yego.me
💡 Stop wasting time. Read Youtube instead of watch. Download Chrome Extension

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


3m read
·Oct 28, 2024

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.

More Articles

View All
Kinetic energy | Energy | Middle school physics | Khan Academy
Hello everyone! Let’s talk about kinetic energy. Now, “kinetic” might be an unfamiliar word, but it just comes from a Greek word that means “of motion.” So, kinetic energy is energy from motion. Any massive object that is in motion then has kinetic energy…
EXCLUSIVE: Fur Seals Are Back From the Brink on California Islands | National Geographic
The northern fur seal was a top predator in this area, and 150,000 of them were removed from the ecosystem. My name is Jim Teats, and I’m a biologist for Point Blue Conservation Science. I work on Southeast Farallon Island, which is 30 miles west of San F…
Work at a Startup Expo 2019
So thank you so much. Quick round of applause for making it out here for all these companies that we’re going to be having a walk across here. It’s two o’clock, we want to keep it on time because we have a lot of great stuff to get through. So this is wh…
Science Broadens Our Vision of Reality
There are many scientists and philosophers who’ve talked about this concept of a multiverse. But this is a very strict, very sober understanding of what a multiverse is. All of these universes in this multiverse obey the same laws of physics. We’re not ta…
How Much Information?
Have you ever noticed that people speaking Spanish sound like they’re talking really fast? Does this mean they are able to communicate information faster than English speakers? One reason why Spanish sounds so fast is because more syllables are spoken per…
Why Does the Moon Orbit Earth?
Now tell me what does the moon do? Uh, the moon orbits the Earth. I know it. Let’s do an orbit. Can we do an orbit? Okay, so go like this. I’m guessing, I’m guessing around, around. If you will, you spinning it? Are you going to… doesn’t it stay? Isn’t it…