2020 Berkshire Hathaway Annual Meeting (Full Version)

Well, it's uh, 3:45 in Omaha and this is the annual meeting of Berkshire Hathaway. Uh, it doesn't look like an annual meeting; it doesn't feel exactly like an annual meeting. And it particularly doesn't feel like an annual meeting because uh, my partner of 60 years, Charlie Munger, is not sitting up here. And I think most of the people that come to our meeting really come to listen to Charlie. But I I want to assure you Charlie, at 96, is in fine shape. He uh, his mind is as good as ever; his voice is as strong as ever. But it just didn't seem like a good idea to have him uh, make the trip uh, to Omaha for this uh, meeting.

Uh, Charlie uh, Charlie is uh, really taking to this new life. He's added Zoom to his repertoire, so he has meetings every day with various people, and he's just skipped right by me technologically. But uh, that really isn't such a huge achievement; it's more like, you know, kind of like stepping over a peanut or something. But nevertheless, I want you to share it, Charlie is in fine shape and he'll be back next year. And we'll uh, we'll try to have everything in the show that we normally have next year.

Uh, G Jane also, who's the vice chairman in charge of insurance safely in New York, and again it just did not seem worthwhile for him to travel to Omaha for this meeting. Uh, but on my left we do have Greg Abel, and Greg is the vice chairman in charge of all operations except insurance. So Greg manages a business that has more than 150 billion in revenues and crosses dozens of industries and has more than three hundred thousand uh, employees. And uh, he's been at that job a couple of years, and frankly, I don't know what I'd be doing today if I didn't have a cheating Greg uh, handling the duties that uh I was doing only about a quarter as well a couple of years ago. So I owe a lot of thanks to Greg, and you'll get exposed to him more as this meeting goes along.

The meeting will be divided into four parts. In a moment or two, I will uh, I will talk uh, the sort of a monologue with slides. I've never really used slides before; I've taught college classes intermittently but pretty steadily from age 21 to age 88, and I've never recalled using a single slide. But uh, you know, who says you can't teach an old dog new tricks? So we'll see whether you can or not.

Uh, and I've got a number of slides and I would uh, like to take you through those in the first section, which will start in just a minute. Uh, and then we'll move on to uh, the brief recap of Berkshire's first quarter results. Now we put those up in the 10-Q which was posted on the internet at Berkshire Hathaway.com this morning. And there's lots and lots of detail in there, so I'm not going to go through that. I'll just have, I'll point out one or two things that may be of interest to you and actually I'll talk a little bit about what we did in April, which uh, is something that is new to Berkshire to uh, be that current, but uh I'll give you that.

Then we'll have the um, the formal meeting, which will take maybe 15 or 20 minutes. And from there we'll go to Becky Quick, who for a couple of hours will grill me and Greg on uh, questions she's selected from a huge batch that I'm told she's received. They went to Carol Loomis and Andrew Ross Sorkin as well as the Becky, but to simplify things we've consolidated all those questions and uh, like I say we'll go for a couple of hours, and there's no specified cut off time. Uh, we'll just see how things develop.

Uh, now what's of course on everybody's mind the last uh, two months or so uh, is you know what uh, what's going to be the situation on terms of health in the United States and what's going to be the situation in terms of the economy in the United States in the months and perhaps the years to come? And uh, I don't really have anything to add to your knowledge on health. I, in school, I did okay in accounting but I was a disaster in biology, and uh, I'm learning about these various matters the same way you are. And I think, uh, personally, I feel extraordinarily good about being able to listen to Dr. Fauci, who I never heard of a year ago. But I think we're very, very fortunate as a country to have somebody at 79 years of age who appears to be able to work 24 hours a day and keep a good humor about him and communicate in a in a very, very straightforward manner about fairly complex subjects and tell you when he knows something and when he doesn't know something.

So, I'm not going to talk about any political figures at all or politics generally, uh, this afternoon. But, uh, I do feel that I owe a huge debt of gratitude to Dr. Fauci for educating and informing me, uh, actually along with my friend Bill Gates too, uh, as to what's going on. And I know I get it, I get it from a straight shooter when I get it from either one of those. Uh, so thank you, Dr. Fauci.

Uh, when this hit us, and as I sat here in this auditorium with 17 or 18 thousand empty seats, um, the last time I was here, was absolutely packed. Uh, Creighton was playing Villanova and there were 17 or 18 thousand, whatever it holds. It was full, and there wasn't one person in that crowd, this was in January, there wasn't one person in that crowd that didn't think that uh, that March Madness wasn't going to occur.

And it uh, it's been a flip of the switch in a huge way in terms of national behavior, uh, the national psyche that's dramatic. And when we started on this journey, which we didn't ask for, uh, seemed to me there was an extraordinarily wide variety of possibilities on both the health side and on the economic side. I mean it was in other words Defcon five on one side and Defcon one on the other side, and nobody really knows, of course, all the possibilities that there are and they don't know what probability factor to stick on them. But in this particular situation it did seem to me that that there was an extraordinary range of things that could happen on the health side and an extraordinary range in terms of the economy.

And of course they intersect and affect each other, so they're bouncing off each other as you go along. Uh, and I would say again, I don't, I don't know anything you don't know about health matters. But I do think the range of possibilities has narrowed down some in that respect. We know we're not getting a best case, and we're not getting a worst case.

Uh, the possibility initially of the virus was hard to evaluate, and it's so hard to evaluate. There's a lot of things we've learned about, a lot of things we know we don't know. But at least we know what we don't know. And some very smart people are working on it and we're learning as we go along. But uh, the virus obviously was very transmissible and it's but on the good side, and then it's not, it's not that good, but it is not as lethal as it might have been. We had a Spanish flu in 1918 and my dad and four siblings and his parents went through it, and they have the terrific story in the March 15th edition of the Omaha World Herald that you can go to Walmart.com and look up. It's also on the first page, I believe, on Google if you put in "Spanish Flu Omaha."

And during that particular time, uh, for maybe four months or so, uh, Omaha had 900 and 74, I believe this and that was a half of one percent of the population. Uh, and that figure wasn't greatly different than around the country. So if you think about half of one percent of the population now, you're talking a million seven or thereabouts people. And unfortunately in terms of the worst case, this does not appeared to uh, in fact, I think you can almost rule about it being as lethal as the Spanish flu was. But uh, it's very, very transmissible and of course we have the problem, we don't know the denominator in terms of exactly how many people may be one is because we don't know how many people have had it and didn't know they had it.

Uh, but in any event the range of probabilities on health have narrowed down somewhat I would say. The range of probabilities or possibilities on the economic side are still extraordinarily wide. You know, we do not know exactly what happens when you voluntarily shut down a substantial portion of your society. Uh, in 2008-9, our economic train uh, went off the tracks. Uh, and there were some reasons why the roadbed was weak in terms of the banks and all of that sort of thing. But anyway, this time we just pulled the train off the tracks and put it on a siding.

And uh, I don't really know of any parallel terms about very, very well the most important country in the world, most productive, huge population in effect sidelining its economy and its workforce and uh obviously and unavoidably creating a huge amount of anxiety and changing people's psyche and causing them to somewhat lose their bearings in some many cases understandably. Uh, this is quite an experiment and we may know the answer to most of the questions reasonably soon but we may not know the answers to some very important questions for many years.

So it still has this enormous range of possibilities but even facing that I would like to talk to you about haha the economic future of the country because I remain convinced as I have, I was convinced of this, uh, World War II, I was convinced of it during the Cuban Missile Crisis, 9/11, the financial crisis that uh, that nothing can basically stop America. And uh we faced great problems in the past and face this exact problem. In fact, we haven't really faced any that quite resembles this problem. And uh but we faced tougher problems and the American miracle, American magic has always prevailed and it will do so again.

And I would I would like to take you through a little history, uh, to essentially make my case that if you were to pick one time to be born and one place to be born and you didn't know what your sex was going to be, you didn't know what your intelligence would be, you didn't know what your special talents or special deficiencies would be, that if you do that one time, you would not pick 1720, you would not pick 1820, you would not pick 1920. You'd picked a day and you would pick America.

And of course the interesting thing about it is that ever since America was organized in 1789, when George Washington took the oath of office, uh people that wanted to come here can you imagine that man for 231 years, there's always been people that have wanted to come here. Now, uh my friend, uh I think has jumped on just a shade I'm putting up slides, what about, but I'm going to call from some slides as we go along. But the interesting thing about this country is what is on slide one, let's put it up. And uh, this is an extraordinarily young country.

Now I'm comparing it to a couple of guys that are pretty old but when you think about the fact that my age, Charlie's age, or our life experience and then we'll throw in this young guy over here, Greg Abel. If our life experiences combined exceed the life of the United States, we are a very, very young country. But what we've accomplished is miraculous.

Now just think of this as a little spot in history and and if we'll go to slide two, uh I've tried to estimate, uh, well, let's go back and stay with slide two but the population in 1790 and we had 3.9 million people here. Uh incidentally, when you look up census figures you find out that the they had a big fire in the Department of Commerce building in 1921 so they lost a lot of the Census records so these are not quite as, uh there's some things where there's a few gaps. But there were 3.9 million people in the United States and actually uh, I've got it 0.6 million, it's closer to 0.7 million. There were 700,000 of those people were slaves at the time but those 3.9 million people were one half of one percent of the population of the planet.

Uh and if you'd asked any of those 3.9 million people, any of them to imagine what life would be like 231 years later, even the most optimistic person, and let them, they could have been drinking heavily and even had a little pot and they still could not in their wildest dreams have thought that in three lifetimes, Charlie's, mine and Greg's, that in that period you would be looking at a country with 280 million vehicles shuffling around us, roads, airplanes, maybe not today so much but they'll be back again and they're buying people at forty thousand feet coast to coast in five hours.

The great universities would exist in one state after another. Great hospital systems and entertainment would be delivered to people in a way nobody could have dreamed of, uh, in 1790. This country in 231 years has exceeded anybody's dreams that, uh, I went to the internet and trying to prepare for this and uh I tried if you'll move to the next slide. I tried to find out what was the wealth of the country in 1790, 1789, our starting point, and I punched in "United States wealth." I tried 1789, tried 1790; I thought it might be a little easier, for the terms of around year. And uh, I think four million or so references came up, and I didn't look at all four million. But I can tell you the data collection in those early days on many fronts, ah, was not any of our mind today.

Uh, you really can't, uh, you can't find but I would consider, uh, reliable figures. You can find out how many mules there were in the country and a few things like that and then trying to add them up. But in real estate, uh, you know, when you're looking at houses or apartment houses or office buildings that, you know, they're each slightly different than each other. But they looked comparable sales. So, uh, it's hard to find a lot of countries that have been sold where the wealth has been, uh, estimated.

But it was interesting to go back and think about the fact that, yeah, then 1803 we purchased for 15 million dollars. We made the Louisiana Purchase. Now that's a little later than 1789, but that's the best comp, as they say in real estate, that's the best comp we could find for land mass anyway. And when we purchased, uh, made that purchase that was equal incidentally to about a quarter, about eight hundred thousand plus square miles, but it was about a quarter of what the lower 48 states now contained.

So we bought about a quarter of the lower 48 for this 15 million dollars back in 1803. And if you live in Texas and your grandfather, uh, is close to dying and he calls, he calls the um, grandchildren around him and in his final words he always does don't sell the mineral rights. Well, the French told us the mineral rights on that 15 million dollar deal as well. So we we got uh, that whole strip there, we got all of Kansas and essentially all of Oklahoma, and they produced 21 billion barrels of oil for us, a lot of natural gas, uh, since the purchase.

One of the sidelines is that we paid our 15 million for the Louisiana Purchase. We paid 3 million of it, 20% of it, we paid with 200,000 ounces of gold valued at 15 bucks an ounce. And uh, that three millionth of the French took and we got South Dakota as part of the Louisiana Purchase and the home state mine up there before it closed produced well over 40 million ounces of gold and uh, 40 million ounces of gold comes to about 60 billion dollars worth.

And uh, like I say, we twenty two hundred thousand ounces took care of 20%, uh, 20 of our purchase price. So the Louisiana Purchase was a bargain but it's what the going price was for 800,000 square miles I guess at the time and uh, three cents an acre. And so I decided by playing around with various numbers such as that that as a, that's a reasonable estimate of the worth of the country, uh, 1789, a billion was not a crazy figure.

Now if I'd been a knack of a mission or something I would have put a billion, 107 million, 400 or something like that or I, it's uh I would have made it look respectable but it's a wild guess but it's not a crazy figure. So what has happened? Uh, let's move on to the next slide to the wealth of that country since then. And here we have some figures that come up pretty regularly. Well, they do come out regularly where the Federal Reserve estimates the net household worth of people in the United States, all all the households in the United States and you can look these up and you'll you'll see that you know there's 30 trillion of stocks and and uh, I think maybe single family homes whatever there's 82 million or so occupied single families and maybe 45 million rental apartments and so on. So you start adding all these up and uh, the Federal Reserve tells us and I invite you to look at the that it's kind of interesting that we now in the United States, 231 years later, we have a hundred trillion. We have more than 100 trillion of household wealth even though the stock market's gone down somewhat uh since the last quarterly report.

So you say, well, uh, you know, we've got a lot of inflation and everything. Uh, we actually in the United States for the first half of our existence roughly we didn't really have that much inflation. Uh, we had inflationary periods and deflationary periods but the general price level did not change that dramatically. But I will assume again for this calculation that that there's been 20 for one inflation that's way less than that in many commodities but but it's very hard to to measure and talk about equivalent benefits from different kinds of products and so on and costs. But I I think it's reasonable to say that the United States in real terms has increased in wealth that's something in the area of 5000 for one, which is really, it's mind-blowing, 5,000 for one in real terms in a country that had a half a percent of the had a bunch of raw land but a vision that uh to accomplished that in 231 years.

There's just no denying that that let's be beyond what anybody could have dreamed earlier but it was not done and this is important because we've now hit a bump in the road. It was not done without some very, very serious bumps in the road. It was not 231 years of steady progress. And matter of fact uh, we had been in um, the uh, in this birth of this country, we then went into it seventy two years and if we go to the next slide uh 1861 we now had about 31 million people with the 1960 census showed around 31 million people or thereabouts uh in the country and four million of them were slaves and we had never really resolved the very much unfinished business of what was involved in compromises in 1789, and we'll have more to say about that later.

But uh, we had something but that not too many countries experience and if you told people in 1789 that in 17 and 72 years you were going to have a division that caused the president of the United States at Gettysburg to say that uh testing whether that Nation or any Nation so conceived and dedicated can long endure. Imagine the president United States wondering aloud whether the country that he was presiding over could long endure only 72 years or 74 years at Gettysburg. Uh, uh had taken place.

So all this marvelous dream was being played out. Ah, roughly a third of the way through it we face this this really moment of decision and we we entered into a contest that uh, if we'll go to the next slide I made an estimate then literally killed roughly six percent of the males in the country who were between 18 and 60. I'm assuming that there were more than 600. thousand deaths in the war and uh, I think it's a reasonable estimate that that uh, that 18 to 60 group was a males were but by far the great proportion. So imagine six percent of your working prime age uh, males in the country are wiped out in four years.

So when we look at the progress of this country then we think of our own problems now, uh I just uh ask you to ponder and we'll move to the next slide that would be equivalent today to having four billion males that been in that same age group similarly wiped out. Uh, um so that was one incredible interruption which this country nevertheless huh worked through while compiling this American Dream that was one of the Wonders of the World perhaps the one heard of the world in many senses.

So uh, let's move on to the another crisis of a different sort that hit the country and this of course is the 1929 crash which led to the Great Depression. And um, here um, the Dow Jones average which we'll use through this at that time, that's the one everybody paid attention to, actually the second most important average at that time if you look at the papers was the New York Times average which has disappeared. And of course the standard and pores has probably in regardless as a superior uh, yardstick but the Dow Jones was a perfectly added but yardstick and on September 3rd, 1929 the Dow Jones average closed it 381, 17 and people were very happy and buying stocks on margin had worked wonderfully in the Roaring 20s.

Had a good feeling to it with the auto coming of age and the day of air travel coming along and all kinds of new appliances in the telephone getting wider use believe it or not it hadn't really uh caught on that much uh prior there too. But the movies were coming on. The it was a happy place and then of course it will move to the next slide we'll look at what happened in the couple of months after September 3rd and the Dow Jones average uh almost got cut in half and that was pretty impressive until we had this recent situation where in a shorter period of time we lost about a third but the the crash and there's a great book about it called the Great crash by John Kenneth Galbraith.

Let me interject one little plug here. Uh, there's a a small business an online. I I hate what truncating this meeting or change you can so dramatically has done to many of the businesses and all because I think small business is beneficially we're the beneficiaries of of a really um uh they got a lot of business for the Berkshire meeting and they're going to get it in the future but but they suffer during a period like this and they just had a story about the book one. Well The Bookworm, if you buy any books that come out of anything I recommend uh, think about just putting Bookworm, Bookworm and online and uh, the great crash is a wonderful book and John kind of Galbraith describes it.

Um, but I would like to get into a bit of a personal note uh which will have some relevance, not too much, but some relevance uh to the uh the story of the Great Depression because uh, uh in 1929 my dad who was 26 years of age then, uh I was employed as a security salesman by a local small Bank. And uh, he sold stocks and bonds but he mostly sold stocks. And when stocks fall 48 percent and you were selling them to people a few months ago uh, you really don't feel like going out and facing those same people. So I think my dad uh probably I'd like to do is they say now shelter in place which means stay at home.

And uh, there really wasn't that much in our house. Uh, we just had a small yard, it was winter time anyway. My dad wouldn't have been puttering on the yard anyway and it really wasn't, you know the television wasn't there and uh, and he and my mother got along very well. So under those conditions if you'll turn to the next slide, uh, I was born about nine months later. So but at that time uh, I was actually born on August 30th but the stock market was closed that day and so I'm using the previous day figures but the it wasn't I didn't notice at the time that the market was closed but the stock market had actually recovered over 20 percent during that nine and a half month period or thereabouts.

Uh, people did not think in the fall of 1930 they did not think they were in the great a Great Depression they thought it was a recession very much like that occurred at least a dozen times although not always when stock markets were important. But then we'd have many recessions in the uh in the United States over the time and this did not look like it was something dramatically out of the ordinary the uh but and for a while actually for about 10 days after my birth uh that'd be held on and uh, the stock market actually managed to go up all of one or two percent there that uh in those 10 days but that's the last day. Uh, well from that point if you'll turn to the next slide, the uh stock market went from the level of 240, then 241 which was a noticeable decline because uh if somebody had given me a thousand dollars on the day I was born, and I'd bought stocks with it and bought the Dow average, my thousand dollars would have become 170 dollars in in less than two years and that is something that none of us here ever experience that uh we may have had it with one stock occasionally but but in terms of uh having a broad range of America marked down 83 percent in two years and marked down 89 percent of the peak it was in September 3rd, 1929 was extraordinary.

And um, in that intervening period less than one year after I was born is slightly less than one year my dad went to the bank where he worked and had his account and of course the bank had a sign on a closed and uh, so he had no job and uh, he had two kids at that point and uh his father had a grocery store but Charlie and I both worked for my grandfather. Charlie worked there in 1940 I worked there in 1941 so we didn't know each other. But my grandfather said to my father that don't worry about your groceries, Howard; he says I'll just let your bill run. That was my grandpa's not exactly he was he cared about his family but it wasn't going to go crazy.

And uh one of the things as I look back on that period that's uh, and I don't think the economists generally like to give it that much of a point of importance but but if we'd had the FDIC 10 years earlier we the FDIC started on January 1st, 1934. It was part of the sweeping legislation that took place when Roosevelt came in but if we were it was part of the sweeping legislation that took place when Roosevelt came in but if we'd had the FDIC uh, we would have had a much much never an experience I believe in the in the Great Depression.

People blame it on smooth smooth hall here and they I mean there's all kinds of things and the margin requirements in 29 and all of those things entered into creating a recession but if you have over 4,000 banks who have over 4,000 banks fail that's 4,000 local experiences where people save and save and save and put their money away and then someday they reach for it and it's gone. Uh and that happens you know and all 48 states that it happens to your neighbors and it happens to your relatives, uh it has to have an effect on the psyche that's incredible. So it uh one guy very very very good thing that came out of depression in my view is the FDIC and uh it would have been a somewhat different world I'm sure.

Yep the bank failures hadn't just rolled across this country and uh and uh with people that thought that they were Savers found out that they had nothing uh when they went there and there was a sign that said closed. Uh incidentally the FDIC uh I think very few people know this but uh, or at least they don't appreciate it. But the FDIC that's not cost the American Tax Paradigm. I mean its expenses have been paid, its losses have been paid all through assessments on banks. It's been a mutual insurance company of the banks backed by the federal government associated with the federal government. But now it holds 100 billion dollars and that consists of premiums that were paid in and investment income on the premium plus the expenses and paying of all the losses.

And think of the incredible amount of peace of mind that's got that's given to people that were not similarly situated in when the Great Depression hit. So the Great Depression went on and um it lasted a very long time but it lasted a lot longer in the minds of people than it did actually in its effects. World War II came along and on sort of an involuntary manner we adopted Keynesianism; we started running fiscal deficits of course that were absolutely huge and took our debt up to a percentage of GDP which we've never reached, had never reached before. I never reached since. So we had an enormous economic recovery but the minds of people had been so scarred. The memories parents told their children, 1929 became a symbol in people's minds.

I mean if you said 1929, it was like saying 1776 or 1492. I mean everybody knew exactly what you were talking about and it affected stock prices in a rather remarkable way to the point, if you'll change to the next slide, it was January 4th of 1951. That the kid who was born on August 30th in 1930 had finished college before the stock market got back to where it was at that earlier time.

So take the years from 1920, 1930 or 1929, relieve the 19 51 or take the year for my birth, 20 years and bear in mind that uh, you know the country was only 140 years old when it started. That that's 20 years out of this amazing 231-year lifetime of our country that was flat out you know a time of no economic growth and no feeling by people in terms about who else of the country that about what American economy was worth what all these corporations that were doing far, far better than they were all in all.

But it took all of that time to restore in the market a price level that was equal to what it was when I was born 20 years earlier. So if you think about the fact that we're enduring a few months and we'll endure so many more months but, and we don't know how it comes out and people in the 30s didn't know how it was going to come out but they endured and persevered, prospered and the American miracle continued. But it's interesting in that uh, I actually don't have a slide for the next one because last night I was thinking after all the slides have been prepared I was actually thinking about this a little late, a little bit and I remembered that uh um in 19 at the start of 1954, the stock market was the Dow was only at about 280.

And I remember 1954 because it was the best year I ever had in the stock market and the Dow went from essentially my 280 or thereabouts at the start of the year to a little over 400 at the end of the year. And when it went to 400, as soon as it went across 381, that famous figure from 1929 when it went to 400, uh this will be hard for some of you to believe but everybody wondered is this 1929 all over again? And that seems a little far-fetched because it was a different country in 1954. But that was the common question and it actually achieved it was, you know, it achieves such a level of worry about whether we were about to jump off another cliff just because the 381 of 1929 had been succeeded exceeded that they held Senator Fulbright, the Fulbright of Arkansas who became very famous later in terms of the Foreign Relations Committee.

But he headed the Senate Banking Committee and he called a special per special investigation and he called it the uh, what do you call it? The stock market study but it really as you if you read through it he really was questioning whether we had built another house of cards again. And on his committee, it's interesting to see the Senate Finance Committee. Uh one of the members was Prescott Bush, the father of George H.W. Bush and grandfather of George W. Bush and had some illustrious names on his committee in March of 1955 with the Dow at 405.

Assembled 20 of the best Minds in the United States to testify as to whether we were going crazy again because the market was at 400. The Dow was at 400. And we'd gotten in this incredible trouble before but that was the mindset of the country it's incredible. Uh, we didn't really believe America was what it was and my boss the reason I'm familiar with this thousand-page book that I have here, I found it last night, uh, the library never was that I was working in New York for one of the 20 people that was called down to testify before Senator Fort Worth and he testified right before Bill Martin who was running the Federal Reserve testified right after General Wood who was running shares.

Uh, that's advisors was very, very important then and and Bill Martin, of course, is the pedal, that longest-running chairman in the history of the Fed and he's the one that gave the famous quote about the function of the Fed was to take away the punch bowls just when the party started to get really warmed up. Uh, but Ben, where am I? My boss sent me over to the public library in New York and to gather some information for him, something he could do in five minutes with the computer now and I dug out something and he went to testify.

And uh, on page 545 of this book I knew where to look I didn't have to go through it all but, he uh, the quote which I remember and I remember because Ben Graham was the one of the three smartest people I've met in my life and he was the dean of people in Securities business. He wrote the classic security analysis book in 1934. He wrote the book that changed my life "The Intelligent Investor" in 1949. He was unbelievably smart and when he testified with the Dow at 404 he had one line in there right toward the start and and his written testimony and he said the stock market is high looks high, it is high but it's not as high as it looks.

But he said it is high. And since that time, if we'll turn to the next slide, of course, we felt the American Tailwind at full force and and the Dow, well let's see we, uh, yeah on the Dow, it went down Friday, but when we made the slide it was about 24,000. So, uh you're looking at a market today that has produced a hundred dollars for every dollar all you did, it was had to believe in America just buy a cross-section of America. You didn't, you didn't have to read The Wall Street Journal; you didn't have to look up the price of your stock; you didn't have to pay a lot of money and fees to anybody. You just had to believe that the American miracle was intact.

But you'd had this testing period between 1929 and and uh well really uh, certainly 1954 as indicated by what happened when it got back up to 380, you had this testing period and uh uh people really they'd lost faith to some degree they just didn't see the potential of what America could do. And we found that uh that uh nothing can stop America when you get right down to it and uh it's been true all along. It may have been interrupted uh weren't the scariest of scenarios when you had a war with one group of states fighting another group of states.

And it may have been tested again in the Great Depression and it may be tested now to some degree. But in the end, the answer is never bet against America and uh in my view it was true today, it isn't, it was in 1789 and even was true during the Civil War and the depths of the depression. Now I'm now about to say something that and don't change the slide yet, uh, I'm not about to say something that some of you will be tempted to argue with me about but I wouldn't make the case that we are imperfect in the great, great in many ways but I would say, and if you'll put up the next slide, that we are now a better country as well as an incredibly more wealthy country than we were in 1789.

We're far, far, far from what we should be, will be, but we have gone dramatically in the right direction. Uh, it's interesting we said in 1776, he said, "We hold these truths to be self-evident that all men are created equal endowed by their creator on a certain unalienable rights among these are life, liberty and pursuit of happiness.” Uh, and yet 14 years later, a year after we really officially began the country in 1789, adopted the Constitution, we found that more than 15 percent of the people in the country were slaves.

And we wrestled with that but when you say the word self-evident that sort of sounds like you're saying any damn fool can recognize that and you certainly say. Uh, you can argue maybe a little bit about life and pursuit of happiness but I don't see how in the world anybody can reconcile Liberty with the idea that that 15 percent of the population was enslaved.

And it took us a long time to at least partially correct that economy; it took a Civil War and took losing six percent of those people that uh males that were between 18 and 60 years of age but we've moved in the right direction. We've got a long ways to go but we've moved in the right direction. Now in addition, going back again to that 1776 statement that all men are created equal and endowed by their creator etc.

Uh, I think it was self-evident the 50 percent of the population that they were getting a fair deal for over half the lifetime of the country took 131 years of our country's 231 years. It took 131 years until women were guaranteed the right to vote for our country's leaders. And then what's even more remarkable is that after we adopted them, the 19th Amendment in 1920, it took 61 more years until a woman was allowed to join those eight males on the Supreme Court.

I grew up thinking that the Supreme Court you know must have been said that to be nine men but it, it uh at 61 years so 192 years before Sandra Day O’Connor was appointed to the court. And now you can say that that there was a pipeline problem; half the population may have been women in 1920 but they weren't half the lawyers or 10 percent of the lawyers probably. So if you can understand uh some delay but a 61 years is a long time to go and to pick 33 males in between if that was entirely by chance the odds against that you were flipping coins is about 8 billion to one.

Now like I said that was a pipeline problem but uh it took us a long, long time and it's not done yet but I think it does give meaning to the fact that we are a better Society with a lot of room to go but we are a better Society than existed uh in 1789. We, you know when you go to Colonial Williamsburg uh you know you have that I've been there a couple of times as a matter of fact I I watched the um uh the debate between Jimmy Carter and uh Gerald Ford there that's in 1976.

Uh and uh, you know it it was not a great time to be black; it was not a great time to be a woman and uh both of those categories told them certainly got potential for significant Improvement in terms of fulfilling that pledge you made in 1776 about how we believe that that it's self-evident oh man, we're created equal. But we have made progress; we are a better society and we will, as the years go by.

Uh, if you'll move to the next slide and uh, I believe that and I think let's see if I can get these slides into proper order here. Alright, I believe that when you get through evaluating all of the qualitative facts what we have done toward meeting the aspirations of what we wrote in 1776 what was we wrote in 1776 wasn't a fact but it was an aspirational document. And and we have worked toward those aspirations and uh we have a long way to go but uh I'll repeat if you'll move to the next slide that never never bet against America.

Now let's move on now to uh abroad much broader subject what I don't know and I don't know and perhaps with a bias I don't believe anybody knows what the market is going to do tomorrow, next week, next month, next year. I know America is going to move forward over time but I don't know for sure and we learned this on September 10th, 2001 and we learned it a few months ago in terms of the virus anything can happen in terms of markets and if you you can bet on America but you gotta but you have to be careful about how you bet because uh simply because markets can do anything. On October, whatever it was in 1987, October 11th I believe Monday, yeah the markets went down 22 percent in one day.

In 1914 they closed the stock market for about four months after 9/11. Close the market for four days, we hustled the get it going again but nobody knows what's going to happen tomorrow.

So when you when you better I tell you to bet on America and I tell you that's what really gotten me through ever since I was bought my first stock when I was 11. I mean this, that I caught a huge, huge, huge Tailwind in America but it didn't wasn't going to blow in my direction every single day and you don't know what's going to happen tomorrow. And uh I would like to the context of the present news point out something may find out kind of interesting.

Uh we go to YouTube uh, you'll find on June 17th of 2015, four plus years ago you'll find Sam Nunn. He was one of the people I admire the most in the United States in the world, enormous Patriot and tremendous senator and uh he's carried on thankless work uh since leaving the Senate and I'd say and heading something called the Nuclear Threat Initiative which most of you haven't heard of.

But but uh I've been slightly involved in it. Sam Nunn founded that and the Nuclear Threat Initiative simply organizations to devoted to trying to reduce the chances of something of a nuclear, chemical, biological and now cyber nature from either malevolent or accidental or whatever may be from causing deaths and millions of Americans.

And and among the things that Sam co-founded it and uh, but he's been the heart and soul of the organization uh subsequently and and these talked about worried about pandemics among along with a nuclear threat for decades and he's participated in war games where they play out very scenario scenarios including beloved malevolent pandemics that could be started by the same kind of not that sent the anthrax letters and around the 9/11 a little after.

And Sam, during his YouTube uh presentation and then I'm sure he's been on many others I just happened to look this one up and uh talked about the dangers of a pandemic and anybody should listen to Sam on anytime he talks. So I he said at that time in terms germs don't have borders which we've certainly learned in the last couple of months.

And I when I clicked on YouTube, if you'll go to the next, I found out that recently I had 831 views and this this was only a few days ago I looked it up and uh maybe I don't know whether most of those views have just been the last few days because they're in the last few months I should say because of the interest in pandemics.

But uh, it is hard to think about things that haven't happened and yet and uh without experiencing it. And I'm one one something like the current pandemic happens, uh, it just, it's just hard to factor that in. And that's why you never want to use borrowed money and at least in my view, mind and margin to buy into Investments.

Uh, and we run Berkshire that way; we run it so that we literally try to think of the worst case of not only just one thing going wrong but other things going wrong at the same time maybe partly caused by the first but maybe independent even of the first.

And uh, in them that you learned in and I don't know what grade now probably earlier than when I went to school than fifth or sixth grade that anything you're going to have any series of numbers times zero and just need one zero in there and the answer is zero. And and there's no reason to use borrowed money to participate in the American Tailwind. But there's every other reason to participate.

Now I can't resist pointing out that in October of 2019 a large 300 Page got it right here a book was brought out and Johns Hopkins, one of the most respected institutions in the country, uh, Nuclear Threat Initiative NTI and the intelligence group at The Economist collaborated to evaluate the problems of the worldwide preparedness for pandemics essentially.

And I think in November Sam came out to see me with Ernie or Reason former Secretary of Energy, who now is the CEO of the NTI. He and Sam, Michael chairman, and Beth Cameron who did a lot of work on this report came out to see me and they gave me in November I believe of last year they gave me this appraisal and the opening line if you'll turn the page.

This is the opening line of this 300 Page tome: Biological threats natural intentional or accidental in any country composed risk to Global Health International Security and the worldwide economy. And this book was prepared in order to evaluate the preparedness of the various countries and rank them. We rank pretty well, but all of us got a failing, all of the country's got a failing grade, basically.

Now you would think with The Prestige of Johns Hopkins, The Economist along with people like Sam and Ernie etc that this would have gotten some attention. And again, uh Sam I'll turn to the next. Sam and then others went on YouTube on October 24, 2019 and they have racked up as a couple days ago 1498 views.

Now my friend Bill Gates was delivering the same warning; I had a TED Talk some years back and he's gotten a lot more views but it just says something about the fact that you're going to get bolts from the blue and you can read papers about them and you can talk about what will happen if some as they used to fellows at Solomon used to tell me some 25 Sigma event comes along, and they you know they say, "This, that'll happen once in the life of the universe." You know, and that it happens to him a couple of times in a month and they go broke.

It, uh you just don't know what's going to happen you know. At least in my view, you know, that America's Tailwind is not exhausted. You're going to get a fine result if you own equities over a long period of time. I mean the idea that equities will not produce better results than the 30-year treasury bond which yields one and a quarter percent now it's taxable income.

Uh, it's the aim of the Federal Reserve to have two percent of your inflation; uh, equities are going to outperform that Bond, they're going to outperform treasury bills; they're out; they're going to outperform that money if stuck under your mattress. I mean there's they are a enormously Sound Investment as long as they're an investment and they're not a gambling device or something that you'd think you can safely you know buy on margin or whatever it may be.

Uh, it's interesting that stocks offer which and stocks are a we always look at stocks as just being a part of a business. I mean stocks are a small part of a business if in 1789 you'd saved a small amount of money and it wasn't easy to save you might have bought with those savings. You might have bought a tiny, tiny plot of property, maybe you bought a house that could be rendered to somebody, but uh you didn't really have the chance to buy in within different people who were developing businesses and who were putting presumably putting their own money in and that would have the American Tailwind behind and of the ten, a reasonably high percentage would succeed in a way and earn decent returns.

But but those are the choices you might have had to do with savings. Uh, and they started offering bonds originally and there again you've got a limited return but the return may have been in those days may have been five or six percent or something of the sort. But you know, you can't buy risk-free bonds.

I mean the yardstick for me is always the the US Treasury in when somebody offers you quite a bit more than the US Treasury there's usually a reason. There's there's more risk but going back to stocks will bring the attitude to them too often that because they are liquid and quoted minute by minute that it's important that you develop an opinion on them minute by minute.

Now that's really foolish when you think about it that uh and that's something Graham taught me in 1949. I mean that's a single thought stocks were parts of businesses and not just little things that moved around unchartered sir charts were very popular in those days and whatever it may be.

Imagine for a moment that you decided to invest money now and you bought a farm and the farmland around here uh let's say you bought 160 acres and you bought her the x per share per acre and the farmer next to you had 160 identical acres, same contour, same quality of soil quality so it was it was identical. And that farmer next door to you uh, it was a very peculiar character because every day that farmer with the identical farm said I'll sell you my farm or I'll buy your farm at a certain price which he would name.

Now that's a very obliging neighbor; I mean that's got to be a plus to have a fellow like that with the next farm. Ah, you don't get that with farms; you got it with stocks. If you want to 100 years or General Motors on Monday morning somebody will buy your 100 shares or sell you another hundred shares exactly the same price which he would name. Now that goes on five days a week but just imagine if you had a farmer doing that when you bought the farm you looked at what the farm would produce that was what went through your mind either saying to yourself I'm paying X dollars per acre I think I'll get so many bushels of corn or soybeans on average some years good, some years bad and some years the price will be good, some years the price will be bad.

Etc, but you think about the potential of the farm and now you get this idiot that uh buys a farm next to you and and on top of that he's sort of a manic depressive and drinks maybe smokes a little pot so his numbers just go all over the place. Ah, now the only thing you have to do is to remember that this guy next door is there to serve you and not to instruct you. You bought the farm because you thought the farm was had the potential. You don't really need a quote on it.

Uh, you know if you bought in with John D. Rockefeller or Andrew Carnegie and there were never any well there were quotes later on but but basically uh, you bought into the business and that's what you're doing when you buy stocks but you get this added advantage that you do have this neighbor who you're not obliged to listen to at all who is going to give you a price every day and he's going to have his ups and downs and maybe he'll name a Sully price that they'll buy it in which case you sell if you want to uh, or maybe he'll name a very low price and you'll buy as far from him.

But you don't have to and you don't want to put yourself in a position where you have to, so stocks have this enormous inherent advantage of people yelling out prices all the time to you and many people turn that into a disadvantage and of course many people can profit in one way or another from telling you that they can tell you what this farmer is going to yell out tomorrow or next your neighboring farmers in the tomorrow or next week or next month. There's huge money in it so people tell you that it's important and they know and that you should pay a lot of attention to their thoughts about what price changes should be or you tell yourself that there should be this great difference.

But the truth is if you own the businesses you liked prior to the virus arriving, huh, it changes prices and it changes uh but nobody's forcing you to sell and if you really like the business and you like the management you're in with and the business hasn't fundamentally changed and I'll get to that little one report on Berkshire which I will assume I promise.

Uh, the stocks have an enormous advantage and you still can bet on America but you can't that unless you're willing and have an Outlook to independently decide that you want to own a cross-section of America because I don't think most people are in a position to pick single stocks, few maybe, but but on balance I think people are much better off buying a cross-section America and just forgetting about it.

If you've done that have I done that when I got out of college it's all I had to do to make a hundred for one and then collect dividends on top of it which increased substantially over time. The American Tailwind is marvelous. American Business represents and it's going to have interruptions and you're not going to foresee the interruptions and you do not want to get yourself in a position where those interruptions can can affect you either because you're leveraged or because you're psychologically unable to handle looking at a bunch of numbers if you really had a farm and you had this neighbor and one day offered you two thousand dollars an acre and the next day he offers you twelve hundred dollars an acre and maybe the day after that he offers you eight hundred dollars an acre.

Are you really going to feel that that two thousand dollars an acre when you had evaluated what the farm would produce? Are you going to let this guy drive you into thinking I better sell because his number keeps coming in lower all the time? But uh, it's a very, very, very important matter to bring the right psychological approach to owning Common Stocks.

But I will tell you if you bet on America sustained that position for decades you're going to do better than in my view far better than owning treasury Securities or far better than following people who tell you that what the farmer's going to yell out next. Uh, there's huge amounts of money that people pay for advice they really don't need and for advice for the person giving it a can be very well meaning in it and believe their own line.

But the truth is that you can't have, you can't deliver Superior results to everybody by just having them trade around a business if you've bought into a business that's going to deliver what the business produces. And and the idea that you can outsmart the person next to you or the person advising you can outsmart the next person sitting next to you is is uh well it's really the wrong approach.

So the uh fine businesses got a cross-section in my view for most people the best thing to do is to own S P 500 Index Fund. People will try and sell you other things because there's more money in it for them if they do and I'm not saying that that's a conscious act on their part. Most good salespeople believe their own bologna.

I mean that's part of being a good salesperson and I'm sure I've done that in my life too. But it's very human if you keep repeating something often if that's why lawyers get have the witnesses keep saying things over and over again but by the time they got on the witness stand, they'll believe it whether it was true in the first place or not.

But the you are dealing with something fundamentally advantageous in my view in owning Common Stocks. I will bet on America the rest of my life and I hope my successors at Berkshire do it now. We do it in two different ways. We do it by buying entire businesses and we buy parts of businesses and I would like to uh emphasize that what I'd like to give you a few figures that uh will tie in from our uh activities in the first quarter and also what we've done in April.

We are not right about we do try to pick the businesses that we think we understand; we don't buy the S P 500 but uh, and we like to buy the entire businesses when we buy them. Uh, but we don't get a chance to do that very often; most of the best businesses are not available for sale in their entirety but we don't mind in the least buying partial interests in businesses and uh we would rather own six or seven or eight percent of them you know a wonderful company and regard it as a partnership interest essentially in that company and that we get an opportunity to do that through remarkable Securities.

And sometimes we get more opportunities than others and with that I hope I've convinced you to bet on America. I'm not saying that this is the right time to buy stocks if you mean by right that they're going to go up instead of that I don't know what they're going to go in the next day or week or a month or year. But I hope I know enough to know well I think I can buy a cross-section and do fine over 20 or 30 years and I think that's kind of for a guy 89 optimistic viewpoint but uh, I hope that really everybody would buy stocks with the idea that they're buying Partnerships and businesses and they wouldn't look at them as chips too move around up or down.

So, uh we will just now take a quick look and I say we've got the Becky's email address so if you have questions on what I've said or other things you can email these questions and she is back there probably uh sort of a man I was trying to handle questions coming in and pick out the one she's going to prioritize but but feel free to anything I've talked about so far to send along uh to her and we'll keep her address up when I let her hold the formal part of the meeting too.

Very briefly in terms of Berkshire in the first quarter, we'll put up we have the slides on that. There we are it uh, we are operating earnings were and there's much more about this in the 10-Q and it's really not worth spending any real time on but the operating earnings for the first quarter have no meaning whatsoever in terms of forecasting what's going to happen the next year and I don't know the consequences of shutting down uh the American economy.

I know eventually it will work whatever we do. Uh, we may make mistakes; we will make mistakes and I'm not during this talk on and later on I'm not going to be second guessing people on this because nobody knows for sure what any alternative action would produce or anything sort but what we do know is that for some period certainly during the balance of the year but it could go on a considerable period of time who knows but our operating earnings will be less, considerably less than if the virus hadn't come along.

I mean that just, it hurts some of our businesses a lot. I mean you shut down some of our businesses effectively been shut down, it affects, oh there's much less. Our three major businesses of insurance and and the BNSF railroad and our energy business those are our three largest by some margin uh, they're in a reasonably decent position.

They will they'll spend more than their depreciation uh so some of the earnings will go along with depreciation will vote or increasing fixed assets but basically these businesses will produce cash even though their earnings decline somewhat and and if we'll go to part two we for sure we keep ourselves in extraordinarily um strong position will always do that that's just that's fundamental.

We insure people; we're a specialist to some extent and a leader uh it's not our main business but we sell structured settlements that means somebody gets in a terrible accident usually an auto accident and uh, they're going to require care for 10, 30, 50 years and uh their family or their lawyer is wise enough in our view to rather than take some big cash settlement to essentially arrange to have money paid over the lifetime of the individual to take care of their medical bills or whatever may be.

And we're, we're a large, we've gotten many, many people that in effect have staked their well-being on the Promises of Berkshire to take care of them for, like I said in 50 years or longer into the future. And now I would be, I would never take real chances with money under of other people's money under any circumstances.

Both Charlie and I come from a background where we ran Partnerships. I started mine in 1956 uh for really seven neither actual family members or the equivalent and Charlie did the same thing six years later and we never, neither one of us I think, I know I didn't, I'm virtually certain the same is true of Charlie, neither one of us ever had a single institutional investment of the with us. I mean every single bit of money we managed for other people was from individuals, people with faces attached to them or entities or money with faces attached to them.

And uh, so we've always felt that our job is basically that of a trustee and hopefully a reasonably smart press trustee in terms of what we were trying to accomplish. But the the trustee aspect has been very important; it's true for the people with the structured settlements. It's true for up and down the line but it's true for the owners very much too.

So we always operate from a position of strength now a show on on the slide that's out by show our let's go back one. Uh yeah. I I show our net, our cash and treasury ball position on March 31st and you might look at that and say well you've got 125 billion or so in cash and treasury bills and you've got at least at that point we had about a hundred and I don't know 100, 80 billion or so in equities and you can say well that's a huge position having treasury bowls versus uh just 180 billion in equities but but we really have far more than that inequities because we own a lot of businesses we own a hundred percent of the stock of a great many businesses which to us are very similar to the marketable stocks we own.

We just don't want them all; they don't have a quote on them but we have hundreds of billions of them of wholly owned businesses. So 124 billion is not a not some you know 40 percent. So cash positions is far less than that and we will always keep plenty of cash on hand and uh for any circumstances with the 911 comes along if the stock market is closed as it was in World War one.

It's not going to be but you know, I didn't think we were going to be having a pandemic when I watched that Creighton Villanova game in January either so uh we want to be in a position at Berkshire where um well you remember Blanche DuBois in a Streetcar Named Desire that goes back before many of you but uh she said she didn't want them she did in Pontius case she said that uh she depended on the kindness of strangers.

And we don't want to be dependent on the kindness of friends even because there are times when money almost stops. Uh and we had one of those interestingly enough uh we had it of course in 2008, and nine but right around the day or two leading up to March 23rd we came very close but fortunately we had a Federal Reserve that knew what to do.

But we money was, investment grade companies were essentially going to be frozen out of the market. CFOs all over the country have been taught to in order to sort of maximize Returns on Equity Capital so they finance themselves to some extent through a commercial paper because that was very cheap and it was backed up by Bank lines and all of that and they let the debt create creep up quite a bit of many companies and then of course the hell scared out of them by what was happening uh in markets particularly the equity markets.

And so they rushed to draw down lines of credit and uh that surprised the people that extended those lines of credit. They got very nervous and the capacity of Wall Street to absorb a rush to liquidity that was taking place in mid-March was strained to the limit to the point where the Federal Reserve observing these markets decided they had to move in a very big way.

We got to the point where the U.S Treasury market, the deepest of all markets, I got somewhat disorganized. And when that happens, believe me, every Bank and CFO in the country knows it. And they react with fear and fear is the most contagious disease you can imagine; it makes the virus look like a biker.

We came very close to having a total freeze of credit to the largest company in the world who were depending on it. And to the great credit, well Jay Powell, I I've always had Paul Walker up on a special place, special pedestal in terms of Federal Reserve chairman over the years.

We've had a lot of them, very good Fed chairman, but Paul Walker item at the top of the list and I'll recommend another book. Paul Walker died about here I don't know, plus maybe a year ago or a little less but not much before he died he wrote a book called "Keeping At It" and to call my friends at The Bookworm I think you'll enjoy reading that.

But Paul Walker was a giant and then it was he was a big guy too. He and Jay Powell couldn't see more in temperament or anything but Jay Powell in my view and the FED Board long up there on that pedestal because with him because uh they acted in the middle of March probably somewhat instructed by what they'd seen in 2008 and nine uh they reacted in a huge way and essentially allowed what's happened since that time to play out the way it has.

And then March when the market essentially Frozen a little after mid-month ended up because the FED took these actions on March 23rd. It ended up being the largest month for corporate debt issuance I believe in history and then April followed through and was even a was even with even a larger month than you saw all kinds of companies grabbing everything coming to the Market and spreads actually narrower than every one of those people that issued Bonds in late March and April.

I wasn't a thank you letter to the FED because it would not have happened if they hadn't operated with really unprecedented speed and determination. Uh and we'll know the consequences of swelling the Fed's balance sheet. You can look at the Fed's balance sheet they put it out every Thursday. It's kind of interesting reading if you're sort of a nut like me, uh but it's it's up there on the internet every Thursday and you'll see some extraordinary changes there in the last six or seven weeks.

Uh and like I say we don't know the consequences of that and nobody knows exactly. Uh, and we don't know the consequences of what or undoubtedly will have to do but we do know the consequences of doing nothing and that's what have been the tendency of the FED in many years past not doing nothing but doing something in that, but Mario Draghi you know brought the whatever it takes to uh Europe and and the Federal Reserve then mid-March sort of did whatever it takes squared.

And uh we owe them a huge thank you but we're prepared at Berkshire. We always prepare on the ad on the basis that maybe the Fed will not have a chairman that acts like that. And we really want to be prepared for anything, so that explains some of the 124 billion in cash and bills.

We don't need it all, and but we do never want to be dependent on the not only the kindness of strangers but the kindness of friends. Now, in the next slide we have the what we did in equities.

And these numbers are tiny when you get right down to it. I mean that for having 500 billion or so in net worth and I mean not in net worth but in a market value would at the start of the year or something close to that. Uh, you know, we bought in 1.7 billion of stock and our purchases were a couple billion more than our sales of equities but as you saw in the previous slide we had operating earnings of five almost six billion and and uh so we did very, very little in the first quarter.

And then another figure which I wouldn't normally present to you but I want to be sure that if I'm talking to you about investments in stocks more than I usually have, I want you to know what Berkshire's actually doing now. You'll see in the month of April that we net sold uh six billion or so of securities and that's basically that isn't because we thought the stock market was going to go down or anything of the shorter because I'm somebody changes their Target price or they change this year's earnings forecast uh I just decided that I'd made a mistake.

Uh, it was an understandable mistake; it was a probability weighted decision. When we bought that we were getting uh an attractive amount for our money when investing across the airlines business. So we bought roughly 10 percent of the four largest Airlines and we probably this doesn't is not a hundred percent of what we did in April but but we probably paid seven or eight billion and somewhere between seven and eight billion to own 10 of the four large companies in the in the airline business and we felt for that we were getting a billion dollars roughly of earnings.

Now it wasn't getting a billion dollars of dividends but we've felt our share of the underlying earnings was a billion dollars and we felt that that number was more likely to go up than down over a period of time there would be cyclical obviously. But but it was it was as if we bought the whole company but we bought it through uh the New York Stock Exchange and we can only effectively buy 10 roughly of the four.

And uh we didn't we treated mentally exactly as if we were buying a business and uh and it turned out I was wrong about that business because of something that was not in any way the fault of for excellent CEOs. I mean believe me, no joy being a CEO of Airline but the companies we bought or well-managed, the a lot of things right.

It's a very, very difficult business because you're dealing with millions of people every day and if something goes wrong for one percent of them they are very unhappy, so I don't envy anybody the job of being CEO of an airline but I particularly don't enjoy them being in a period like this where essentially nobody and people have been told basically not to fight.

I'm going to I'm looking forward to Flying um may not fly commercial but that's another question. The uh, but the the airline business and I I may be wrong and I hope I'm wrong but uh I think it it changed in a very major way and it's obviously changed in the fact that there are four companies are each going to borrow you know perhaps and average of at least 10 or 12 billion each way you have to pay that back out of earnings over some period of time.

I mean you're 10 or 12 billion dollars worse off if that happens and of course in some cases they're having to sell stock or sell the right to buy a stock of these prices and that takes away from them the upside down. And I don't know whether it's two or three years from now that that as many people will fly as many passenger miles is as they did last year they may