built a company that is in the top 10 of the Fortune 500.

  • Berkshire Hathaway. Fine, thank you.

  • Well, Berkshire is a holding company of sorts.

  • It owns a large number of separate businesses

  • that operate independently of each other

  • and, to a great extent, from the parent company, Berkshire Hathaway.

  • All right, well, we're going to get more from you in a second.

  • So we have maybe 70, maybe 80 businesses,

  • and we ask them to behave in a way

  • that doesn't hurt our reputation

  • at Berkshire Hathaway, but they run their own lives.

  • Other people do most of the decorating in the office, so various things come in.

  • Originally, when I moved in in 1962...

  • you can see this--

  • I went down to the South Omaha Library,

  • and I think for a dollar, I got seven copies

  • of old "New York Times"

  • from big times like the Panic of 1907.

  • This is one-- 1929 obviously.

  • But I wanted to put on the walls

  • days of extreme panic in Wall Street,

  • just as a reminder that anything can happen in this world.

  • I mean it--

  • it's instructive art you can call it.

  • ♪ ♪

  • I was born in 1930 here in Omaha, Nebraska,

  • during the stock market crash.

  • My dad lost his job in 1931, a year after I was born.

  • He was a stock salesman,

  • and he had what little savings he had in the bank,

  • and so he started his own company.

  • He worked right through the depression.

  • ♪ ♪

  • He had an investment company,

  • and as an adult when I looked back,