Warren Buffett addresses question on $130 billion cash hoard and potential distributions

At the 2010 Berkshire annual meeting, you said the one question that you would ask of the Berkshire CEO would be about the distribution of cash to shareholders as the Berkshire cash pile grows larger and larger. So, let me ask that question: Do you still feel confident of the future prospects for our over 100 billion dollars in cash on hand, or are we getting closer to cash distributions?

Well, you know, the one thing at Berkshire is that shares are selling for less than we think they're worth. That's a pretty— that could be a pretty big way to distribute cash to the public. What we really like to do is buy great businesses. If we could buy a company for 50 billion, or 75 billion, or 100 billion, we could do it, and we can do it, and our word is good.

It's difficult with a public company because, in effect, if you buy a company, you make the bid and their shareholders vote months later. You're giving an option if we're good for it, and the other guy has a way to top you. All kinds of things—they can get out of it, and you get paid two percent for that or one percent for that. That is not an appropriate price.

On the other hand, Delaware will decide whether they should do it or not, and that's the way the world is. I mean, that's the law. So, it would be easier to do with a private company, and there aren't very many that are big. On the other hand, there aren't very—there's nobody else that can quite make a deal like we can under the right circumstances.

There could be a situation where a number of very decent companies have a very uncomfortable borrowing structure, and money comes due to them at the exact wrong time. That's when they pick up the phone; it’s dead—Tiffany, Harley Davidson, you name it. I mean, a whole bunch of companies—in 2008, that sort of thing will happen again, whether it results in us getting the calls or what the world is exactly at that time.

But the one thing we know is that the number of phone calls that you can make at a time like that is very, very limited. There can be good companies that don't want to sell the company necessarily, but they may just need 5, or 10, or 20 billion dollars, depending on what company you're talking about. That can happen.

Our own shareholders can be selling the stock too cheap, but we'll never do anything to make them feel bad, and we'll tell them the truth about what the business is. But if market circumstances result in us being able to buy in 50 billion of our own stock, we'll buy it.

So we'll see what the world holds, but I don’t think we have the opportunities we used to have. But we've got enough, and we're making money with the things we have. It isn't killing a stall of 130 billion of bills at five percent plus bond-equivalent yields, and everybody says, "Well, yields are going to get out of the future."

I don't have a famous idea what else you're going to do in the future. You know, the prime rate was 21 and a half percent in 1981 or 82 when people were worried that it was going to go totally out of control. Volcker kept it from happening.

But if Volcker hadn't been in there, who the hell knows what would have happened? But, so, we're running Berkshire so that we'll do okay, and maybe we'll do a little bit better than okay. Charlie, okay? Maybe fine.