HIGHLIGHTS 2-Buffett, Munger comments at Berkshire meeting

OMAHA, Neb. Sat May 5, 2012 4:37pm EDT

OMAHA, Neb. May 5 (Reuters) - Following are comments by Berkshire Hathaway Inc Chief Executive Warren Buffett and Vice Chairman Charlie Munger in the afternoon session of the conglomerate's annual meeting of shareholders in Omaha on Saturday.

Highlights from earlier in the day can be found by clicking on:

All quotes are from Buffett unless attributed to Munger.

ON HIS SUCCESSOR AND OTHER MANAGERS

"I virtually know that the successor we have in mind will not be the kind who will turn off our managers because the successor in mind has the culture and the people embedded as I do."

"A majority could retire and wouldn't need to work at all. They're only going to work if it's more fun for them to work than anything else in the world."

ON A TAKEOVER

"Even 10 years from now it is likely that I would own, or my estate would own, 20 percent of the votes or thereabouts."

"I think it's extraordinarily unlikely."

ON VALUING DECLINING BUSINESSES AND BERKSHIRE'S HISTORY

Munger: "They're not worth as much as growing businesses."

Buffett: "We were sort of masochistic in the early days."

Munger: "Ignorant too."

ON APPLE AND GOOGLE VS INVESTING IN IBM

"I would not be at all surprised to see them be worth a lot more money 10 years from now but I would not buy either one of them."

"I sure as hell wouldn't short them either."

"The chances of being way wrong in IBM are probably less, at least for us, than the chances of being way wrong in Google or Apple."

ON CHINESE EXPANSION INTERNATIONALLY

Munger: "I can't pronounce them but they've got some very great companies."

ON COORDINATION WITHIN BERKSHIRE

"We're the most uncoordinated pair of individuals."

"There are certainly some people within Berkshire who have some contact with other people in Berkshire but there's nothing in the way of an organized way of doing that."

ON $20 BILLION AS A MAGIC NUMBER FOR CASH HOLDINGS

"There is no magic number."

"We think about worst cases all the time and we add on a big margin of safety. We don't want to go back to 'Go.'"

ON FANNIE AND FREDDIE AND THEIR CONSERVATORSHIP

"It's important that you have a market that does minimize costs for borrowers that have an adequate down payment."

"They will stay there in my view until politically we get some kind of resolution on a future policy that both parties can go along with and it looks to me like that's a long ways off."

ON RAISING PORTFOLIOS OF INVESTMENT MANAGERS TODD COMBS AND TED WESCHLER BY $1 BLN EACH TO $2.75 BLN EACH

"With both Todd and Ted, Charlie and I were struck not only by a good record but by intellectual integrity, quality of character, a real commitment to Berkshire." Buffett later added that Combs did "substantially better" than the S&P 500 last year.

ON WHAT IT WILL TAKE TO RETURN TO 4 PCT ECONOMIC GROWTH

Munger: "A lot."

"It's nice to have 4 percent in real terms but 2.5 percent, it may be slow in getting us out from the slump  but it's a remarkable rate of growth for a country that already enjoys a high standard of living."

ON GIVING TO SUPERPACS

"No I won't. I wish it never happened, I wish Citizens United never happened."

"The idea that I should toss $10 million into some SuperPAC that will spend its time misleading people about its opponent  I don't want to see democracy going in that direction."

Munger: "I remember when we did the Marshall Plan with bipartisan support. That's the kind of world I'd rather have."

ON MAKING MISTAKES

"We've made mistakes, we'll make more mistakes."

"On the other hand we have a natural instinct to do things big, both of us."

"The idea of learning from mistakes - the next mistake is something different."

ON CHINESE AUTOMAKER BYD

Munger: "The car market in China is a huge market and they happen to be located in China, so that's their main focus. I think the first cars they bring here will be for fleets in California."

ON SOVEREIGN DEBT

"The nice thing about sovereign debt is they cannot pay you at the end and you can't grab anything from them"

"I don't know how it plays out in Europe. We have seen the ECB here recently give $1 trillion to banks which are loaded with sovereign debt which really is questionable in many cases."

"It's like giving a guy with a margin account with perhaps some bad assets in it even more money to play with."

"I would much prefer a world that was getting its fiscal house in order including in the United States."

"I would stay away from medium- or long-term government bonds, our own or those of other countries."

ON TAXES AND OTHER COSTS

"If you ask me about the tapeworm of American industry, it's our medical costs."

Munger on a value added tax: "I think it's going to come eventually and probably should."

Munger: "I think it's quite logical to tax consumption."

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Comments (3)
Were every CEO as honest and forthright as Buffett, I would rest much easier about the fate of the United States. Given the ruthless greed-driven philosophy of multinational capitalism and its utter amorality, it’s nice to have at least one figure that I can trust.

May 05, 2012 4:03pm EDT  --  Report as abuse
wmbutler wrote:
Some other funny quips:

Munger: I probably have more prostate cancer than he [Buffett] does.

Buffett: My secretary was getting all the attention so I decided to throw the spotlight back on myself.

Munger: We’ve been amazingly fortunate. The good news is that the fortune is not going to go away after Warren dies.

Awesome meeting!

May 05, 2012 7:08pm EDT  --  Report as abuse
WillBrettCom wrote:
Look at all the positive publicity (PR) about Buffet that will be spread on the web at no cost to stockholders. Please go to Yahoo and search for: “YahooCEO and Company”. Look at positive publicity (PR) about Yahoo that investors are getting.

May 07, 2012 8:15pm EDT  --  Report as abuse
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